Rwanda
Rwanda gets US$ 5 million IMF credit

afrol News, 13 August - The International Monetary Fund (IMF) this night approved a US$ 5 million credit to support the Rwandan government's poverty reduction efforts. Earlier, IMF staff had hailed Rwanda's "comprehensive and innovative" Poverty Reduction Strategy Paper (PRSP), which provided "a sound basis for IMF concessional financial assistance."

The IMF also approved additional interim assistance for Rwanda under the Enhanced Heavily Indebted Poor Country Initiative (HIPC) of about US$ 1 million to help Rwanda meet its debt service payments on its existing debt to the IMF. 

Eduardo Aninat, IMF Acting Chairman, said the Rwandan authorities were to be "commended for preparing a comprehensive PRSP, which lays out Rwanda's poverty reduction strategy following a broad consultative process with civil society and the donor community." The paper provided the basis for guiding current and future macroeconomic programmes and with its completion Rwanda had met one prerequisite for the completion point under the enhanced HIPC Initiative, which was "expected to be reached next year."

Aninat added that, achieving sustainable growth and reducing poverty in the period ahead would "depend crucially on rapid progress in resolving the security situation in a just and durable manner - thus laying the foundation for resources to be channelled toward building productive capacity." The Rwandan authorities were "strongly encouraged" to buttress progress toward peace and durable stability. 

Rwanda had undertaken "a significant effort" to increase its domestic revenue base, the IMF says. Key measures included changes in tax policy and revenue administration measures - effectively safeguarding the benefits derived from the HIPC Initiative.

The country was already on a healthy economic road, according to the IMF assessment. Macroeconomic performance during 2001 had been "strong". Real GDP grew by 6.7 percent, as a favourable climate had stimulated agricultural output and external transfers, spurred manufacturing, construction, transportation, and communications activities. Also fiscal performance had been strong and state revenues had increased significantly. This had been achieved despite a sharp decline in export prices for tea and coffee in 2001.

Rwanda's poverty reduction strategy aims at visibly increasing public investment in human and physical capital and at facilitating private sector savings and investment, and rapid economic growth paired with low inflation. Aninat noted the strategy included "an ambitious structural agenda, fostering improvements in the financial administration and its transparency, enhancing governance, and advancing the financial sector and its supervision."

Therefore, the IMF had endorsed Rwanda's PRSP as "a sound basis" for IMF concessional financial assistance.

Sources: Based on IMF and afrol archives

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