IMF $109.4 million grant for replenishing international reserves, fund health and feed vulnerable families

On 4 April 2020 at 04:11

The Minister of Finance and Economic Planning Dr. Ndagijimana Uzziel has said that the recently announced IMF $109.4 million grant will allow Rwanda to address declining international reserves and refill the financial gap brought about by increased spending during the pandemic.

The Minister in an interview with the media said that there is a big financial gap to fill due to unforeseen expenditures especially in the health sector where there is need for the purchase of adequate equipment needed to test and treat coronavirus patients. “We also intend to keep offering the much-needed assistance to vulnerable households in Rwanda which were highly affected by the crisis."

Ndagijimana said that Rwanda’s economy will grow by 5.1% instead of the formerly projected 8.1%.

"Tax revenues will considerably reduce given that most businesses are on hold during the lockdown as well as the import and export of goods. On another note, unforeseen expenditures will cause a drop in our Gross Domestic Product (GDP). We recorded an increase in GDP by 9.4% in 2019 but with the support of the IMF, we have revised our figures and we expect GDP growth at only by 5.1%."

The government of Rwanda recently announced the International Monetary Fund (IMF) Executive Board has approved a $109.4 million (Rwf 104 billion) grant to address the challenges posed by COVID-19 pandemic.

The aid will be drawn under the Rapid Credit Facility (RCF). It is a zero-interest, long term loan which will be paid back over a period of 10 years starting from the five and a half years to come.

Currently, the government of Rwanda is negotiating for aid with the African Development Bank (AfDB) to bridge the financial gap brought about by coronavirus.

Ndagijimana stated that funds from IMF will not impact economic progress since it is a long-term loan which will be paid back five and a half years from now. He said that a thorough analysis was done to assess repayment capabilities before requesting for the loan.

Currently, 89 people have tested positive for coronavirus in Rwanda while the number of patients has reached over a million globally.