The Executive Board of the International Monetary Fund (IMF) has approved an two-month extension for its staff to review Rwanda’s three-year Poverty Reduction and Growth Facility (PRGF).
“This is a technical extension that will allow the IMF team to complete the review of PRGF before the program ends,” Dmity Gershenson , the IMF resident representative Friday told The Sunday Times in a phone interview.
He noted that the decision was necessary to allow the board release the last batch of funds to support the programme before it ends.
The arrangement, approved with effect from June 12, 2006 was due to expire on June 11, 2009, but instead will now be in force until August 14, 2009.
The team’s report will be reviewed by the Executive Board in July to make a decision on the way forward for the programme specifically regarding funding.
If the review report is approved, Rwanda will receive USD 1.5 billion to support the program that allows low interest lending facility.
According to a press release by the Bretton Woods institution, the timetable for the sixth review under the IMF-supported program was delayed because of the need for an unscheduled fact-finding mission by the agency’s staff.
“This was carried out during late February and early March, following indications that the global crisis was significantly affecting Rwanda’s external and fiscal positions and its rate of growth,” the press release reads in part . The release also indicates that the delay of the final disbursement was partly due to the global economic crisis.
“The extension of the PRGF arrangement provides Fund staff the opportunity to assess and discuss policy measures designed to mitigate the impact of the global crisis on Rwanda, preserve macroeconomic stability, and sustain economic growth.”
Loans under the PRGF carry an annual interest rate of 0.5 percent, with repayments made semi-annually, beginning from 5½ years and ending 10 years after the disbursement.
Eligibility is based principally on the IMF’s assessment of a country’s per capita income, drawing on the cut off point for eligibility to World Bank concessional lending (currently 2007 per capita Gross National Income (GDP) of USD 1,095).
Launched in September 1999 by the IMF, PRGF programme aims at poverty reduction and growth more central to lending operations in its poorest member countries.