For more information, see Rwanda and the IMF
restrained below the program target in the areas of nonsocial sector purchases of goods and services and domestically financed capital expenditure. As exceptional social expenditures and foreign-financed capital expenditures are also expected to be lower than under the program, the overall fiscal deficit in 2000 is projected at 9.3 percent of GDP, compared with 11.2 percent in the program. In addition, the government will ensure that the reduction in domestic arrears envisaged under the program is carried out and that there is no loosening of the monetary program on account of inter alia increases in the net credit to government from the banking system.
22. The government intends to limit the 2001 overall fiscal deficit (commitment basis and excluding grants) to 9.6 percent of GDP and to achieve a primary surplus of 0.2 percent of GDP, in order to allow for a significant increase in bank credit to the private sector, while initiating a gradual decline in the external current account deficit. A more ambitious fiscal stance is not envisaged in 2001 in order to accommodate an upfront large increase in antipoverty (social) spending and reflecting the expectation that revenue improvements on account of measures will occur gradually. This deficit target is consistent with possible external financing for 2001.
23. The government's budget for 2001 envisages an increase in revenue from the updated projections for 2000 of 10.2 percent of GDP to 10.8 percent in 2001. Revenue performance is expected to improve progressively on account of improvements in tax and customs administration, in particular the strengthening of the administrative capacity of the Rwanda Revenue Authority and political commitment behind measures to enforce tax laws, combat tax evasion, and address corruption. Such measures include inter alia strengthening income tax recovery, improving transit and warehouse control, broadening the tax base, reducing exemptions, increasing the presumptive tax on small- and medium-size enterprises' profits, and implementing fully the liberalized petroleum pricing mechanism. On January 1, 2001, the government will also introduce a value-added tax (VAT) with a rate of 15 percent, a turnover threshold of RF 15 million, and minimal exemptions, that would make the VAT at least revenue neutral. The authorities are committed to monitoring closely the outturn of the VAT receipts and make adjustments in the rate and/or threshold, if required to ensure adequate revenue performance. The specific measures that are envisaged to deliver the revenue projections for 2001, including the timetable for their implementation, are shown in Box 2.
24. In the area of expenditures, the goal of the government in 2001 will be to significantly increase those expenditures, which have been identified to have the greatest antipoverty impact while containing total government expenditure to 20.5 percent of GDP, compared with a revised projection of 19.6 percent of GDP for 2000. In the government's budget, the wage bill will be kept to 5.1 percent of GDP in 2001, marginally lower as a percent of GDP than in 2000. This would allow large increases in the social sector wage bill to be offset by decreases in other areas. More generally, with a view to reallocating expenditure toward antipoverty areas, the government will aim to reduce military spending to 3.2 percent of GDP in 2001 (from 3.8 percent in 2000), in line with its announced intention for gradual reductions in such spending over the medium term.
25. The government has sought to arrive at a more accurate definition for social/antipoverty spending to reflect only those expenditures by the ministries of education and health that are important for poverty reduction while, at the same time, adding to the definition other expenditures with a significant effect on the welfare and earning capability of the poor, such as in the areas of water and sanitation, rural development and infrastructure, human settlements, gender programs, and youth job creation. It has aimed to prioritize such expenditure in the context of the first MTEF for 2001-03, on the basis of some preliminary costings and taking into consideration the conclusions of the I-PRSP. It has also worked to identify the ways these expenditures and their impact will be monitored under the program. The redefined social/antipoverty spending is envisaged to increase to 4.9 percent of GDP in 2001 from about 4.1 percent in 2000, partly made possible by the expected interim assistance under the enhanced HIPC Initiative.2 Regarding exceptional social spending, the budget for 2001 envisions that it will remain stable at 1.5 percent of GDP, which should allow the government to press ahead with the demobilization plan given that other expenditure needs under that category are expected to decline over time. The government has also identified the spending programs in this category on which any additional financing beyond the programmed amounts may be spent.
26. Regarding capital expenditure, the government has reviewed the implementation capacity of the investment budget in recent years and on that basis determined a realistic target for such spending in 2001, which is also consistent with the macroeconomic goals under the program. The 2001 fiscal program would increase capital expenditure to 7.6 percent of GDP, compared with a projected 7 percent for 2000.
27. The government has identified contingency measures in the areas of fiscal revenue and nonsocial expenditure that would yield RF 3 billion, to be taken in the event of fiscal revenue shortfalls or expenditure overruns.
