Press Release No. 14/159

Press Release: Statement by the IMF Mission at the Conclusion of its Visit to Rwanda

April 7, 2014

An International Monetary Fund (IMF) mission, led by Mr. Paulo Drummond, visited Kigali during March 25-April 6 to conduct the first review under the Policy Support Instrument (PSI). ¹ The mission met with Minister of Finance and Economic Planning Amb. Claver Gatete, Governor of the National Bank of Rwanda Hon. John Rwangombwa, as well as with other senior government officials, development partners, and representatives of the business community and civil society. The mission wishes to thank the authorities for the constructive discussions, and expresses its appreciation for the kind hospitality provided during its visit.

At the conclusion of the mission to Kigali, Mr. Drummond issued the following statement:

“Rwanda’s economic growth slowed to 4.6 percent in 2013, reflecting weak agriculture as well as aid-related delays in the implementation of government financed projects. Meanwhile, inflation has been subdued, reflecting weak activity and low food and fuel import prices.

“Performance under the IMF-supported program remains satisfactory. Structural reforms advanced as planned, and the government is moving ahead with much-needed revenue mobilization efforts.

“For 2014, economic growth is projected at 6 percent, driven by a rebound in agriculture and a pick-up in the services sector. This will require firm execution of the government’s investment program. Inflation is expected to be about 5 percent at end-2014.

“The mission reached a preliminary agreement with the authorities on economic policies for the remainder of 2014 that are expected to support near term growth and strengthen resilience to shocks.  In particular, the 2014/15 budget, to be presented to parliament in June, is in line with PSI objectives: it sustains efforts on revenue mobilization, adjusts current spending to available resources, minimizes domestic financing, and protects priority spending.  On monetary policy, the National Bank of Rwanda plans to continue to pursue a prudent monetary stance. The agreed monetary program is consistent with keeping inflation low, preserves the level of foreign reserves, and allows for exchange rate flexibility.

“The IMF's Executive Board is expected to consider the first PSI review in May 2014.”

¹ The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support. The PSI helps countries design effective economic programs that, once approved by the IMF's Executive Board, signal to donors, multilateral development banks, and markets the Fund's endorsement of a member's policies (see http://www.imf.org/external/np/exr/facts/psi.htm). Details on Rwanda’s current PSI are available at www.imf.org/rwanda.