## _cr05173 — Executive Summary (Rwanda Enhanced HIPC Completion Point assessment)

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### Overview and status of HIPC process
- Decision point: December 2000 — debt relief required to lower the NPV of debt-to-exports ratio to the 150 percent threshold estimated at US$452.4 million in NPV terms, representing a 71.3 percent reduction after traditional debt relief mechanisms.
- Interim HIPC assistance delivered through end-2004:
  - IMF: US$20 million (nominal terms)
  - IDA: US$56.5 million (nominal terms)
  - Additional interim relief from AfDB, BADEA, the OPEC Fund, the European Union, and Paris Club creditors.

### Completion point triggers, status, and waiver recommendation
- Decision point completion point triggers:
  1. Full PRSP completed and satisfactorily implemented for at least one year, with HIPC savings directed to poverty-reducing programs.
  2. Maintenance of macroeconomic stability.
  3. Progress in reform of the tea sector (privatization of at least two of nine state-owned tea factories/estates).
  4. Implementation of key social measures in education, health, HIV/AIDS and adoption/implementation of a gender action plan.
- Status:
  - All triggers met except the tea-sector privatization trigger (acceptable bids not received for one factory, Mulindi).
  - PRSP finalized June 2002; priorities: (i) rural development and agricultural transformation; (ii) human development; (iii) economic infrastructure; (iv) good governance; (v) private sector development; (vi) institutional capacity building.
  - PRSP implementation broadly satisfactory; notable improvements in education and health and strengthened institutional frameworks.
- Staff recommendation:
  - Waiver of the tea-sector completion point trigger.
  - Approval of Rwanda’s completion point under the Enhanced HIPC Initiative.

### Updated Debt Sustainability Analysis (DSA) — end-2003 status and projections
- Updated DSA (end-2003) shows substantial deterioration relative to decision point:
  - NPV of debt-to-exports ratio at end-2003 after full delivery of HIPC assistance: 326 percent (decision point projection: 193 percent).
  - Revised peak: 343 percent in 2004.
  - Long-term projection (baseline): decline to 171 percent by 2023.
  - Under decision point projections the ratio was expected to fall below 150 percent in 2008 and remain below thereafter.
- DSA financing assumptions:
  - Grant financing assumed at 83 percent of total financing; remainder on standard IDA loan terms.
- Key debt aggregates (end-2003):
  - Nominal external debt: US$1.6 billion (end-2003).
  - Of which 88.3 percent owed to multilateral creditors; IDA accounted for 58.1 percent of total outstanding debt.
  - NPV of external debt at end-2003 after full delivery of decision point HIPC assistance: US$467.1 million, equivalent to 326 percent of exports.
  - Including bilateral debt relief beyond HIPC: NPV US$457.7 million, equivalent to 320 percent of exports.

### Factors driving deterioration and quantitative attribution
- Principal exogenous factors identified:
  - Lower export prices.
  - Changes in cross-currency exchange rates (notably euro and SDR appreciation vs. U.S. dollar).
  - Lower-than-expected concessionality of new borrowing (use of incorrect discount rate for SDR-denominated borrowing at decision point).
  - Lower discount rates (treated as exogenous).
- Quantitative attribution:
  - These exogenous factors account for more than 50 percent of both the unanticipated increase and the total increase in the NPV of debt-to-exports ratio.
- Additional adverse factor:
  - Unanticipated increase in import prices (especially energy): decision point expected import prices to rise 12 percent between 1999 and 2006; completion point projects a 29 percent rise over same period, with a steep rise in 2004.
- Decomposition highlights (selected exact figures preserved where shown):
  - End-1999 NPV of debt-to-exports ratio: 150.0
  - Decision point anticipated end-2003 ratio: 193.2
  - Actual end-2003 ratio after full delivery of Enhanced HIPC relief: 326.5
  - New borrowing at decision point projected to increase ratio by 91.8 percentage points; actual disbursement volumes stayed well below projections, reducing impact by 10 percentage points.
  - Exchange rate movements led to deterioration of 22 percentage points in the ratio.
  - Fall in merchandise export prices led to a 67 percentage point increase in the ratio (three-quarters unanticipated); coffee unit price trough in 2002 was US$0.74.

### Case for topping-up and recommended amount
- Staff assessment:
  - Exogenous factors justify exceptional topping-up at the completion point under the Enhanced HIPC framework.
- Specific recommendation:
  - Grant additional HIPC Initiative relief to bring Rwanda’s NPV of debt-to-exports ratio from 320 percent at end-2003 (after additional voluntary bilateral relief) down to the HIPC Initiative threshold of 150 percent.
  - Required topping-up of HIPC Initiative assistance in NPV terms at the completion point: US$243.1 million.
- IMF delivery caveat:
  - IMF additional assistance to be disbursed when other creditors provide satisfactory assurances of participation; IMF staff to return to the IMF Board with a proposed decision once assurances received.

