Abstract
This paper discusses key findings of the Sixth Review under the Poverty Reduction and Growth Facility (PRGF) for Rwanda. All end-2008 quantitative performance criteria were met, and performance through March 2009 was broadly satisfactory. IMF staff recommends completion of the sixth review under the PRGF arrangement based on Rwanda’s performance and understandings reached on the macroeconomic program for 2009/10. IMF staff also supports the authorities’ request for waivers of nonobservance of performance criteria on nonconcessional borrowing and nonintroduction of multiple currency practices.
VI. Appendix I. Rwanda: Relations with the Fund
(As of June 30, 2009)
I. Membership Status: Joined: September 30, 1963; Article VIII
II. General Resources Account:
| SDR Million | %Quota | |
|---|---|---|
| Quota | 80.10 | 100.00 |
| Fund holdings of currency | 80.11 | 100.02 |
| Reserve Position | 0.00 | 0.00 |
| Holdings Exchange Rate |
| SDR Million | %Quota | |
|---|---|---|
| Quota | 80.10 | 100.00 |
| Fund holdings of currency | 80.11 | 100.02 |
| Reserve Position | 0.00 | 0.00 |
| Holdings Exchange Rate |
III. SDR Department:
| SDR Million | %Allocation | |
|---|---|---|
| Net cumulative allocation | 13.70 | 100.00 |
| Holdings | 20.40 | 148.94 |
| SDR Million | %Allocation | |
|---|---|---|
| Net cumulative allocation | 13.70 | 100.00 |
| Holdings | 20.40 | 148.94 |
IV. Outstanding Purchases and Loans:
| SDR Million | %Quota | |
| PRGF Arrangements | 8.55 | 10.68 |
| SDR Million | %Quota | |
| PRGF Arrangements | 8.55 | 10.68 |
V. Latest Financial Arrangements:
| Type | Date of Arrangement |
Expiration Date |
Amount Approved (SDR Million) |
Amount Drawn (SDR Million) |
|---|---|---|---|---|
| PRGF | June 12, 2006 | August 14, 2009 10 | 8.01 | 6.84 |
| PRGF | August 12, 2002 | June 11,2006 | 4.00 | 4.00 |
| PRGF | June 24, 1998 | April 30, 2002 | 71.40 | 61.88 |
| Type | Date of Arrangement |
Expiration Date |
Amount Approved (SDR Million) |
Amount Drawn (SDR Million) |
|---|---|---|---|---|
| PRGF | June 12, 2006 | August 14, 2009 10 | 8.01 | 6.84 |
| PRGF | August 12, 2002 | June 11,2006 | 4.00 | 4.00 |
| PRGF | June 24, 1998 | April 30, 2002 | 71.40 | 61.88 |
VI. Projected Payments to Fund2
(SDR Million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
| 2009 | 2010 | 2011 | 2012 | 2013 | |
| Principal | 0.06 | 0.40 | 0.68 | 1.14 | |
| Charges/Interest | 0.02 | 0.04 | 0.04 | 0.04 | 0.04 |
| Total | 0.02 | 0.10 | 0.44 | 0.72 | 1.18 |
| Forthcoming | |||||
| 2009 | 2010 | 2011 | 2012 | 2013 | |
| Principal | 0.06 | 0.40 | 0.68 | 1.14 | |
| Charges/Interest | 0.02 | 0.04 | 0.04 | 0.04 | 0.04 |
| Total | 0.02 | 0.10 | 0.44 | 0.72 | 1.18 |
VII. Implementation of HIPC Initiative:
| Enhanced framework | |||||
| I Commitment of HIPC assistance | |||||
| Decision point date | Dec 2000 | ||||
| Assistance committed by all creditors (US$ million) 11 | 695.50 | ||||
| Of which: IMF assistance (US$ million) | 63.40 | ||||
| (SDR equivalent in millions) | 46.79 | ||||
| Completion point date | Apr 2005 | ||||
| II Delivery of IMF assistance (SDR million) | |||||
| Amount disbursed | 46.79 | ||||
| Interim assistance | 14.45 | ||||
| Completion point | 32.34 | ||||
| Additional disbursement of interest income 12 | 3.77 | ||||
| Total disbursements | 50.56 | ||||
| Enhanced framework | |||||
| I Commitment of HIPC assistance | |||||
| Decision point date | Dec 2000 | ||||
| Assistance committed by all creditors (US$ million) 11 | 695.50 | ||||
