COVID-19 economic recovery funds that Rwanda is eligible for

With the coronavirus having caused global economic recession countries are keen on looking for potential avenues to alleviate the impact of the crisis and boost recovery.

A number of interventions have been lined up by global institutions with Rwanda eligible to a number of them.  

 

Among funds Rwanda is eligible to is the $3 billion fund from the African Development Bank raised from a 3-year bond.

 

The fund will go into aspects such as to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure.

 

The fund will also be applied inflexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries which Rwanda is part of Africa's private sector.

The financier is yet to announce modalities of disbursement of the fund or eligibility countries.

The International Monetary Fund is also bracing to support economic recovery especially among developing economies where Rwanda is grouped.

International Monetary Fund Managing Director Kristalina Georgieva on Thursday this week said that they have about $1 trillion strong, financial capacity to place in developing countries’ defence, working closely with the World Bank and other International Financial Institutions (IFIs). 

Rwanda is classified as a developing country by the IMF and is eligible for support.

“And it is paramount we recognize the importance of supporting emerging market and developing economies to overcome the brunt of the crisis and help restore growth.  They find themselves particularly hard hit by a combination of health crisis, sudden stop of the world economy, capital flight to safety, and – for some – sharp drop in commodity prices. These countries are the main focus of our attention.  We have a considerable, $1 trillion strong, financial capacity to place in their defence, working closely with the World Bank and other International Financial Institutions (IFIs),” Georgieva said.

The support will go into economic recovery amidst such as existing debt and disrupted trade flows.

The funds among other aspects will be expected to restart supply chains and fill capital gaps in developing countries.

The African Export-Import Bank, which Rwanda is a member of also announced a $3-billion facility, named Pandemic Trade Impact Mitigation Facility (PATIMFA), to help African countries deal with the economic and health impacts of the COVID-19 pandemic.

The mitigation facility will provide financing to assist Afreximbank member countries to adjust in an orderly manner to the financial, economic and health services shocks caused by the COVID-19 pandemic.

From the facility, Rwanda could receive support through the central bank, and other financial institutions to meet trade debt payments that fall due and to avert trade payment defaults as well as stabilizing the foreign exchange resources to support critical imports under emergency conditions.

The facility will be available through direct funding, lines of credit, guarantees, cross-currency swaps and other similar instruments.

The COVID-19 pandemic is projected to cost the global economy up to $1 trillion as well as lead to a decline in global GDP growth.

Among the impacts expected is job losses, a slowdown in supply chains, low consumption due to reducing purchasing power among others.

cmwai@newtimesrwanda.com

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