### Post–topping-up projections and fiscal space
- Under baseline new lending assumptions (grant share 83 percent):
  - NPV of debt-to-exports ratio projected to rise from 150 percent in 2003 to 200 percent in 2007, then fall to 150 percent in 2014 and remain around this level for the following 10 years.
  - Debt service-to-exports ratio estimated to fall to 4 percent by 2011 and stay between 4 and 5 percent thereafter.
- With topping-up:
  - External debt situation improves considerably over projection period, freeing up resources for additional PRSP-related spending.

### Scenario analysis and sensitivity (2003–23)
- Scenarios analyzed:
  - Scenario 1 — Terms of trade shock (merchandise export prices drop 25 percent in 2005; import prices increase 10 percent in 2005; export volume growth reduced by 2 percentage points during 2005–07):
    - Total exports fall on average by 15 percent per annum relative to baseline.
    - NPV of debt-to-exports ratio would peak at 383 percent in 2007, then decline to 218 percent in 2023.
    - Debt service-to-exports ratio would worsen by about 1-2 percentage points vs baseline.
  - Scenario 2 — Reduction of external grants (grant share reduced to 55 percent from 83 percent):
    - NPV of debt-to-exports ratio would peak at 391 percent in 2010 and remain within about 350-400 percent through 2023.
    - Debt service-to-exports ratio would rise to 16 percent during 2021–23.
  - Scenario 3 — Higher GDP growth (real GDP +1.5 percentage points on average over 2005–23, with stronger export performance and revenue gains):
    - NPV of debt-to-exports ratio would fall below 150 percent in 2022 and reach 134 percent in 2023.
    - Debt service-to-exports ratio would slightly fall relative to baseline.
    - Implementation challenges: requires domestic revenue growth faster than real GDP, strengthened revenue administration, and strong export earnings growth.
- Scenario interpretation:
  - Scenarios 1 and 2 underscore downside risks; Scenario 3 shows improvement is possible but contingent on strong policy implementation and sustained external support.
  - All scenarios underline that strengthening export performance and maintaining high grant financing are critical for external debt sustainability.

### Key macro, fiscal, social, and priority spending highlights (selected exact figures)
- Priority spending (total percent of GDP by year):
  - 1998: 2.8
  - 1999: 3.9
  - 2000: 4.0
  - 2001: 5.3
  - 2002: 6.2
  - 2003: 6.9
  - 2004: 8.5
- Education (percent of GDP), 1998–2004:
  - 1998: 2.2; 1999: 3.2; 2000: 3.2; 2001: 3.5; 2002: 3.9; 2003: 4.2; 2004: 4.0
- Health (percent of GDP), 1998–2004:
  - 1998: 0.4; 1999: 0.5; 2000: 0.6; 2001: 0.7; 2002: 0.8; 2003: 0.6; 2004: 1.0
- Total expenditure (billions of RF), 1998–2004:
  - 1998: 117.4; 1999: 126.5; 2000: 131.7; 2001: 158.1; 2002: 174.6; 2003: 216.0; 2004: 275.4
- Nominal GDP (billions of RF), 1998–2004:
  - 1998: 621.3; 1999: 644.9; 2000: 705.7; 2001: 754.3; 2002: 825.0; 2003: 905.3; 2004: 1054.3
- Real GDP growth (percent change), 1999–2004:
  - 1999: 7.6; 2000: 6.0; 2001: 6.7; 2002: 9.4; 2003: 0.9; 2004: 4.0
- Consumer prices (end of period), 1999–2004:
  - 1999: 2.1; 2000: 5.8; 2001: -0.2; 2002: 6.2; 2003: 7.7; 2004: 10.2
- Central government total revenue (percent of GDP), 1999–2004:
  - 1999: 9.9; 2000: 9.7; 2001: 11.4; 2002: 12.2; 2003: 13.5; 2004: 13.9
- Domestic fiscal balance (excluding demobilization spending) (percent of GDP), 1999–2004:
  - 1999: -3.5; 2000: -2.3; 2001: -2.2; 2002: -3.8; 2003: -4.7; 2004: -5.3

### Social and sectoral implementation achievements (selected)
- Education:
  - Net primary enrollment target 1999→2001: 69 percent to 73 percent — target met; net enrollment currently at 95 percent.
  - Teacher training centers target (at least 6) — met: 11 centers operational in 2001/02.
- Health:
  - Target: staffing/equipping at least 50 percent of district health centers — met: estimates as of February 2003 suggest 70 percent equipped and staffed.
  - Immunization (DPT3) coverage rates: over 96 percent; immunization rates reported at 96 percent (WHO/UNICEF data).
  - Share of births attended by qualified health personnel increased by 3 percentage points; availability of essential drugs maintained close to 90 percent.
- HIV/AIDS and gender:
  - 2002–06 HIV/AIDS Strategic Plan prepared and adopted; decentralization and expansion of ARV access under way.
  - Gender Action Plan (2001–05) adopted; Comprehensive Gender Action Plan to eliminate legal gender disparities adopted in 2003; Law No 47/2001 adopted in October 2001.