28. The government will begin implementation of a quarterly program to reduce the domestic arrears identified and verified under the recent audit in order to eliminate all verified arrears by end-2002, either through cash payments or securitization. Regarding arrears claims not currently recognized by the government, the latter will approach the Auditor General or a private sector auditor to carry out audits by end-June 2001 in order to identify any further obligations of the government to be cleared by end-2002. To avoid the reemergence of arrears and monitoring the existing arrears, as well as strengthening expenditure monitoring in general, the government will implement the steps outlined in Box 4. In this context, the government has also requested from the Fund a treasury advisor. Gains in expenditure monitoring and control are important not only for improving the conditions for fiscal discipline but also for effectively monitoring antipoverty expenditure under the HIPC Initiative and PRSP.
29. The monetary program for 2001 aims at achieving the inflation and reserve targets of the government while providing room for a strong increase in credit to the private sector so as to help achieve the real GDP growth objective and the desired increase in private investment. The NBR will stand ready to use fully its sterilization instruments, including by introducing sales of its own paper, to keep within the net domestic asset ceilings, and to meet the targets for net foreign assets by allowing the needed exchange rate flexibility. With a view to increasing monetary control (and encouraging the development of an interbank foreign exchange market), the NBR will redefine reserve money so as to exclude the use of foreign currency by banks to fulfill the reserve requirement and will aim to reduce the large holdings of excess reserves by banks. The government and the NBR will increase their coordination through weekly meetings so as to improve financial management and avoid departures from the monetary program on account of fiscal and foreign financing developments.
30. On the exchange regime, the NBR is firmly committed to the market determination of the exchange rate, with its intervention aimed only at meeting its net foreign asset target. The NBR has reassessed the operation of the market for foreign exchange in Rwanda, with a view toward removing distortions, ensuring a transparent market determination of the exchange rate, and encouraging the development of an interbank market for foreign exchange. To this effect the NBR will conduct weekly auctions to sell foreign exchange to the highest bidder among the commercial banks at whatever rate clears the auction. The NBR would still be able to buy foreign exchange outside the auction or reduce the amount it sells at the auction if it is needed to meet its net foreign asset target. The authorities, in designing the auction process, will request assistance by the Fund's MAE department. The intention of the NBR is to complete the steps toward adopting the new institutional arrangement for the foreign exchange market by January 31, 2001, after receiving technical assistance from the Fund's MAE department.
31. In the interim, the NBR will take steps to move toward market determination of the interbank exchange rate by ensuring that the margin between that rate and the parallel market rate is further reduced from its current level of 6 percent. It will do so by applying an exchange rate in its transactions with banks calculated as a weighted average of exchange rates used the previous day in commercial banks' transactions with their clients. The NBR will ensure equal treatment to all the banks when intervening in the interbank foreign exchange market (i.e., when selling or buying foreign exchange). It will publish on a weekly basis the list of sales made to banks indicating the demands and amounts sold. The Central Bank will ensure that all demands will be processed within 48 hours. With a view to encouraging and monitoring exchange rate flexibility, the NBR will report weekly on the difference between the parallel market rate and the weighted weekly average rates of NBR intervention in the interbank market for purchases and sales, respectively. This difference should not exceed 12 percent.
32. The government assigns particular importance to the restructuring of the banking sector and of the financial system more generally, as this is a necessary condition for increasing the private savings rate and investment over the medium term. The current low levels of both variables in part result from weaknesses that will be addressed by carrying out the financial sector reforms outlined in Box 3. Progress in strengthening the banking system is also essential for the intended gradual liberalization of the capital account.
33. The external current account deficit (excluding official transfers) is projected to decrease from 16.8 percent of GDP in 2000 to 14.7 percent in 2001, as the effects of the drought on food and export crops are reversed, the price of fuel imports decreases, and financial policies become more prudent. Over the medium term, the development of the balance of payments is predicated on continued fiscal adjustment, a strengthened banking system, and robust economic growth of about 6-6.5 percent. The government envisages a gradual improvement of the current account to about 10.7 percent of GDP in 2004, based on an acceleration of export growth in volume terms due to increases in output of traditional exports of coffee and tea,3 and the development and improvement of other exports such as horticultural products, artisanal products, hides and skins, and textiles. In addition, the services account is also expected to improve due to a gradual resumption of tourism, higher investment income, and a decline in interest on public debt. The capital account is also scheduled to improve owing to greater confidence in the banking system and in the economy as a whole, as well as the progressive capital account liberalization. Private capital is expected to flow into Rwanda over the medium term as residents bring money held abroad back into the domestic banking system and as the Rwandese diaspora increases both portfolio and direct investment flows. Foreign investors are also expected to make direct investments into new export-oriented sectors, as stability is entrenched in Rwanda and access to the markets of industrial countries improves for African-made products.
