IMF approves US $5 million credit

The executive board of the IMF has approved a US $5-million "arrangement" under its Poverty Reduction and Growth Facility (PRGF) for Rwanda, the IMF reported in a press release on Monday.

"The board determined that Rwanda's Poverty Reduction Strategy Paper provides a sound basis for Fund concessional financial assistance," the IMF reported.

Under the arrangement, Rwanda would be able to draw some $760,000 immediately, the IMF added. The board also approved an additional interim aid of about $1 million for Rwanda, under the IMF's Enhanced Heavily Indebted Poor Country Initiative.

The PRGF is the IMFs concessional facility for low-income countries. Its ultimate aim is that PRGF-supported programmes aimed at economic growth and poverty reduction would be based on homegrown poverty reduction strategies adopted by involving civil society and development partners. Loans obtained under the PRGF carry an interest of 0.45 percent and are repayable over 10 years, with a five and a half-year grace period.

The announcement comes as greater momentum has gathered recently in the search for peace in Africa's Great Lakes region - between Rwanda and DRC on the one hand, and among Burundi's warring factions on the other.

The press release quoted IMF Board Acting Chairman Eduardo Aninat as saying after the board's discussions on Rwanda that members were encouraging Rwandan authorities and all parties in the Great Lakes to buttress progress toward peace and durable stability.

"Achieving sustainable growth and reducing poverty in the period ahead will depend crucially on rapid progress in resolving the security situation in a just and durable manner, thus laying the foundation for resources to be channelled toward building productive capacity," he said.

[For details see: http://www.imf.org/external/news.htm]