### Public debt management, data, and institutional recommendations
- Institutional responsibilities:
  - Public Debt Division (DPP) at MINECOFIN maintains debt database; NBR’s “Département de l’inspection du change et balance de paiements” executes payments.
  - Coordination via "Sous-comité de gestion de la dette" lacks legal mandate and holds irregular meetings — recommendation to empower with explicit legal mandate and defined functions.
- Data systems and reconciliation:
  - MINECOFIN uses DMFAS 5.2; NBR uses an excel-based database; lack of interface and weak archiving leads to irregular reconciliation and potential inconsistencies.
  - Recommendations: improve access to debt documentation, install networked debt recording software and interface, strengthen archiving and formalize reconciliation procedures, elaborate a disclosure policy.
- Analytical capacity:
  - DDP staffing declined from 8 in 1998 to 3 in 2004; recommendation for capacity building, training, and staff retention.

### Program implementation, creditor participation, and delivery modalities (selected)
- Creditor participation:
  - Creditors accounting for 95 percent of total HIPC Initiative debt relief at decision point provided satisfactory financing assurances.
  - Multilateral debt relief amounts to US$396.5 million in NPV terms (87.6 percent of total HIPC debt relief).
  - IDA agreed debt relief US$227.5 million in NPV terms; interim assistance US$56.5 million delivered through end-2004; total nominal debt-service savings from IDA US$404.7 million.
  - IMF Enhanced HIPC assistance: SDR 33.8 million in NPV terms (equivalent to US$43.8 million); interim assistance disbursed SDR 14.45 million as of end-2004; remaining IMF assistance SDR 19.36 million to be disbursed at completion point.
  - AfDB Group debt relief US$75.0 million in NPV terms; interim assistance US$20.1 million delivered through end-2004; total nominal debt-service savings US$144 million.
  - Paris Club bilateral agreed in principle: US$34.8 million in NPV terms; interim flow treatment under Cologne terms.
- Reconciliation:
  - Debt data reconciliation at end-1999 confirmed decision point assistance; small revision reduced required debt reduction from US$452.4 million to US$451.2 million NPV — judged immaterial and common reduction factor retained.

### Program recommendation and questions for Directors
- Staffs recommend:
  - Executive Directors determine Rwanda has reached the completion point under the Enhanced HIPC Initiative framework.
  - Grant additional assistance in amount US$243.1 million in NPV terms at the completion point, contingent on satisfactory assurances from other creditors.
- Issues for Directors drafted for discussion include:
  - Agreement that Rwanda has met completion point conditions.
  - Satisfaction with PRSP and expenditure-tracking for ensuring HIPC and other resources promote poverty reduction.
  - Whether deterioration in debt sustainability is primarily attributable to exogenous factors and whether exceptional additional HIPC assistance should be granted conditional on creditor assurances.

*Source: Excerpt from IMF staff report and DSA material contained in _cr05173 (Rwanda Enhanced HIPC Completion Point assessment).*

### Executive Summary ......................................................................................................

### _cr05173 - Executive Summary

### Overview and status of HIPC process
- In December 2000, the Executive Boards of the IMF and IDA agreed that Rwanda had met the requirements to reach the decision point under the enhanced HIPC Initiative.
- At the decision point, the debt relief required to lower the NPV of debt-to-exports ratio to the 150 percent threshold was estimated to be US$452.4 million in net present value (NPV) terms, representing a 71.3 percent reduction of Rwanda’s debt in NPV terms after full use of traditional debt relief mechanisms.
- Interim HIPC assistance delivered through end-2004:
  - IMF: US$20 million (nominal terms)
  - IDA: US$56.5 million (nominal terms)
  - Additional interim relief has been received from AfDB, BADEA, the OPEC Fund, the European Union, and Paris Club creditors.