34. Regarding trade policy and regional integration, the application of the zero rate for imports from COMESA and the Regional Integration Facilitation Forum (RIFF, which replaced the Cross-Border Initiative) countries has been delayed. The government remains committed to regional integration and the free-trade area provisions of the COMESA treaty. To this extent, it has already signed the African Guarantee Fund agreement. However, concerning the application of the zero rate, the government is carrying out background studies on transportation costs and the impact on domestic industry and fiscal revenue. It subsequently intends to submit a formal request to the EU and other donors for access to the compensation fund and set a timetable of implementation. In addition, the government plans to convert the 4 percent warehouse tax (Magerwa) into a 1 percent statistical tax and will come up with an appropriate timetable for its implementation, taking into account the revenue implications.
35. The macroeconomic framework for Rwanda shows a financing gap for 2001 (after expected project grants and loans, and before exceptional financing) of about US$76.7 million, which can be met with current pledges. This amount is covered by already obtained debt relief and refinancing from Paris Club creditors, as well as from non-Paris Club creditors, and by possible budgetary support from the World Bank, EU, AfDB, and bilateral donors. Given that the existing Paris Club agreement ends in May 2001, Rwanda will need an extension of the Paris Club rescheduling agreement for the second half of that year.
B. Other Structural Policies
36. The government intends to undertake structural reforms (as indicated in Box 4) with the assistance of the World Bank in the areas of the civil service, privatization, governance, regulatory environment, and infrastructural services with a view to creating an enabling environment for sustainable private sector-led growth.
IV. Program Coordination and Monitoring
37. The government is committed to improving program monitoring and coordination, as well as improving transparency through strengthening collection, reconciliation, and reporting of data. Recognizing the need for closer policy coordination, the authorities will establish a working committee comprised of technical representatives from the NBR and the Ministry of Finance, who will meet on a weekly basis to discuss progress made in the implementation of policies under the economic program, as well as propose a coordinated response to problems. The group will report its findings to the Minister of Finance and the Governor of the NBR on a regular basis.
Performance criteria, benchmarks, and reviews
38. In light of the nonobservance of seven quantitative performance criteria and two structural performance criteria, the government has implemented a number of revenue measures designed to improve fiscal revenue performance in 2000 as well as in 2001. The NBR has reaffirmed its commitment to a floating exchange rate regime, and has agreed to
implement a system of foreign exchange auctions by January 31, 2001, subject to technical assistance by the MAE department of the Fund. All external arrears have been eliminated. Regarding the breached structural performance criterion on ministerial audits, four still outstanding audits will be completed by December 15, 2000—a prior action—and another by end-March 2001. An additional five prior actions—critical to the success of the 2001 program—are to be completed before presenting the government's request for a third annual PRGF agreement to the IMF Board (Table 1).
39. The program supported by the third annual agreement under the PRGF will be monitored on a continuous basis with quantitative and structural performance criteria, benchmarks, and indicative targets. The first review of the program will be based on quantitative performance criteria and benchmarks at end-March 2001 and structural performance criteria and benchmarks through end-June 2001, and will be completed by mid-July 2001. The second review will be carried out on the basis of quantitative performance criteria and benchmarks as of September 30, 2001 and structural performance criteria and benchmarks through end-September 2001, and will be completed by mid-December 2001. Quantitative performance criteria will include floors on net foreign assets of the NBR, the primary fiscal balance, and social spending, and ceilings on net domestic assets of the banking system, net credit to the central government by the banking system, external debt, and regarding the nonaccumulation of new external payment arrears except for external arrears that are subject to debt-rescheduling negotiations (to be monitored on a continuous basis). Given Rwanda's very unsustainable debt situation, a prudent debt strategy will be pursued. All external borrowing will be on concessional terms (enforced by a ceiling) defined as loans having a grant element of at least 50 percent. In addition, there will be an indicative ceiling on reserve money, a floor on budget revenue, and a ceiling on the government wage bill. A complete list of quantitative and structural performance criteria, as well as structural benchmarks, is included in Tables 2 and 3, respectively.
1The new budget classification used
in the 2001 budget has permitted an easier identification of those line
items and programs, which are priorities for poverty reduction.
