Burundians in Bujumbura are reacting to the recent introduction of new 5,000 and 10,000 Burundian franc banknotes. It comes as they struggle to exchange their old notes for new ones, particularly since the deadline expired in June.
“This is the beginning for the government to be able to start reforms, a necessary awareness to really break this cultural conservatism,” says Faustin Ndikumana, an economist and president of PARCEM think tank. “(In) Burundian culture … each person wants to keep his wealth at home” Ndikumana explains.
However, not everyone agrees. At least not in the markets, where many people are having problems trading due to a scarcity of new currency notes.
_”When you don’t have a bank account, your old bills aren’t replaced. It’s impossible. They force us to open accounts at the bank when we have no means to add to an account”, _Chantal Mugisha, a merchant at the COTEBU market said.
The two denominations, worth $1.77 U.S. and $3.54 U.S., are the highest of the six in circulation in a country with a per capita GDP of $270.
The Bank of the Republic of Burundi attributed the move to what it called an increase in circulation in the “informal circuit” that led to instability in the activities of financial institutions. It also said in its press announcement that there was a shortage of these notes in banks that destabilized activities.
All 5,000- and 10,000-franc notes dated July 4, 2018, were withdrawn as of June 7, and replaced by new ones dated Nov. 7, 2022. There was a 10-day time limit that expired on June 17 for holders to deposit the old notes in their accounts and to open a bank account if necessary. The old notes were to be legal tender only until June 17.
“I have here a sum of old 170,000 Fbu (Burundian francs, about 54.8 euros) banknotes. I wanted to get gas from Gatumba and I heard that if I don’t have new bills they can’t give me gas. So I wonder how to deposit these notes in my boss’s bank account and I will be forced to stay in Bujumbura, I live inside the country,” says Abdoul Karim Niyonkuru, a Taxi driver in Bujumbura.
Further restrictions by the Bank of Burundi limited individual total deposits of cash to 10 million francs ($3,543) and legal entities to 30 million francs per day and per account. Burundi’s apex bank has said it would deploy agents to rural areas to assist in the exchange.