| Of which: IMF assistance (US$ million) | 63.40 | ||||
| (SDR equivalent in millions) | 46.79 | ||||
| Completion point date | Apr 2005 | ||||
| II Delivery of IMF assistance (SDR million) | |||||
| Amount disbursed | 46.79 | ||||
| Interim assistance | 14.45 | ||||
| Completion point | 32.34 | ||||
| Additional disbursement of interest income 12 | 3.77 | ||||
| Total disbursements | 50.56 | ||||
VIII. Implementation of MDRI Assistance
| I Total Debt Relief (SDR Million) 13 | 52.74 | |||||
| Of which: MDRI | 20.19 | |||||
| HIPIC | 32.55 | |||||
| II Debt Relief by Facility (SDR million) | ||||||
| Delivery Date | GRA | PRGF | Total | |||
| January 2006 | NA | 52.74 | 52.74 | |||
| I Total Debt Relief (SDR Million) 13 | 52.74 | |||||
| Of which: MDRI | 20.19 | |||||
| HIPIC | 32.55 | |||||
| II Debt Relief by Facility (SDR million) | ||||||
| Delivery Date | GRA | PRGF | Total | |||
| January 2006 | NA | 52.74 | 52.74 | |||
Decision point—point at which the IMF and the World Bank determine whether a country qualifies for assistance under the HIPC Initiative and decide on the amount of assistance to be committed.
Interim assistance—amount disbursed to a country during the period between decision and completion points, up to 20 percent annually and 60 percent in total of the assistance committed at the decision point (or 25 percent and 75 percent, respectively, in exceptional circumstances).
Completion point—point at which a country receives the remaining balance of its assistance committed at the decision point, together with an additional disbursement of interest income as defined in footnote 3 above. The timing of the completion point is linked to the implementation of pre-agreed key structural reforms (i.e., floating completion point).
IX. Safeguards Assessments:
Under the Fund’s safeguards assessment policy, the National Bank of Rwanda (NBR) was subject to a safeguards assessment with respect of the PRGF arrangement approved on June 12, 2006. The update assessment proposed recommendations to address continuing vulnerabilities in the external audit and financial reporting areas. The implementation of these measures is being monitored by IMF staff.
X. Exchange System:
The currency of Rwanda is the Rwandan franc. Under the revised classification of the exchange rate arrangements, Rwanda has “other managed arrangement”. The official reference exchange rate is determined daily by the National Bank of Rwanda using a moving average of commercial banks and NBR transactions. From January 2009, the averaging period has been extended from 5 to 10 days. The NBR buys and sells foreign exchange from commercial banks on demand at the rates that differ from official rate by a certain margin. On December 1998, Rwanda accepted the obligations under Article VIII, Sections 2, 3 and 4 of the IMF and maintains a system free of restrictions on the making of payments and transfers for current international transactions.
XI. Article IV Consultation:
Rwanda is on the revised 24–month consultation cycle. The Executive Board discussed the staff report for the 2008 Article IV consultation (Country Report No. 09/58) on January 12, 2009.
XII. FSAP Participation, ROSCs, and OFC Assessments:
A Report on Observance of Standards and Codes on Fiscal Transparency (ROSC) was issued in July 2003. A Financial Sector Assessment Program (FSAP) took place in February 2005. Rwanda has not had an Offshore Financial Center (OFC) assessment.