Technical Memorandum of Understanding Between the Government of Rwanda and the International Monetary Fund
December 11, 2000
1. This memorandum outlines the understandings between the Rwandese authorities and the IMF mission with regard to the definitions of the quantitative and structural performance criteria, and quantitative benchmarks and indicators for the three-year poverty Reduction and Growth Facility (PRGF) arrangement. It also sets out the modalities and data reporting requirements for monitoring the program.1
2. Revisions since the last version of the Technical Memorandum of Understanding (TMU) include a specification of the adjustment to the reserve money target of the National Bank of Rwanda (NBR) if the NBR's required reserve ratio changes; a new definition of net credit to government; a new definition of domestic arrears; a new definition of social/antipoverty spending; and a definition of net domestic assets of the banking system.
I. Adjustments to Performance Criteria and Benchmarks (Table 1)
A. Financed Excess Social/Antipoverty Spending Adjustment (FESSA)
3. A priority of the program is to provide funds for social purposes. In that spirit, if excess external financing is available, the authorities will have the option either to save the excess in the banking system or to spend some or all of it on additional social spending, as long as the increase is agreed to between the authorities and the staffs of the Fund and the World Bank.2 Similarly, if social spending targets are not met, then the funds that were not spent should be saved in the banking system and not be used for other purposes. The adjustment that will incorporate these goals into the performance criteria and benchmarks shall be referred to as the Financed Excess Social Spending Adjustment (FESSA). The FESSA will be added to the targets for the primary fiscal balance.
4. Definition: The FESSA is equal to actual social spending minus programmed social spending, subject to the limitation that if it is positive (excess spending) it cannot be larger than the surplus in external budgetary support defined below.
B. External Budgetary Support and Social Spending Adjustment (EBSSSA)
5. Program targets are designed taking into account an expected level of external budgetary support. Differences between the program projections and the realizations for external budgetary support will affect the ease or difficulty with which program targets may be met. Programs are also designed so as to provide room for spending on social programs, so incentives should exist for surpluses in external budgetary support to be spent on social and/or exceptional social programs. Meanwhile, funds that are saved because of shortfalls in spending on these programs should be saved in the banking system and not be spent for other purposes.
6. The External Budgetary Support and Social Spending Adjustment (EBSSSA) accounts for differences between program projections and actual outcomes for external budgetary support and social and exceptional social spending. Rwanda is neither penalized nor rewarded for changes in external budgetary support that are beyond its control, and is encouraged to meet its targets for spending on social and exceptional social programs and to spend any surplus of budgetary support on them. The EBSSSA is a figure which, whether it is positive (in the case of a shortfall of budgetary support) or negative (in the case of a surplus of budgetary support, or a shortfall in social spending), is added to the targets for NCG and net domestic assets of the banking system, and subtracted from the target for net foreign assets of the banking system. The adjustment will be necessary whether the external budgetary support is channeled through the NBR or through the commercial banks.
7. Definition: The EBSSSA is equal to the shortfall in external budgetary support, defined below, plus the financed excess social plus exceptional social spending adjustment (FESESSA). However, it is subject to the limitation that if it is positive (a shortfall in budgetary support) it cannot be larger than RF 9 billion in September 1999, RF 12 billion in December 1999, RF 9 billion in March 2000, RF 11 billion in June 2000, RF 13 billion in September 2000, RF 15 billion in December 2000, RF 9 billion in March 2001, RF 11 billion in June 2001, RF 13 billion in September 2001, RF 15 billion in December 2001.3 There is no lower limit on the EBSSSA adjustment.
8. Other definition: The Financed Excess Social plus Exceptional Social Spending Adjustment (FESESSA) is equal to actual social plus exceptional social spending minus programmed social plus programmed exceptional social spending, subject to the limitation that if it is positive (excess spending) it cannot be larger than the excess in external budgetary support defined below. There is no lower limit on the FESESSA.
9. Other definition: The shortfall (positive—a surplus would be negative) in external budgetary support is calculated by taking the programmed budgetary support minus the sum of the actual budgetary support and the shortfall in the repayment of debt to the CSR (total debt due minus total debt paid).4 This difference is then converted to Rwanda francs at the program exchange rate.
II. Quantitative Performance Criteria and Benchmarks (Table 1)
A. Net Foreign Assets of the National Bank of Rwanda (NBR)
10. Definition: net foreign assets of the NBR in Rwanda francs are defined, consistent with the definition of the Special Data Dissemination Standards (SDDS) template, as external assets readily available to, or controlled by, the National Bank of Rwanda (NBR) net of external liabilities of the NBR. Pledged or otherwise encumbered reserves assets including, but not limited to, reserve assets used as collateral or guarantee for third party external liabilities, are to be excluded. Foreign assets and foreign liabilities in U.S. dollars are converted to Rwanda francs by using the U.S. dollar/Rwanda franc program exchange rate. Foreign assets and liabilities in other currencies are converted to U.S. dollars by using the actual end-of-period U.S. dollar/currency exchange rate. Foreign liabilities include, inter alia, use of IMF resources (CCFF and post-conflict emergency assistance purchases and SAF/ESAF/PRGF disbursements).
