The IMF approved the second-year arrangement for Rwanda under the Enhanced Structural Adjustment Facility (ESAF) in an amount equivalent to SDR 23.8 million (about $32.77 million) to support the government's economic program. Rwanda's three-year ESAF arrangement was approved on June 24, 1998 (see Press Release 98/24, IMF Survey, July 6, 1998, page 216), in an original amount of SDR 71.4 million (about $98 million), of which SDR 23.8 million (about $33 million) has been disbursed. Today's decision provides Rwanda with another SDR 23.8 million to be disbursed during the second year, with SDR 9.5 million (about $13.1 million) available immediately.
In commenting on the Executive Board discussion on Rwanda, IMF Deputy Managing Director Shigemitsu Sugisaki said:
"Directors commended the authorities for maintaining macro-economic stability, improving fiscal management and transparency, and making progress with structural reforms under the 1998/99 program--despite a difficult security environment and institutional capacity constraints. This allowed Rwanda to achieve solid economic growth and low inflation.
"Directors stressed the importance of improving tax and customs administration and accelerating the preparation of the value-added tax. They also attached particular importance to achieving the targeted reductions in defense outlays in 1999 and 2000.
Directors stressed the need to enhance governance and welcomed the steps taken to improve budgetary transparency and control.
The government's medium-term strategy aims at achieving high and sustainable growth and rapid poverty reduction. The macro-economic objectives for 1999-2002 are to achieve annual real GDP growth of 6 percent while keeping inflation at or below 3 percent a year. For the year 2000, revenues are projected to improve to 10.7 percent of GDP.Page 398
The government will also be implementing a strategy to reduce poverty, focusing on improving agricultural productivity, promoting small and medium-size enterprises in rural and urban areas, and encouraging the expansion of the coffee and tea sectors through liberalization and privatization.
Rwanda joined the IMF on September 30, 1963; its quota is SDR 80.1 million (about $110.3 million). Its outstanding use of IMF financing currently totals SDR 45.8 million (about $63 million).
Press Release No. 99/53, November 19