RWANDA: IMF, World Bank write off Kigali's $1.4 billion debt

KIGALI, 14 Apr 2005 (IRIN) - The International Monetary Fund (IMF) and the World Bank announced on Wednesday the cancellations of a US $1.4-billion debt owed by Rwanda, under their Heavily Indebted Poor Countries (HIPC) initiative, designed to ease excessive debt burdens stifling growth in the developing world.

"This has been the best news for us this year," Donald Kaberuka, the minister of finance, told IRIN on Thursday in the Rwandan capital, Kigali.

He said the cancellation would enable the country to have sufficient funds to run its poverty reduction strategies.

Rwanda is the 18th country to qualify for debt relief under HIPC, which provides debt relief to developing countries that follow sound macroeconomic policies.

"Rwandan authorities are to be congratulated for having largely achieved macroeconomic stability," Agustín Carstens, IMF's deputy managing director and acting chairman, said.

A key priority for Rwanda in the short term would be to raise the economic growth rate, while maintaining macroeconomic stability and debt sustainability, in order to reduce poverty significantly and advance toward the UN's Millennium Development Goals. The goals set out to commit the international community to an expanded vision of development that promotes human development as the key to sustaining social and economic progress in all countries.

The IMF also announced it would disburse an $860,000 loan to Rwanda after completing a review of its recent economic performance.

Rwanda has now drawn about $4.3 million of its $6.0 million poverty reduction and growth facility, a first low-cost loan approved by the IMF in August 2002.

Rwanda's economic output has largely stabilised 11 years after the genocide, in which 937,000 people were killed; but poverty levels remain high. Up to 55 percent of Rwanda's 8.2 million people live on less than a dollar per day.

[ENDS]