### Progress toward the completion point
- The decision point set four completion point triggers:
  1. Completion of a full PRSP and satisfactory implementation for at least one year, with HIPC savings directed to poverty-reducing programs.
  2. Maintenance of macroeconomic stability.
  3. Progress in reform of the tea sector (privatization of at least two of nine state-owned tea factories/estates).
  4. Implementation of key social measures in education, health, HIV/AIDS and adoption/implementation of a gender action plan.
- Status summary:
  - All triggers have been met except the tea-sector privatization trigger, which was not fully met because acceptable bids were not received for the sale of one tea factory.
  - The PRSP was finalized in June 2002. PRSP priorities: (i) rural development and agricultural transformation; (ii) human development; (iii) economic infrastructure; (iv) good governance; (v) private sector development; and (vi) institutional capacity building.
  - PRSP implementation has been broadly satisfactory, with notable improvements in education and health, strengthened institutional and legal frameworks (including the financial sector), and improved donor coordination and information dissemination.
  - Priority spending evolution:
    - 1998: 2.8 percent of GDP
    - 2000: 4.0 percent of GDP (more than 80 percent to education)
    - 2001: 5.3 percent of GDP

### Staff recommendations on completion point triggers
- Given strong performance in most policy areas—particularly education and health where completion triggers have been surpassed—and completion of the fourth review under the PRGF arrangement, staff recommend:
  - A waiver of the tea-sector completion point trigger (i.e., approval of the completion point despite the incomplete privatization of one tea factory).
  - Approval of Rwanda’s completion point under the Enhanced HIPC Initiative.

### Updated Debt Sustainability Analysis (DSA) and projected debt indicators
- An updated DSA based on end-2003 data shows a substantial worsening of debt indicators relative to decision point projections:
  - NPV of debt-to-exports ratio at end-2003 after full delivery of HIPC assistance: 326 percent (compared with 193 percent projected at the decision point).
  - Projected peak of revised ratio: 343 percent in 2004.
  - Long-term projection: decline to 171 percent by 2023.
  - At the decision point, the ratio was expected to fall below the 150 percent HIPC threshold in 2008 and remain below that threshold throughout the forecast period.
- The DSA assumptions included an ambitious degree of grant financing: 83 percent of total financing as grants, with the remainder provided by loans on standard IDA terms.

### Factors driving deterioration in debt indicators and case for topping-up
- Staff view: the substantial deterioration in Rwanda’s NPV of debt-to-exports ratio relative to decision point projections is primarily attributable to fundamental, exogenous changes in Rwanda’s economic circumstances:
  - Lower export prices.
  - Changes in cross-currency exchange rates.
  - Lower-than-expected concessionality of new borrowing.
  - Lower discount rates, established by additional analysis as an exogenous factor contributing to the deterioration.
- Quantitative attribution:
  - These factors account for more than 50 percent of both the unanticipated increase and the total increase in the NPV of debt-to-exports ratio.
- Additional adverse factor:
  - An unanticipated increase in import prices relative to decision point projections, expected to have a lasting negative impact on Rwanda’s terms of trade and its capacity to repay debt.
- Staff conclusion:
  - The combination of the exogenous factors above provides sufficient justification for a topping-up of HIPC assistance at the completion point.

### Conclusions and next steps
- Staff assess that Rwanda has made satisfactory progress toward the floating completion point and recommend:
  - Approval of the completion point, with a waiver of the tea-sector trigger.
  - Approval of a topping-up of Enhanced HIPC assistance given the demonstration that exogenous shocks explain a major share of the deterioration in debt indicators.

_Executive Summary, _cr05173 - Executive Summary_ (Rwanda Enhanced HIPC Completion Point assessment, source PDF)._

### 2004. Mulindi tea factory reached the point of sale in November

### 2004. Mulindi tea factory reached the point of sale in November

### Tea sector privatization and reforms
- Mulindi and Pfunda tea factories were "brought to the point of sale" but full privatization was only partially concluded; a sales agreement was reached for Pfunda but not for Mulindi.
- For Mulindi, the investor sought terms below the list price, which the government found unacceptable; Mulindi is to be put on the market again in 2005, along with 4 other factories.
- The government is reviewing the privatization process and framework to inform the next round of tea factory privatizations.
- A law redefining the role of OCIR-Thé was passed in 2003; OCIR-Thé now:
  - provides extension activities to improve smallholder capacity and access to inputs;
  - no longer sets prices (prices determined by negotiated agreements with farmers’ associations and factory representatives);
  - beginning in 2004, includes a price premium for tea quality;
  - will gradually focus on policy and strategy development, collection and dissemination of market information, enforcing standards, and providing incentives for improved tea quality and exports.
- A firm to act as transaction advisor for the second phase of privatization is being chosen; technical proposals have been received and are being assessed. Once chosen, bidding for the second phase will be launched and bidding is expected to start in the second half of 2005.

