Rwanda is set to implement the International Monetary Fund (IMF) recommendations contained in the memorandum on economic and financial policies report.
The report by the IMF highlights the recent economic development in Rwanda and implementation of the country’s economic program under the three-year Policy Support Instrument (PSI).
One of the recommendations from the first review carried out in December 2010 is to expedite Revenue Authority’s (RRA) mandate to collect contributions on behalf of the Rwanda Social Security Board.
RRA is also mandated to audit the Social Security Fund of Rwanda and RAMA, which were recently merged to form the Rwanda Social Security Board.
In a letter of intent to IMF, Rwanda said it is the process of implementing the recommendations.
Finance Minister, John Rwangombwa, told Business Times that the law is expected to be passed before the end of August 2011.
“It’s not a problem because RRA has already started collecting both types of contributions and we agreed on the time,” Rwangombwa said.
All other structural benchmarks under the PSI program for end-December 2010 were met, like the law establishing National Export Strategy approved in April. The PSI is set to expire on June 29, 2013.
According to the MEFP, structural reforms are broadly on track and that performance under the PSI program has been satisfactory.
“The country is now on track to achieve access to water, health and education-related Millennium Development Goals (MDGs),” the letter reads in part.
Rwanda has also maintained a good track record in implementing the Economic Development and Poverty Reduction Strategy (EDPRS) with 80 per cent of targets being met across different clusters since the launch of the strategy in 2008.
However, the IMF report cited lack of capacity and data that limited coordination among relevant agencies; and have hampered effective implementation and monitoring of the EDPRS strategy.
Subsequently, the government is focusing on building institutional capacity like the National Institute of Statistics in an effort to improve the quality of statistics availed.
In the letter, it is conceded the government stands ready to achieve sustained economic growth and poverty reduction.
“We continue to make progress with our economic program,” it reads.
Rwangombwa said government has made progress in Public Financial Management where official government financial statements are published annually.
“It’s a big achievement and we are doing not because IMF recommended it but because we want to strengthen our institutions,” he emphasised.
IMF also welcomed the initiative to access finance through Savings and Credit Cooperatives (SACCOs) but urged to address the risks of the large roll-out adequately through hiring and training of more inspectors to mitigate such risks.
Rwanda is projecting sustainable economic growth and manageable inflation currently at 4.5 per cent.
The central bank says it is committed to regularly review inflationary developments and tighten monetary policy, if needed, to anchor inflation expectations.