Via IMF (Den Internationale Valutafond)

IMF Staff Issues an Interim Performance Update to the Board on Rwanda’s Policy Coordination Instrument (PCI)







September 30, 2020











  • All end-December 2019 quantitative targets for the second review under the PCI were met and performance on the reform targets was broadly on track.
  • The heavy toll of the COVID-19 pandemic has pushed the fiscal targets for end-June 2020 out of reach and hampered progress in advancing the reform targets agenda.
  • Going forward, the authorities need to implement measures to ensure a growth-friendly fiscal consolidation to safeguard debt sustainability as soon as the crisis abates.

Washington, DC:
The COVID-19 pandemic has had a severe economic impact on Rwanda through
the implementation of strict domestic measures to contain the spread of the
virus and the related global spillovers. The authorities have responded by
rolling out health and economic measures totaling USD 311 million (3.3
percent of GDP) to mitigate the economic fallout on businesses and
households. To help address the urgent balance of payments need arising
from the pandemic, the Executive Board approved on April 2 and June 11,
2020 the authorities’ consecutive requests for emergency financing under
the Rapid Credit Facility (RCF) totaling SDR 160.2 million, equivalent to
100 percent of quota (IMF Country Reports


No. 20/155


and


No. 20/207

).

All end-December 2019 quantitative targets for the second review were met
and performance on the reform targets was broadly on track. The
end-December 2019 reform target aiming at automating the risk-based
verification process for tax refund claims was delayed as the technical
support required to implement the project could not be secured ahead of the
target date. The deterioration in the fiscal position from revenue losses
and increased spending to address the impact of the pandemic have made the
fiscal quantitative targets for end-June 2020 unattainable. Progress in
advancing reform targets was also partly hampered by disruptions from
COVID-19 and the need to divert resources and efforts to mitigate the
fallout from the pandemic. The assessment of program performance at
end-June 2020 will be confirmed at the upcoming third PCI review. Going
forward, the authorities need to implement measures to ensure a
growth-friendly fiscal consolidation to safeguard debt sustainability as
soon as the crisis abates. They should also continue to ensure transparency
of COVID-19-related financing and spending.




[1]


Staff has sent to the Executive Board a performance update
concerning the second review under Rwanda’s PCI-supported
program. A performance update is issued to the Board when a
review cannot be completed within three months from the
scheduled date. It provides an overview of the economic
situation and program performance, indicating the sources of
delay in completing the scheduled review,
and highlighting the corrective actions needed in order to
bring the program back on track.









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