We have no doubt in Rwanda's poverty figures – says IMF chief

The International Monetary Fund (IMF) does not doubt statistics contained in the fourth Rwanda Integrated Household Living Conditions Survey (ECV4) report, which indicated that Rwanda’s poverty levels reduced by 5.8 per cent in the last three years.
Redifer (C) addresses a joint media briefing with government officials at the Ministry of Finance and Economic Planning offices in Kigali yesterday. Looking on is Tobias Roy, a senior economist for African Department, and Finance minister Claver Gatete (with back to camera). (Doreen Umutesi)
Redifer (C) addresses a joint media briefing with government officials at the Ministry of Finance and Economic Planning offices in Kigali yesterday. Looking on is Tobias Roy, a senior economist for African Department, and Finance minister Claver Gatete (with back to camera). (Doreen Umutesi)

The International Monetary Fund (IMF) does not doubt statistics contained in the fourth Rwanda Integrated Household Living Conditions Survey (ECV4) report, which indicated that Rwanda’s poverty levels reduced by 5.8 per cent in the last three years.

This comes after French news media, France24, published a controversial story quoting, of all sources, a Belgian professor of law and politics Filip Reyntjens and several other anonymous voices, that Rwanda manipulated its recent poverty figures.

Reacting to the article that has come under heavy criticism for its lack of accuracy, fairness and objectivity, Laure Redifer, a senior IMF official, said: “I have seen with my own eyes the transformation in Rwanda over the years, which really confirms what the figures on poverty are saying.”

Redifer was speaking at a joint media briefing with government officials, in Kigali, yesterday. The briefing, which was attended by Finance and Economic Planning minister Claver Gatete and central bank governor John Rwangombwa, among other senior officials, was primarily aimed at announcing findings and recommendations of the IMF delegation, after the review.

“We have no reason to doubt the numbers. At least from my personal experience in Rwanda, what the numbers say can easily be confirmed on ground,” Redife said.

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Redifer (L) addresses a press conference in Kigali yesterday as Minister Gatete looks on.

Redifer has been heading a delegation of senior IMF officials in the country since the last week of October and met with various government officials for the fourth review of the country’s economic and financial programme.

The programme is monitored under the IMF’s Policy Support Instrument (PSI) which is designed for countries that ‘do not need balance of payments financial support, but guides governments on how to design effective economic programmes.’

Such programmes, once approved by the IMF’s Executive Board, act as signals to donors, multilateral development banks, and markets, of the Fund’s endorsement of a country’s economic policies.

Reliable statistics

France24, in an article published on Monday, claimed that Rwandan authorities manipulated the latest official statistics on poverty to make it look like it was going down, while much of the source data suggested it was actually on the increase. But Redifer rebutted the article and the claims of the sources, saying instead that the IMF is impressed by the quality and reliability of Rwandan statistics.

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(L-R) Laure Redifer, a senior IMF official, Finance Minister Claver Gatete and Central Bank Governor, John Rwangombwa, during a press conference on the review of Rwanda’s economic and financial prospects.

Minister Gatete also dismissed the allegations and lashed out at the French media for quoting Professor Reyntjens who he said, cannot be regarded as an expert on Rwanda let alone on matters of poverty economics.

“The model used by our National Institute of Statistics of Rwanda (NISR) to calculate these numbers is published on its website for all to see, to ensure transparency and international professional standards,” said Gatete, adding that there was no room for politics in the numbers.

In a press statement issued on Tuesday, NISR director-general Yusuf Murangwa also dismissed the claims that Rwanda conveniently changed the definition of poverty to suit its purposes, as ‘fundamentally wrong.’

“There was no change to the definition of poverty in Rwanda [as alleged by the article]. It has remained fixed at 2,500 calories since the first EICV in 2000. That baseline is high in comparative perspective,” Murangwa said in the statement.

According to the article, Rwanda allegedly manipulated its latest update on poverty to make it look like levels dropped by 5.8 yet it allegedly increased by 6 per cent; but this claim has been received by widespread scorn and condemnation, in and out of Rwanda.

Stronger growth in 2015

Meanwhile, in a joint government and IMF statement issued yesterday, Minister Gatete announced that Rwanda’s economic performance in 2015 will be stronger than previously anticipated by both parties.

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Governor, John Rwangombwa, during the press conference responds to the question on treasury bonds.

The minister noted that growth in the first half of the year averaged 7.3 percent with construction and services performing particularly strongly while agriculture and manufacturing also grew roughly in line with the projections.

“Therefore, projected GDP growth for 2015 has been revised upward from 6.5 to 7.0 per cent,” Gatete announced, yesterday.

Consumer price inflation is also expected to remain lower than 5 per cent for the reminder of the year in spite of the higher food and utility prices recorded in the month of September.

Regarding Rwanda’s performance under the IMF’s policy support instrument, Redifer said her team was impressed and explained that the government’s policies, as of end of June this year, were consistent with expectations.

“Significant progress was made on structural reforms especially on tax policy and administration,” she said.

Doubtful 2016

Although 2015 prospects are turning out to be better than earlier anticipated, the IMF delegation said 2016 looks doubtful on account of external risks in the global economy which is likely to negatively affect Rwanda’s own growth prospects.

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Rwanda Revenue Authority Commissioner General Richard Tusabe explains to journalists yesterday on how domestic tax collection will boost Rwanda’s economic and financial growth. (All photos by Doreen Umutesi)

Redifer explained that in light of lower global commodity prices and weaker growth prospects in the country’s main export markets which have already affected mining activities, the performance of Rwanda’s exports in the near term is expected to drop substantially.

“This will put pressure on the balance of payments and the mission (IMF) expects economic growth in 2016 to moderate to between 6 and 6.5 percent, lower than 7 per cent previously projected,” Redifer announced.

IMF officials encouraged government to take steps to tighten economic policies in response to the external risks by, among others, ensuring exchange rate flexibility-a monetary system that allows the exchange rate to be determined by supply and demand.

The IMF delegation was also briefed about the government’s forward-looking structural reforms aimed at strengthening the efficiency of Rwanda’s public spending investment, tax compliance and broadening of the country’s tax base.

Asked whether the weaker 2016 growth prospects won’t have a negative impact on the mobilsation of domestic revenues, Rwanda Revenue Authority Commissioner General Richard Tusabe said the negative impact, if any, will be manageable.

“Yes, weaker growth may have a negative impact on our domestic tax collection but we intend to compensate that by boosting compliance levels on the side of tax payers as well as improving efficiency on our own side,” said Tusabe. 

editorial@newtimes.co.rw

 

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