11. Adjustments: The EBSSSA will be subtracted from the floor on net foreign assets of the NBR.
12. Reporting requirement: Data on foreign assets and foreign liabilities of the NBR will be transmitted to the African Department of the IMF on a weekly basis within seven days of the end of each week; data on external budgetary support will be transmitted on a monthly basis within three weeks of the end of each month. Data on the NBR's foreign exchange liabilities to commercial banks (held as required reserves with the NBR) and the exchange rate used for their conversion into Rwanda francs will be shown separately.
B. Net Credit to Central Government (NCG)
13. Definition net credit to central government from the banking system is defined as the difference between:
14. NCG is not affected by credit to or deposits of public enterprises and autonomous public agencies.
15. Reclassifications: All six reclassifications described in Annex B—for the currency overdraft to the prewar government, for the foreign exchange losses incurred by the NBR as a result of the 1995 devaluation, for the reclassification of deposits with commercial banks of the central government, for the reclassification of deposits with commercial banks of the nongovernment public sector, for the reclassification of deposits with the NBR of the CSR and other autonomous public agencies, and for the reclassification of deposits with the NBR of the 15 newly identified autonomous public agencies—affect net credit to the government from the banking system.
16. Adjustments: The EBSSSA will be added to the ceiling on net credit to central government from the banking system.
17. Reporting requirement: Data on net credit to central government (showing separately treasury bills and government bonds outstanding, other government debt, and central government deposits) will be transmitted on a monthly basis within three weeks of the end of each month. Deposits of the central government with the NBR and with the commercial banks will be separated from the deposits of the public enterprises and autonomous public agencies.
C. Net Domestic Assets of the Banking System
18. Definition: net domestic assets of the banking system are defined as the sum of net credit to central government, credit to public enterprises and other autonomous public agencies, credit to the private sector (including other financial institutions), and other items net. To reflect the valuation of net foreign assets at the program exchange rate, other items net (and therefore total net domestic assets) is adjusted as follows: net foreign assets of the banking system converted from dollars into Rwanda francs at the actual exchange rate minus net foreign assets of the banking system converted from dollars into Rwanda francs at the program exchange rate is added to other items net evaluated in Rwanda francs. (This last step is necessary to maintain the identity that broad money be equal to net foreign assets of the banking system plus net domestic assets of the banking system.)
19. Reclassifications: net domestic assets of the NBR is affected by the reclassification of the currency overdraft to the prewar government, and the reclassification of deposits of the CSR and other autonomous public agencies (from credit to central government to reserve money).
20. Adjustment: The EBSSSA will be added to the ceiling on net domestic assets of the banking system.
21. Reporting requirement: the balance sheet of the NBR will be transmitted on a weekly basis within seven days of the end of each week; the balance sheets of the commercial banks, including the monetary survey, will be transmitted monthly within three weeks of the end of each month.
D. Ceiling on Contracting or Guaranteeing by the Central Government, Local Governments, and the NBR of New Nonconcessional External Debt with Original Maturity of More Than One Year
22. Definition: This performance criterion applies not only to debt as defined in point No. 9 of the guidelines on Performance Criteria with respect to Foreign Debt adopted on August 24, 2000 by the IMF Executive Board, but also to commitments contracted or guaranteed for which value has not been received. Concessional debt is defined as having a grant element of 50 percent or more. For loans with a maturity of at least 15 years, the 10-year average commercial interest reference rates (CIRRs) published by the OECD should be used as the discount rate for assessing the level of concessionality, while the 6-month average CIRRs should be used for loans with shorter maturities. To both the 10-year and the 6-month averages, the following margins for differing repayment periods should be added: 0.75 percent for repayment periods of less than 15 years; 1 percent for 15-19 years; 1.15 percent for 20-29 years; and 1.25 percent for 30 years or more.
23. Reporting requirement: Details of all new external debt, including government guarantees, will be provided after the approval by parliament and the constitutional court on a monthly basis within three weeks of the end of each month.
E. Ceiling on Change in Outstanding Stock of External Debt, Owed or Guaranteed by the Central Government, Local Governments, and the NBR with Original Maturity of Up To and Including One Year
24. Definition: The term "debt" has the meaning set forth in point No. 9 of the Guidelines on Performance Criteria with respect to Foreign Debt adopted on August 24, 2000. Excluded from this performance criterion are normal import-related credits.