### Education sector achievements and implementation status
- Target and outcomes:
  - target: increase net primary school enrollment from 69 percent in 1999 to 73 percent in 2001.
  - Met. Net primary school enrollment of 73 percent was achieved in 2001.
  - Net enrollment is currently at 95 percent.
- Teacher training centers:
  - target: make operational at least 6 primary teacher training centers offering full-time and in-service training programs.
  - Met. In 2001/02, 11 Teacher Training Centers offering full time and in-service training became operational.
  - Note: programs will need to be upgraded following the Teacher Deployment and Management reform expected in 2005–06.
- Community participation and capacity-building:
  - target: establishment of the framework for community participation in support of primary and secondary education.
  - Met. In 2001, MINEDUC decentralized the system of education; the framework for community participation is established and operational.
  - target: design and implementation of a capacity-building program for the management of education at the central and decentralized levels.
  - Met. A framework has been designed and implementation initiated; it will be revised to reflect the results of ongoing civil service reform.

### Health sector achievements and implementation status
- Staffing and equipping district health centers:
  - target: full staffing and equipping of at least 50 percent of the district health centers.
  - Met. Estimates suggest that, as of February 2003, as much as 70 percent of health centers have been equipped and fully staffed.
- Malaria, infant and maternal mortality plans:
  - Met. The Roll Back Malaria Strategic Plan for 2004–10 has been developed in collaboration with donors; implementation is ongoing with progress in subsidized treatment, distribution of impregnated bed nets, preventive treatment integration, and addressing drug resistance.
  - To reduce infant and child mortality the government will:
    - continue strengthening the Expanded Program of Immunization which has DPT3 coverage rates of over 96 percent;
    - enhance the Integrated Management of Childhood Illnesses to strengthen quality of care for children under five.
- Reproductive health:
  - The government is implementing its national Reproductive Health Policy focusing on good motherhood and infant health, family planning, STI management, adolescent health, prevention and care of sexual violence and empowerment of women.
- Coordination framework:
  - target: adoption and implementation of a framework for the coordination of public, private, and NGO health providers.
  - Met. A framework is in place detailing cooperation between MOH and the private sector; MOH plans to strengthen regulatory and supervisory capacities and continue relying on contracts stipulating roles and responsibilities.
- Additional health outcomes:
  - immunization rates now at 96 percent according to official WHO/UNICEF data;
  - share of births attended by qualified health personnel has increased by 3 percentage points;
  - availability of essential drugs maintained at close to 90 percent due to community-managed revolving drug funds and an independently managed central purchasing store.

### HIV/AIDS and gender action
- HIV/AIDS:
  - target: adoption and implementation of a new Strategy and Action Plan for HIV/AIDS control and prevention.
  - Met. The 2002-06 HIV/AIDS Strategic Plan was prepared participatorily, validated in 2002, and adopted by Cabinet on February 19, 2003.
  - Implementation: decentralization to provinces, mobilization across population segments, improved sentinel surveillance, expanded HIV testing, increased access to ARV treatment.
- Gender:
  - Met. A Gender Action Plan (2001–05) was adopted by Cabinet at end-2000; a Comprehensive Gender Action Plan to eliminate gender disparities in the law was adopted in 2003.
  - Implementation includes gender-sensitive reforms of the Constitution, the Land law, and adoption of an anti-discrimination law (Law No 47/2001 adopted by the National Assembly in October 2001).

