The International Monetary Fund (IMF) delegation that has been in Rwanda has hailed the country’s performance being satisfactory under the first review of its programme with the country.
The team led, by Catherine McAuliffe, visited Rwanda from October 12 to 26, 2010 to conduct the 2010 Article IV Consultation and the first review under of the Policy Support Instrument programme which is supported by IMF.
They also met with a number of different government officials, including the Minister of Finance and Economic Planning, John Rwangombwa, and the Governor of the National Bank of Rwanda, François Kanimba.
According to the statement issued by IMF, Rwanda’s structural reforms are on track, public financial management has continued to improve with a further roll-out of the government financial information system, while revenue administration has been strengthened through a consolidated revenue collection arrangement across all agencies.
“Rwanda’s economy is recovering from the external and domestic shocks of the past two years. After slowing down to 4.1 percent in 2009 from 11.2 percent in 2008,” a statement reads.
The report indicates that real gross domestic product (GDP) growth is expected to reach about 6 percent in 2010, driven mainly by strong growth in services, particularly in the telecom sub-sector, construction, and exports.
Even though credit to the private sector has grown significantly less than expected for the year. For the first time in many years, inflation has remained below 5 percent in 2010.
The fiscal stimulus of the past two years is unwinding, while pro-poor spending has been protected. The external payments position has improved with a build-up of international reserves.
The team also highlighted risks to the outlook that include slower pickup in external demand and domestic credit, as well as uncertainties about global food and fuel prices.
The mission hailed government’s commitment to continue pursuing broad-based structural reforms, particularly in the areas of public financial management, tax administration, and financial sector reform to boost competitiveness and growth.
IMF also advised that government should continue reforms toward greater exchange rate flexibility to enhance monetary policy effectiveness.
“These reforms will also help Rwanda make progress toward meeting its Millennium Development Goals,” official note indicates.
The mission commented that authorities are wisely pursuing growth-enhancing reforms by focusing capital spending on key infrastructure bottlenecks, building the necessary supervisory capacity to accompany financial sector deepening, and further strengthening economic management capacity, like improving the quality of economic statistics.