XIII. Technical Assistance:
| 2004 | AFRITAC East expert on financial regulations. |
| 2004 | AFRITAC East mission on treasury reforms. |
| 2004 | AFRITAC East expert on implementing cash flow planning and banking arrangements. |
| 2004 | FAD tax administration expert on strengthening of revenue administration. |
| 2004 | FAD mission on revenue administration. |
| 2004 | MFD/LEG mission on Anti-Money Laundering and Combating the Financing of Terrorism. |
| 2004 | MFD expert on banking supervision and regulation. |
| 2004 | MFD expert on monetary policy, monetary operations, and money markets. |
| 2004 | MFD missions on on-site banking supervision. |
| 2005 | AFRITAC East expert follow up on cash management. |
| 2005 | MFD/LEG mission on Anti-Money Laundering and Combating the Financing of Terrorism. |
| 2005 | MFD mission on financial statements of specific bank. |
| 2005 | MFD-WB joint FSAP mission. |
| 2005 | LEG mission on customs legislation. |
| 2005 | STA mission on Balance of Payments statistics. |
| 2005 | LEG mission on tax legislation. |
| 2005 | FAD mission on public accounting: decentralized accounting for central government. |
| 2005 | FAD expert on tax administration. |
| 2005 | MFD resident expert on monetary operations, monetary policy, money markets. |
| 2005 | MFD expert on banking supervision. |
| 2005 | LEG mission on drafting an amendment to the banking law. |
| 2005 | MFD mission on banking supervision and bank restructuring. |
| 2006 | AFRITAC East experts on establishing intergovernmental fiscal unit in the MOF. |
| 2006 | FAD advisor trade facilitation. |
| 2006 | MFD FSAP-follow up advisory mission on monetary and foreign exchange operations and NBR internal audit. |
| 2006 | LEG mission to strengthen legal and regulatory framework for bank supervision. |
| 2006 | AFRITAC East advisors on finalization of OBL and financial regulations |
| 2007 | AFRITAC East advisors on workshops for implementation of OBL and financial regulations. |
| 2007 | MCM expert on bank restructuring. |
| 2007 | MCM expert on foreign exchange operations. |
| 2008 | LEG mission to assist the Ministry of Finance in modernizing the tax system. |
| 2008 | LEG mission on banking legislation. |
| 2008 | MCM expert on foreign exchange operations. |
| 2008 | MCM mission to assist in building up internal audit in the central bank. |
| 2008 | FAD expert on revenue administration. |
| 2008 | AFRITAC East advisors on (i) improving the budget preparation process and budget accounting, and (ii) changing to the GFS2001– based economic classification (jointly with STA). |
| 2008 | MCM mission on monetary policy operations, foreign exchange operations, and assessment of the financial health of banks. |
| 2008 | AFRITAC East advisors on enhancement of national accounts estimation. |
| 2009 | MCM mission on liquidity management. |
| 2009 | MCM mission on bank supervision. |
| 2009 | STA mission on rebasing consumer and producer price indices. |
| 2009 | FAD/AFRITAC East mission to review the progress and set the program for TA in budget reform and PFM. |
| 2009 | FAD/AFRITAC East mission on customs risk management and valuation. 2009 AFRITAC East advisors on (i) enhancing comprehensiveness and transparency of the fiscal budget and (ii) reform strategy for introduction of program budgeting. |
| 2009 | AFRITAC East advisors on quarterly GDP compilation. |
| 2009 | AFRITAC East workshop on national accounts. |
| 2009 | AFRITAC East advisors on (i) developing a framework for adopting a capital charge for market risk, (ii) enhancements to offsite surveillance system, and (iii) payment system modernization. |
| 2009 | AFRITAC East advisors on operational policy development and compliance management in revenue administration. |
| 2009 | AFRITAC East workshop on strengthening tax audit and collection enforcement. |
| 2004 | AFRITAC East expert on financial regulations. |
| 2004 | AFRITAC East mission on treasury reforms. |
| 2004 | AFRITAC East expert on implementing cash flow planning and banking arrangements. |
| 2004 | FAD tax administration expert on strengthening of revenue administration. |
| 2004 | FAD mission on revenue administration. |
| 2004 | MFD/LEG mission on Anti-Money Laundering and Combating the Financing of Terrorism. |
| 2004 | MFD expert on banking supervision and regulation. |
| 2004 | MFD expert on monetary policy, monetary operations, and money markets. |
| 2004 | MFD missions on on-site banking supervision. |
| 2005 | AFRITAC East expert follow up on cash management. |