### Priority spending and expenditures (Table 1 highlights)
- Total priority spending (in percent of GDP), 1998–2004:
  - 1998: 2.8
  - 1999: 3.9
  - 2000: 4.0
  - 2001: 5.3
  - 2002: 6.2
  - 2003: 6.9
  - 2004: 8.5
- Education (percent of GDP), 1998–2004:
  - 1998: 2.2
  - 1999: 3.2
  - 2000: 3.2
  - 2001: 3.5
  - 2002: 3.9
  - 2003: 4.2
  - 2004: 4.0
- Health (percent of GDP), 1998–2004:
  - 1998: 0.4
  - 1999: 0.5
  - 2000: 0.6
  - 2001: 0.7
  - 2002: 0.8
  - 2003: 0.6
  - 2004: 1.0
- Agriculture (percent of GDP), 1998–2004:
  - 1998: 0.0
  - 1999: 0.0
  - 2000: 0.0
  - 2001: 0.2
  - 2002: 0.3
  - 2003: 0.2
  - 2004: 0.2
- Export promotion (percent of GDP), 1998–2004:
  - 1998: 0.0
  - 1999: 0.0
  - 2000: 0.0
  - 2001: 0.0
  - 2002: 0.0
  - 2003: 0.0
  - 2004: 0.4
- Transport and communication (percent of GDP), 1998–2004:
  - 1998: 0.0
  - 1999: 0.0
  - 2000: 0.0
  - 2001: 0.1
  - 2002: 0.3
  - 2003: 0.4
  - 2004: 0.3
- Infrastructure (energy and water) (percent of GDP), 1998–2004:
  - 1998: 0.0
  - 1999: 0.0
  - 2000: 0.0
  - 2001: 0.0
  - 2002: 0.2
  - 2003: 0.0
  - 2004: 1.1
- Common Development Fund (CDF) (percent of GDP), 1998–2004:
  - 1998: 0.0
  - 1999: 0.0
  - 2000: 0.0
  - 2001: 0.0
  - 2002: 0.1
  - 2003: 0.4
  - 2004: 0.3
- Other 1/ (percent of GDP), 1998–2004:
  - 1998: 0.2
  - 1999: 0.2
  - 2000: 0.2
  - 2001: 0.9
  - 2002: 0.5
  - 2003: 1.0
  - 2004: 1.3
- Memorandum items:
  - HIPC relief (percent of GDP), 1998–2004: 0.0, 0.0, 0.0, 0.0, 1.4, 1.5, 1.3, 1.4 (note: presented in the table across years in source)
  - Total expenditure (billions of RF), 1998–2004:
    - 1998: 117.4
    - 1999: 126.5
    - 2000: 131.7
    - 2001: 158.1
    - 2002: 174.6
    - 2003: 216.0
    - 2004: 275.4
  - Nominal GDP (billions of RF), 1998–2004:
    - 1998: 621.3
    - 1999: 644.9
    - 2000: 705.7
    - 2001: 754.3
    - 2002: 825.0
    - 2003: 905.3
    - 2004: 1054.3

### Expenditure management and public finance
- Since 1999, the government has maintained the policy of protecting social sector budget allocations from cuts during the fiscal year; military spending has been progressively reduced enabling reallocation to priority areas.
- Since the 2002 budget cycle:
  - expenditures classified in all ministries according to programs and sub-programs, expected outputs, activities and inputs;
  - as of 2003, budget preparation based on sectoral strategy notes prepared by line ministries.
- Recent public expenditure management achievements:
  - adoption of a medium-term economic framework linking sectoral strategies to the budget;
  - improvements to the cash management system;
  - computerization of budget preparation and reporting.
- An organic budget law has been recently submitted to parliament; significant capacity building in line ministries and local government is needed for implementation.

### Macroeconomic stability and key indicators (Table 2 highlights)
- Real GDP growth (percentage change), 1999–2004:
  - 1999: 7.6
  - 2000: 6.0
  - 2001: 6.7
  - 2002: 9.4
  - 2003: 0.9
  - 2004: 4.0
- Consumer prices (end of period), 1999–2004:
  - 1999: 2.1
  - 2000: 5.8
  - 2001: -0.2
  - 2002: 6.2
  - 2003: 7.7
  - 2004: 10.2
- Central government budget (percent of GDP), Total revenue (excluding grants), 1999–2004:
  - 1999: 9.9
  - 2000: 9.7
  - 2001: 11.4
  - 2002: 12.2
  - 2003: 13.5
  - 2004: 13.9
- Central government budget (percent of GDP), Total expenditure and net lending, 1999–2004:
  - 1999: 19.6
  - 2000: 18.7
  - 2001: 21.0
  - 2002: 21.2
  - 2003: 23.9
  - 2004: 26.1
- Domestic fiscal balance (excluding demobilization spending) (percent of GDP), 1999–2004:
  - 1999: -3.5
  - 2000: -2.3
  - 2001: -2.2
  - 2002: -3.8
  - 2003: -4.7
  - 2004: -5.3
- Money and credit (percentage change, end of period):
  - Domestic credit, 1999–2004: 12.8, 0.7, 0.3, -4.0, 19.7, -22.6
  - Broad money, 1999–2004: 6.5, 14.4, 9.2, 11.4, 15.2, 12.6
- External trade (percentage change):
  - Export volume, 1999–2004: 12.7, 19.7, 73.2, -10.0, -12.5, 26.8
  - Import volume, 1999–2004: -5.3, -14.6, 2.3, -6.3, 1.1, 4.6
  - Terms of trade (deterioration -), 1999–2004: -16.5, 7.1, -37.9, -24.0, 4.1, 13.2
- Balance of payments (percent of GDP):
  - Current account balance (excluding official transfers), 1999–2004: -16.9, -16.5, -15.9, -16.6, -19.2, -18.1
  - Gross reserves (in months of imports of goods and services), 1999–2004: 4.7, 5.4, 6.0, 6.3, 5.0, 5.8

