Rwanda : IMF says Rwanda economic performance is “satisfactory”

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IMF says Rwanda economic performance is “satisfactory”

President Kagame receives outgoing IMF Country Representative, Mr. Dmitry Gershens, and Director of IMF’s African Department, Antoinette Sayeh, July 20, 2012, in Kigali (Photo from PPU)

 

 

The International Monetary Fund said on Thursday (November 29, 2012) that it approved of the government’s performance in stabilizing the economy despite shocks of the global economic downturn and donor delays in releasing funding.

A team from the Fund said in a statement after the fifth review under a three-year Policy Support Instrument (PSI) for Rwanda that government policy was on course to maintain a resilient economy, “including for reducing aid dependence”.

“Economic growth has continued to be strong, inflation remains contained, and poverty has further declined,” said Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair of the IMF’s Executive Board. ““The Rwandan authorities are to be commended for their satisfactory implementation of the economic program supported by the Policy Support Instrument, carried out against a challenging global economic environment.”

The IMF approved a three-year PSI for Rwanda in June 2010. The IMF’s framework for PSIs is designed for low-income countries that may not need, or want, IMF financial assistance, but still seek IMF advice, monitoring and endorsement of their policies. In Rwanda’s case, the Fund has found satisfactory performance in all the previous reviews.

Mr Shinohara said: “Fiscal and monetary policies remain appropriate. Delays in budget support have required postponing some government spending, and fiscal policy during the remainder of the fiscal year will need to be carefully executed to minimize recourse to domestic bank financing and avoid crowding out the private sector.”

“Meanwhile, the central bank has appropriately tightened the monetary stance to slow credit growth and mitigate exchange rate and inflation pressures. “

“Strengthening the domestic revenue base and public financial management are important objectives, including for reducing aid dependency. The recommendations of a recent technical assistance mission on tax policy and revenue administration represent a good basis for broadening significantly the tax base.

“The government has taken important steps to strengthen Rwanda’s debt management capacity. It will be critical in the period ahead to continue with prudent management of debt and complete large ongoing investment projects. It will also be important to maintain the momentum of structural reforms to improve the business environment, strengthen competitiveness, and broaden the economic base, in order to sustain economic growth and further reduce poverty,” Mr. Shinohara added.

 

 

 

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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