{{The Government of Rwanda and the International Monetary Fund (IMF) co-hosted a conference on March 31, 2014 in Kigali to discuss the new Policy Support Instrument (PSI) that was approved in December 2013.}}
PSI is a non-financial program for policy dialogue and technical assistance whose objectives includes among others maintaining macroeconomic stability, rapid inclusive growth while gradually reducing Rwanda’s aid dependency.
These objectives are set around four pillars which include private sector development, export promotion, domestic resource mobilization and financial sector development.
Under the previous PSI, Rwanda’s economic growth has been impressive which is largely attributed to sustainably pursuing prudent macro-economic policies, while creating conducive business environment.
The new PSI is a three year program which has been aligned to the Economic Development and Poverty Reduction Strategy (EDPRS 2). Implementation of the reforms agreed within the context of the new PSI is expected to underpin the transition toward private sector-led growth.
These reforms include the government’s objectives of enhancing revenue mobilization by broadening tax bases, removing exemptions, and improving tax administration.
Other reforms include strengthening public financial management, improving the effectiveness of monetary policy, increasing financial access, diversifying exports, and prioritizing the public investment program, while pursuing a prudent debt management strategy.
“Government has taken a more balanced approach to not only attract foreign direct investments but also increase domestic revenues,” said Kampeta Sayinzoga, the Permanent Secretary at the Ministry of Finance and Economic Planning.
“Rwanda has undertaken far-reaching economic and structural reforms over the years. “Under the new PSI, Government priorities aimed at maintaining macroeconomic stability and sustaining the inclusive growth have been addressed,” said Paulo Drummond, the IMF mission chief for Rwanda
The event brought together participants from government, the private sector, civil society, and the development community with the goal of broadening the dialogue on the vision of Rwanda’s future.
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