### Program implementation and staff assessment
- Overall: Rwanda broadly maintained macroeconomic stability since reaching the decision point, with a weakening in the second half of 2003 due to bad weather and looser-than-expected fiscal and monetary policies; in 2004 growth resumed driven by construction and services and non-food-and-energy consumer price inflation was around 5 percent.
- Revenue and financing:
  - Domestic revenue increased from about 10 percent of GDP in 1999 to about 14 percent of GDP in 2004, driven by a VAT introduction in 2001, income tax reforms in 2003, and an overhaul of tax administration in 2004.
  - Grants were on average higher by 4.5 percent of GDP per year compared with decision point projections.
  - Domestic borrowing remained below 0.5 percent of GDP during 2000-04.
- Program implementation:
  - Apart from temporary policy slippages in the second half of 2003, implementation of the PRGF-supported program through end-2003 and during 2004 was broadly on track.
  - A new PRGF arrangement was approved in August 2002; first review completed in June 2003; second and third reviews completed in June 2004; staff recommended completion of the fourth review based on a six-month track record of successful policy implementation.

*Source: IMF staff report excerpt (2004–2005).*

### 16.      In view of the strong performance in most policy areas, particularly in

### _cr05173 - 16.      In view of the strong performance in most policy areas, particularly in

### Waiver request and tea-sector reforms
- Staffs recommend a waiver for the nonobservance of the completion point trigger related to reforms in the tea sector that has not been fully met, given strong performance in most policy areas, particularly in education and health where the completion point triggers have been surpassed, and given the completion of the fourth review under the PRGF arrangement.
- Mulindi factory privatization:
  - Authorities brought the factory to the point of sale; their rejection of the final bid was assessed to be on reasonable grounds.
  - Staffs welcome the authorities' commitment to privatize all remaining factories.
  - Staffs believe review of the privatization of Pfunda and Mulindi will result in revisions to the privatization process to improve prospects for successful and rapid privatization of remaining factories.
- Other tea-sector reforms:
  - Restructuring of OCIR-Thé and redefinition of its role have been proceeding satisfactorily, as noted under the Institutional Reform Credit.

### III. DELIVERY OF DEBT RELIEF AND LONG-TERM DEBT SUSTAINABILITY — A. Reconciliation of Decision Point Debt Data
- Reconciliation of debt data at end-1999 confirmed the amount of assistance under the enhanced HIPC Initiative approved at the decision point.
- IDA and IMF staffs, with Rwandese authorities, reviewed the data used at the time to ensure accuracy.
- Revisions resulted in a decrease of the debt reduction needed to reach the 150 percent HIPC threshold for the NPV of debt-to-exports ratio from US$452.4 million in NPV terms to US$451.2 million, representing less than one percent of the targeted NPV of debt after HIPC relief.
- Given the marginal net revision, staffs left unchanged their assessment of required debt relief under the HIPC Initiative at the decision point and the ensuing common reduction factor.
- Main revisions to debt data:
  - Multilateral creditors: NPV of Rwanda’s multilateral debt to IFAD and BADEA revised upward by US$1.2 million and US$1.4 million, respectively.
  - Bilateral creditors: NPV of bilateral debt after traditional debt relief revised downward with respect to Austria (US$1.1 million), Canada (US$1.2 million), and France (US$1.2 million), and upward with respect to Kuwait (US$4.5 million).
- Reconciliation coverage: 95 percent of nominal debt data as of end-1999 reconciled with creditor statements.