| 2005 | MFD/LEG mission on Anti-Money Laundering and Combating the Financing of Terrorism. |
| 2005 | MFD mission on financial statements of specific bank. |
| 2005 | MFD-WB joint FSAP mission. |
| 2005 | LEG mission on customs legislation. |
| 2005 | STA mission on Balance of Payments statistics. |
| 2005 | LEG mission on tax legislation. |
| 2005 | FAD mission on public accounting: decentralized accounting for central government. |
| 2005 | FAD expert on tax administration. |
| 2005 | MFD resident expert on monetary operations, monetary policy, money markets. |
| 2005 | MFD expert on banking supervision. |
| 2005 | LEG mission on drafting an amendment to the banking law. |
| 2005 | MFD mission on banking supervision and bank restructuring. |
| 2006 | AFRITAC East experts on establishing intergovernmental fiscal unit in the MOF. |
| 2006 | FAD advisor trade facilitation. |
| 2006 | MFD FSAP-follow up advisory mission on monetary and foreign exchange operations and NBR internal audit. |
| 2006 | LEG mission to strengthen legal and regulatory framework for bank supervision. |
| 2006 | AFRITAC East advisors on finalization of OBL and financial regulations |
| 2007 | AFRITAC East advisors on workshops for implementation of OBL and financial regulations. |
| 2007 | MCM expert on bank restructuring. |
| 2007 | MCM expert on foreign exchange operations. |
| 2008 | LEG mission to assist the Ministry of Finance in modernizing the tax system. |
| 2008 | LEG mission on banking legislation. |
| 2008 | MCM expert on foreign exchange operations. |
| 2008 | MCM mission to assist in building up internal audit in the central bank. |
| 2008 | FAD expert on revenue administration. |
| 2008 | AFRITAC East advisors on (i) improving the budget preparation process and budget accounting, and (ii) changing to the GFS2001– based economic classification (jointly with STA). |
| 2008 | MCM mission on monetary policy operations, foreign exchange operations, and assessment of the financial health of banks. |
| 2008 | AFRITAC East advisors on enhancement of national accounts estimation. |
| 2009 | MCM mission on liquidity management. |
| 2009 | MCM mission on bank supervision. |
| 2009 | STA mission on rebasing consumer and producer price indices. |
| 2009 | FAD/AFRITAC East mission to review the progress and set the program for TA in budget reform and PFM. |
| 2009 | FAD/AFRITAC East mission on customs risk management and valuation. 2009 AFRITAC East advisors on (i) enhancing comprehensiveness and transparency of the fiscal budget and (ii) reform strategy for introduction of program budgeting. |
| 2009 | AFRITAC East advisors on quarterly GDP compilation. |
| 2009 | AFRITAC East workshop on national accounts. |
| 2009 | AFRITAC East advisors on (i) developing a framework for adopting a capital charge for market risk, (ii) enhancements to offsite surveillance system, and (iii) payment system modernization. |
| 2009 | AFRITAC East advisors on operational policy development and compliance management in revenue administration. |
| 2009 | AFRITAC East workshop on strengthening tax audit and collection enforcement. |
XIV. Resident Representative:
Mr. Dmitry Gershenson assumed his duties as Resident Representative in February 2009.
XV. Management Visit:
The Deputy Managing Director, Mr. Portugal, visited Rwanda during May 3–5, 2007.
VII. Appendix II. Rwanda: Joint Bank-Fund Work Program VIII. August 2009 - August 2010
| Title | Products/Activity | Provisional timing of mission (if relevant) |
Expected delivery date |
|---|---|---|---|
| I. Mutual Information on Relevant Work Program | |||
| Bank Work Program | A. Strategy and Analytical Work | ||
| Education–Country Status Report | Ongoing | ||
| First Rwanda: Financial Sector Development Program (FSDP) II | March 2010 | ||
| Technical Assistance for Public Expenditure Management in Rwanda | June 2010 | ||
| Finance and Private Sector Dialogue | Ongoing | ||
| B. Ongoing and New Projects | |||
| Urgent Electricity Rehabilitation | July 2009 | ||
| Support to Agricultural Policy Reforms | Ongoing | ||
| Decentralization and Community Development | June 2010 | ||
| Public Sector Capacity Building Project | Ongoing | ||
| E-Rwanda | Ongoing | ||
| Regional Trade Facilitation | Ongoing | ||
| Transport Sector Development | Ongoing | ||
| Competitiveness and Enterprise Project | Ongoing | ||
| IMF Work Program | A. Missions | ||
| Staff visit | October 2009 | November 2009 | |
| Discussions on a new program | February/March 2010 | May 2010 | |
| B. Analytical Work | |||
| Study on macroeconomic convergence among the EAC countries | March 2010 | ||