25. Reporting requirement: Data on debt and guarantees by central government, local governments, and NBR will be transmitted, with detailed explanations, on a monthly basis within three weeks of the end of each month.
F. Primary Fiscal Balance
26. Definition: The primary fiscal balance is defined as domestic revenue (excluding grants and privatization proceeds) minus noninterest current expenditure (on a payment order basis (ordonnancement); including exceptional social expenditures) and minus domestically financed capital expenditure.
27. Adjustments: The primary fiscal balance target will be reduced by the amount of the FFESSA.
28. Definition: Central government spending on social services under the program is defined as outlays on social services (on a payment order basis, including transfers) by the Ministry of Education (including University of Rwanda, transfers to KIE (food), ISAE, IRST, and scholarships); the Ministry of Health; the Ministry of Youth and Sports; the Ministry of Gender; the Ministry of Agriculture, Livestock and Fisheries; the Ministry of Lands and Resettlement; the Ministry of Energy and Water Resources; the Ministry of Local Government; the Ministry of Internal Affairs; the Ministry of Commerce; the Ministry of Social Affairs; the Ministry of Transport and Communications; the Ministry of Public Service; the Ministry of Justice; and the Supreme Court. Social expenditure does not include any exceptional social expenditure.
29. Reporting requirement: Data on expenditure on social sectors according to Table 3 will be transmitted to the African Department of the Fund on a monthly basis within three weeks of the end of each month.
H. Net Repayment of Domestic Arrears
30. Definitions: The repayment of domestic arrears is defined as the repayment of the stock of arrears on goods and services outstanding at end-1999, arrears to public enterprises (including the Caisse sociale du Rwanda and the National Post Office) and arrears (counterpart funds) to World Bank projects. The accumulation of new domestic arrears is defined as the difference between cumulative (since January 1) payment orders and actual payments (debited to the government treasurer's account at the NBR) minus a "normal float" of RF 2.0 billion. The net repayment of domestic arrears is defined as the repayment of domestic arrears (as defined above) minus the accumulation of new domestic arrears (as defined above).
31. Reporting requirement: Detailed data on repayment of domestic arrears and the remaining previous-year stock of arrears will be transmitted on a monthly basis within three weeks of the end of each month.
I. Stock of Outstanding Nonreschedulable External Arrears
32. Definition: The stock of nonreschedulable external arrears is defined as the sum of arrears to multilateral creditors and, if any, nonreschedulable arrears, to bilateral official and commercial creditors.
33. Reporting requirement: Detailed information on repayment and/or refinancing (including the terms of refinancing) of arrears will be transmitted on a quarterly basis within three weeks of the end of each quarter.
III. Quantitative Indicators
A. Reserve Money
34. Definition: Reserve money is defined as currency in circulation, reserves of deposit money banks (including NBR borrowing from deposit money banks on the money market and cash in vault held by commercial banks), and deposits of public enterprises (including CSR and other autonomous public agencies), and nonbank financial institutions. (Autres sommes due aux clients, including cautions à l'importation, are excluded from reserve money.)
35. Reporting requirement: Data on reserve money will be transmitted on a weekly basis within seven days of the end of each week.
B. Adjustment for Changes in the Required Reserve Ratio of the NBR
36. If the required reserve ratio of the NBR changes, The NBR will be expected to absorb the excess liquidity that this change creates. Therefore the reserve money, and hence net domestic assets, target of the NBR will be adjusted by the absolute change in the ratio times the deposit base of the commercial banks.
C. Budget Revenue
37. Definition: Budget revenue is defined as the sum of domestic tax and nontax revenue (excluding privatization proceeds; including debt service payments by public enterprises on government (guaranteed) debt retroceded by the government to these enterprises).
38. Reporting requirement: Data on budgetary revenue will be transmitted on a monthly basis within three weeks of the end of each month.
D. Government Wage Bill
39. Definition: The government wage bill is defined as the total wage and salary payments (including all monetized fringe benefits) for civil servants and military, including food allowances for the military, employer social security contributions, and health insurance premiums. It includes the imputed rent for civil servants living in government houses; this rent is deducted from salary payments and is included under nontax revenue.
40. Reporting requirement: Data on the government wage bill will be transmitted on a monthly basis within three weeks of the end of each month.
IV. Structural Indicators (Table 2)
A. Size of Civil Service
41. Definition: The size of the core civil service is defined as the number of persons on the payroll of the central government, excluding teachers and the National Army of Rwanda, but including the national police. The number is monitored on the basis of the average size of the civil service during each quarter (based on end-of-month data).
