By ALEX NGARAMBE, Rwanda Today
In Summary
- Rwanda’s economic growth in 2014 is expected to hit about 6 per cent, rising to the longer-term growth rate of 7.5 per cent in the medium term.
- The economy is recovering from the disruptions induced by aid suspension through mid-2013, with growth bouncing back in the first half of 2014.
The International Monetary Fund has lauded
Rwanda’s fiscal policies, which have propelled the country’s economic
recovery from the slowdown experienced in 2012.
The country’s performance was highlighted by the
executive board of the in the just completed second review of Rwanda’s
economic performance.
IMF noted that the country’s fiscal policies remain prudent and the objectives of the FY2014/15 budget are within reach.
In the medium term, fiscal deficits are projected to decline with limited recourse to domestic financing.
Strengthening the domestic revenue base is an
important objective, including reducing aid dependency, and the
authorities should vigorously pursue improvements in revenue
administration and tax policy improvements in agriculture, mining and
property.
“The Rwandan authorities are to be commended for
their strong implementation of the economic programme supported by the
policy support instrument carried out against a challenging economic
environment. Poverty has declined over time, economic growth has
recovered since 2013, and inflation remains contained,” said Naoyuki
Shinohara, IMF deputy managing director.
IMF said Rwanda’s strong policies have played a
key role in maintaining real gross domestic product growth at 7.8 per
cent on average since 2000, with significant poverty reduction.
The economy is recovering from the disruptions
induced by aid suspension through mid-2013, with growth bouncing back in
the first half of 2014.
The central bank’s current monetary policy stance
is also appropriate in view of rising inflationary pressures and the
more flexible monetary policy framework will make monetary policy
implementation effective.
However, according to experts, more efforts are needed to promote financial deepening and inclusion.
“The government has taken important steps to
strengthen Rwanda’s debt management capacity and project implementation,
including establishment of a debt management unit. The available room
to fund new infrastructure projects and maintain a low risk of debt
distress is limited and sensitive to changing economic circumstances,”
added Mr Shinohara.
He said this requires consistent and prudent debt
management, through use of available concessional financing options,
private sector involvement and judicious use of non-concessional
borrowing.
Rwanda’s economic growth in 2014 is expected to
hit about 6 per cent, rising to the longer-term growth rate of 7.5 per
cent in the medium term.
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