| Spillovers from the world economic crisis to the EAC countries | April 2010 | ||
| Foreign exchange reserve adequacy in the EAC countries | January 2010 | ||
| C. Technical Assistance | |||
| Fiscal: Tax and customs administration; revenue forecasting; PFM | |||
| Monetary: Monetary policy operations; bank liquidity; interbank markets in local currency and foreign exchange | |||
| Financial: Payment systems; bank supervision | |||
| Statistics: National accounts; balance of payments; government Finance | |||
| II. Request for Work Program Inputs | |||
| Bank Request to Fund | Impact of the global economic crisis on key macro indicators and growth in Rwanda | Ongoing | |
| Sharing macro-framework updates | As needed | ||
| Fund Request to Bank | Assessment of key infrastructure projects undertaken by the government. | As needed | |
| Assessment of the PFM and public service reform program. | As needed | ||
| III. Agreement on Joint Products | |||
| Joint products | Public and External Debt Sustainability Analysis. | May 2010 | |
| Collaborate together with other development partners on the annual review of general budget support. | March 2010 | ||
| Collaborate on PFM reform program. | Ongoing | ||
| Collaborate on financial sector reform program. | Ongoing | ||
| Title | Products/Activity | Provisional timing of mission (if relevant) |
Expected delivery date |
|---|---|---|---|
| I. Mutual Information on Relevant Work Program | |||
| Bank Work Program | A. Strategy and Analytical Work | ||
| Education–Country Status Report | Ongoing | ||
| First Rwanda: Financial Sector Development Program (FSDP) II | March 2010 | ||
| Technical Assistance for Public Expenditure Management in Rwanda | June 2010 | ||
| Finance and Private Sector Dialogue | Ongoing | ||
| B. Ongoing and New Projects | |||
| Urgent Electricity Rehabilitation | July 2009 | ||
| Support to Agricultural Policy Reforms | Ongoing | ||
| Decentralization and Community Development | June 2010 | ||
| Public Sector Capacity Building Project | Ongoing | ||
| E-Rwanda | Ongoing | ||
| Regional Trade Facilitation | Ongoing | ||
| Transport Sector Development | Ongoing | ||
| Competitiveness and Enterprise Project | Ongoing | ||
| IMF Work Program | A. Missions | ||
| Staff visit | October 2009 | November 2009 | |
| Discussions on a new program | February/March 2010 | May 2010 | |
| B. Analytical Work | |||
| Study on macroeconomic convergence among the EAC countries | March 2010 | ||
| Spillovers from the world economic crisis to the EAC countries | April 2010 | ||
| Foreign exchange reserve adequacy in the EAC countries | January 2010 | ||
| C. Technical Assistance | |||
| Fiscal: Tax and customs administration; revenue forecasting; PFM | |||
| Monetary: Monetary policy operations; bank liquidity; interbank markets in local currency and foreign exchange | |||
| Financial: Payment systems; bank supervision | |||
| Statistics: National accounts; balance of payments; government Finance | |||
| II. Request for Work Program Inputs | |||
| Bank Request to Fund | Impact of the global economic crisis on key macro indicators and growth in Rwanda | Ongoing | |
| Sharing macro-framework updates | As needed | ||
| Fund Request to Bank | Assessment of key infrastructure projects undertaken by the government. | As needed | |
| Assessment of the PFM and public service reform program. | As needed | ||
| III. Agreement on Joint Products | |||
| Joint products | Public and External Debt Sustainability Analysis. | May 2010 | |
| Collaborate together with other development partners on the annual review of general budget support. | March 2010 | ||
| Collaborate on PFM reform program. | Ongoing | ||
| Collaborate on financial sector reform program. | Ongoing | ||
On June 4, the PRGF was extended from June 11, 2009 to August 14, 2009, to allow time for the completion of the sixth and final review, and for making the final disbursement under the PRGF arrangement.
When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts can not be added.
Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.
The Multilateral Debt Relief Initiative (MDRI) provides 100 percent debt relief to eligible member countries that are qualified for the assistance. The debt relief covers the full stock of debt owed to the Fund as of end-2004 which remains outstanding at the time the member qualifies for such debt relief. The MDRI is financed by bilateral contributions and the Fund’s own resources, as well as the resources already disbursed to the member under the HIPC Initiative (see Section VII above).