42. Reporting requirement: The number of civil servants on the central government payroll, as well as the numbers for new recruitment and removal from the payroll during the period, will be transmitted on a monthly basis by ministry within three weeks of the end of each quarter.
B. The Number of Teachers
43. Definition: The number of teachers is defined as the number of teachers in primary and secondary schools on the payroll of the central government. The ceiling is monitored on the basis of the average number of teachers during each quarter (based on end-of-month data).
44. Reporting requirement: The number of teachers on the central government payroll, as well as the numbers for new recruitment and removal from the payroll during the period, will be transmitted on a monthly basis (by primary and secondary schools) within three weeks of the end of each quarter. In addition, the number of occasionnels (teachers and noncivil servants not on the payroll, but paid from other budget lines will be reported on a monthly basis by primary and secondary schools) within three weeks at the end of the quarter.
V. Other Data Requirements for Program Monitoring
A. Public Finance
45. Reporting requirement: Monthly data on external budgetary support with a breakdown of loans by creditor and grants by donor and domestic nonbank financing of the budget (including treasury bills and government bonds held by the nonbank public) will be transmitted on a monthly basis within three weeks of the end of each month; quarterly data on the implementation of the development budget with detailed information on the sources of financing will be transmitted on a quarterly basis within three weeks of the end of each quarter; public sector external and domestic scheduled debt service and payments will be transmitted on a monthly basis within three weeks of the end of each month. The Rwanda Revenue Authority will transmit any updated census results of small and medium enterprises (including the economic characteristics of these enterprises and their estimated annual sales).
B. Monetary Sector
46. Reporting requirement: the following data will be transmitted on a monthly basis within four weeks of the end of the month: the individual balance sheet and consolidated balance sheets of deposit money banks (situation monétaire des banques); the monetary survey (situation monétaire intégrée); disaggregated data on "other items net" of the NBR and deposit money banks; required reserves and excess reserves of individual commercial banks, showing separately foreign exchange held as required reserves with the NBR; nonperforming loans of individual commercial banks; required and actual provisioning of impaired assets for individual banks; capital adequacy ratio for individual commercial banks and a weighted average for all commercial banks.5
C. Public Enterprises
47. Definition: The financial statements and bank deposits of the key public enterprises (including Rwandatel, Electrogaz, Ocircafé, Ocirthé, and ONP) will be monitored under the program.
48. Reporting requirement: The financial accounts (including profit and loss accounts, balance sheets, and annual reports when published) of key public enterprises (including Rwandatel, Electrogaz, Ocircafé, Ocirthé, and ONP) will be transmitted to the African Department of the Fund within four weeks on a semi-annual basis or as the accounts become available. The statement of these enterprises' bank deposits (bank by bank) will be transmitted to the African Department of the Fund on a quarterly basis within four weeks of the end of each month.
D. External Sector
49. Reporting requirement: The following buying, selling, and average exchange rates will be transmitted on a weekly basis within seven days of the end of each week: (i) intervention exchange rates used in NBR's operations with the commercial banks; (ii) the exchange rates used in interbank transactions among the commercial banks; (iii) the average of (i) and (ii); (iv) the exchange rates for transaction in banknotes at the commercial banks; (v) the same for foreign exchange bureaus; and (vi) the parallel (black) market exchange rates. All these exchange rates will be calculated on the basis of daily buying and selling rates; the average exchange rates will be calculated on the basis of a simple average of the daily buying and selling rates. The NBR will report weekly on the difference between the parallel market rate (buying and selling) and the weighted weekly average rates of NBR intervention in the interbank market for purchases and sales, respectively.
50. The following data will be provided on a monthly basis within four weeks of the end of each month:
51. Export and import data, including volumes and prices, will be transmitted on a monthly basis within four weeks of the end of each month; other balance of payments data including the data on services, official and private transfers, capital account transactions, and the repatriation of export receipts will be transmitted on a quarterly basis within four weeks of the end of each quarter.
E. Real Sector
52. Reporting requirement: Monthly disaggregated consumer price indices for Kigali (NBR), urban areas (Ministry of Finance), and rural areas (Ministry of Finance) will be transmitted on a monthly basis within four weeks of the end of each month; any revisions to gross domestic product by sector estimates will be transmitted within three weeks of the date of revision.
