The International Monetary Fund (IMF) on Tuesday said Rwanda’s economic performance is favourable and the growth in various sectors of the economy is also satisfactory.
An IMF statement obtained by PANA in New York said that a mission, led by Mr. Paulo Drummond, visited Kigali, Rwanda, between 22 September and 7 October to conduct the 2014 Article IV Consultation and the second review of the economic programme supported by the Policy Support Instrument (PSI).
It quoted Mr. Drummond, as saying: “Rwanda’s recent economic performance has been favourable and growth in the first half of 2014 rebounded to 6.8 per cent. Agriculture output also recovered due to favourable climate conditions.”
He said that the pick-up in growth was broad-based, including construction, real estate, and services, and consumer price inflation remained low at below 1 percent at end-August, driven by low import and food prices.
He stated: “The main objectives of the 2014/15 budget remain within reach: greater revenue mobilization, targeting an increase of 1 percentage point in the tax revenue ratio to 16 per cent of Gross Domestic Product (GDP), containing current spending while protecting priority spending and limiting domestic financing to avoid crowding out the private sector.”
The IMF official also said that aid flows had increased, but donor disbursements were expected to be about 1 per cent of GDP lower relative to the 2014/15 budget.
Mr. Drummond said the mission welcomed the decision by the Rwandan authorities to respond and keep the overall budget in line with available resources, noting that, “policy performance under the IMF-supported programme remains satisfactory”.
“All quantitative indicators for end-June 2014 were met. The fiscal position through end-June 2014 was broadly in line with PSI objectives, except for slightly less than anticipated revenue collection, the monetary programme was on target and structural reforms advanced broadly as planned.
“Looking ahead, economic growth is projected at 6 per cent in 2014, and end-year inflation is expected to be 3.2 per cent, and international reserves are targeted to remain at about 4 months of imports,” he stated.
The statement said the Rwandan authorities and the IMF mission discussed economic policies and reforms to maintain economic stability and manage a successful transition from a public sector-led, aid-dependent economy to a more private sector-led economy in the medium term.
It, however, said the key to sustaining high growth would be the implementation of the authorities’ strategy to further reduce the cost of doing business and remove impediments to private sector development.
In this regard, the mission welcomed the government’s intention to improve project implementation, including through increased oversight, and prepare a targeted public investment plan for infrastructure projects in priority areas, such as water, energy, and transport.
It also praised the Rwandan authorities’ plan to explore all concessional financing options, private sector participation, including through public private partnership (PPP), before considering non-concessional resources.
The IMF mission met with Minister of Finance and Economic Planning, Mr Claver Gatete, Governor of the National Bank of Rwanda, Mr. John Rwangombwa, as well as with other senior government officials, development partners and representatives of the business community and civil society.