VI. Electronic Data Reporting
53. Reporting requirement: The following data will, where feasible, be made available through electronic format and e-mailed to the African Department of the Fund: (i) monetary data (monthly balance sheet of the NBR, summary balance sheet of the commercial banks, individual balance sheets of the commercial banks, details of public sector deposits with commercial banks, details of commercial banks' loan provisioning and capital adequacy, monthly data on foreign exchange operations of commercial banks and the NBR, and net open foreign exchange positions); (ii) fiscal "flash" report (aggregate and by ministry); (iii) exchange rates; (iv) detailed export and import data; and (v) detailed CPI data. Files that are in LOTUS123 version 4 should be converted to LOTUS123 version 3 or to Excel.
VII. Program Monitoring Committee
54. Definition: The program monitoring committee is the Interministerial Committee composed of the Ministers of Finance and Economic Planning, Civil Service and Labor; Education; Health; Commerce, Industry, and Tourism; and Agriculture, Animal Husbandry and Forests; and the Governor of the National Bank of Rwanda. The Interministerial Committee is assisted by the Interministerial Technical Committee, composed of senior officials of the same ministries, and the National Bank of Rwanda. The Interministerial Technical Committee shall meet once a month and be responsible for monitoring the performance under the program, informing the IMF staff regularly about progress on program implementation, and transmitting supporting information necessary for program monitoring.
55. Reporting requirement: the names of the Interministerial
Technical Committee shall be communicated to the IMF no later than the
date of submission of the authorities request for the three-year ESAF
arrangement to the Executive Board of the IMF or the start of a new
annual arrangement. The Interministerial Technical Committee shall provide
to the IMF staff a progress report on the program implementation on
a monthly basis within two weeks of the end of each month.
ANNEX B. Reclassifications
The following reclassifications of data have been made to the monetary survey (see Table 1):
1. Currency overdraft to the prewar government: In tables presented by the IMF before August 1, 1999, a currency overdraft to the prewar government of RF 2 billion of currency was subtracted from the NBR figures for reserve money, net credit to the government from the banking system, and net domestic assets. As of August 1, 1999 this adjustment will no longer be made by the IMF to any data, past or present, and figures for reserve money, net credit to the government from the banking system, and net domestic assets will be RF 2 billion higher than comparable figures from before August 1, 1999.
2. Foreign exchange losses incurred by the NBR as a result of the 1995 devaluation: In tables presented by the IMF before August 1, 1999, foreign exchange losses of approximately RF 9 billion that were incurred by the NBR because of a devaluation that resulted from a change in exchange regime ordered by the government in 1995 were subtracted from net credit to government, under the assumption that the government would not reimburse the NBR for these losses. As of August 1, 1999 this adjustment will no longer be made by the IMF to any data, past or present, and figures for net credit to the government from the banking system will be RF 9 billion higher than comparable figures from before August 1, 1999. A corresponding adjustment will be made to other items net to maintain consistency of the monetary survey.
3. Reclassification of deposits of the central government with commercial banks: In tables presented by the IMF prior to May 1, 1999 deposits of the central government were underestimated by subtracting out a residual that was required to reconcile individual commercial banks' data on deposits of the public sector with the corresponding data from the NBR.6 As of May 1, 1999, more reliable figures have been identified, this residual has been eliminated, and figures for net credit to the government from the banking system will be lower than comparable figures from before May 1, 1999 by the past values of this residual, with a counterpart adjustment in broad money.
4. Reclassification of deposits of the nongovernment public sector with commercial banks: In tables presented by the IMF prior to January 1, 1999 deposits of the government included deposits of the nongovernment public sector with commercial banks.7 As of January 1, 1999, the definition of government has been narrowed to "central government". Non-central-government public sector deposits will be categorized as private sector deposits, and figures for net credit to the government from the banking system will be higher than comparable figures from before January 1, 1999 by the amounts of these deposits. A corresponding adjustment will be made to broad money to maintain consistency of the monetary survey.
5. Reclassification of deposits with the NBR of the CSR and other autonomous public agencies: In tables presented by the IMF prior to January 1, 1999 deposits of the central government with the NBR included deposits of the CSR and other autonomous public agencies. As of January 1, 1999, these deposits will be categorized in other nonbank deposits, and figures for net credit to the government from the banking system will be higher than comparable figures from before January 1, 1999 by the amounts of these deposits. A corresponding adjustment will be made to reserve money to maintain consistency of the monetary survey.
6. Reclassification of the deposits of 15 additional autonomous public agencies: In tables presented by the IMF prior to November 5, 2000, deposits of the central government with the NBR included deposits of 15 autonomous agencies not identified in the original reclassification of January 1, 1999. As of November 6, 2000 these deposits will be itemized separately in a category called "public nongovernment deposits," but will still be included in the domestic credit of the NBR.
1A summary of reporting requirements is provided in Table 4.