### B. Status of Creditor Participation — key commitments and interim relief
- Creditors accounting for 95 percent of total HIPC Initiative debt relief estimated at the decision point have given satisfactory financing assurances for their share of assistance.
- Multilateral creditors:
  - All multilateral creditors agreed to provide full share under the Enhanced HIPC Initiative.
  - Multilateral debt relief amounts to US$396.5 million in NPV terms (87.6 percent of total HIPC debt relief).
  - Interim relief provided by all except IFAD; IFAD committed to provide its share at completion point.
  - IDA:
    - Debt relief of US$227.5 million in NPV terms.
    - Delivered through an 88.4 percent reduction of debt service falling due on disbursed and outstanding debt to IDA as of end-1999, over the period 2001-20.
    - Total nominal debt-service savings from IDA amount to US$404.7 million.
    - Interim assistance of US$56.5 million delivered through end-2004.
  - IMF:
    - Enhanced HIPC assistance amounts to SDR 33.8 million in NPV terms (equivalent to US$43.8 million).
    - Interim assistance disbursed: SDR 14.45 million as of end-2004.
    - Remaining IMF assistance: SDR 19.36 million to be disbursed at completion point; projected to cover, on average, over 50 percent of Rwanda’s principal repayments falling due to the IMF during 2005–10.
  - AfDB Group:
    - Debt relief amounts to US$75.0 million in NPV terms.
    - Provided through an 80 percent reduction of debt service on debt outstanding and disbursed as of end-1999, until July 2025.
    - Total nominal debt-service savings: US$144 million; US$20.1 million delivered through end-2004.
  - Other multilaterals:
    - BADEA: US$21.1 million in NPV terms; part delivered via concessional rescheduling of arrears as of end-1998 and payments in 1999 and 2000.
    - European Union: expected total relief US$13.1 million in NPV terms; interim assistance as of end-2004: €4.2 million nominal cancellation of identified loan service.
    - OPEC Fund: expected relief US$4.7 million in NPV terms; interim relief through two concessional loans already disbursed.
- Bilateral and commercial creditors:
  - Paris Club creditors agreed in principle to provide share under Enhanced HIPC Initiative: US$34.8 million in NPV terms.
  - Interim assistance provided through flow treatment under Cologne terms (agreed March 7, 2002).
  - Bilateral agreements signed with all Paris Club creditors except France and Japan (draft agreements exchanged).
  - Many creditors indicated willingness to provide additional assistance beyond HIPC relief, estimated at about US$9.4 million in end-2003 NPV terms.
  - Non-Paris Club bilateral creditors expected to provide comparable treatment, amounting to US$21.1 million in NPV terms; some have already provided part of assumed share of traditional debt relief.
  - Note: Libya announced it would not participate in the Enhanced HIPC Initiative; People's Republic of China cancelled loans representing US$14.2 million in NPV terms; Kuwait and Saudi Arabia provided debt relief representing US$4.0 million and US$10.3 million, respectively.

### C. Updated Debt Sustainability Analysis — end-2003 status and projections
- DSA updated jointly by authorities and IMF/IDA staffs based on end-2003 loan-by-loan debt data.
- Exchange rates and interest rates used in the DSA presented in Table 13 (table not reproduced here).
- Reconciliation coverage at end-2003: 98 percent.
- Nominal external debt:
  - Reached US$1.6 billion at end-2003, compared with US$1.3 billion at end-1999.
  - Of total nominal debt at end-2003, 88.3 percent owed to multilateral creditors.
  - IDA accounted for 58.1 percent of total outstanding debt at end-2003.
  - Bilateral debt amounted to US$183.7 million with US$88.9 million due to Paris Club creditors.
  - Except for US$26.2 million, entire stock of outstanding debt is official development assistance (ODA).
- NPV of external debt at end-2003 after full delivery of decision point HIPC assistance: US$467.1 million, equivalent to 326 percent of exports (decision point projection was 193 percent).
- Including bilateral debt relief beyond HIPC assistance, NPV of debt reduced to US$457.7 million, equivalent to 320 percent of exports—still well above the 150 percent Enhanced HIPC threshold.

### Debt sustainability over 2004–23 — revised macroeconomic framework and main changes
- Main changes compared with decision point framework:
  - Economic growth revised downward from flat 6 percent to gradual increase from 4 percent in 2005 to 5.5 percent from 2011 onward.
  - Export growth revised downward from annual average 11 percent for goods and services (2000–19) to long-term rate of 8 percent, with initial growth rate of 9 percent during 2005–13.
  - External financing (budget and project support) projected to average 12.3 percent of GDP during 2005–23, with 17 percent of that financed by concessional borrowing on standard IDA terms.
  - Framework assumes higher share of future grant financing of 83 percent, compared with average grant share of 67 percent over 2001-04 and expected average share of 80 percent at decision point.
  - Gross domestic savings programmed to increase from 2.3 percent of GDP in 2004 to 9.0 percent of GDP in 2023; private and public savings expected to rise.
- Box 3: Baseline assumptions for 2004-23 (selected):
  - Real GDP growth: increase gradually from 4 percent in 2004 to 5½ percent by 2011.
  - Per capita GDP: increase from 1.2 percent in 2004 to 2.7 percent by 2011.
  - Inflation: fall to 6 percent in 2005 and stay at 4 percent thereafter.
  - Exports of goods and services: grow about 9 percent until 2013 in U.S. dollar terms, stabilizing at about 8 percent thereafter.
  - Imports: increase by 7 percent on average over 2005-23.
  - Central government tax revenue: increase from 14 percent of GDP in 2004 to 17 percent of GDP by 2023.
  - Noninterest expenditure: increase from 25 percent of GDP in 2004 to peak of 26½ percent by 2013, then decline to about 24 percent by 2023.
  - Current account deficit (including grants): remain between 5 to 9 percent of GDP.
  - Excluding grants: current account deficit improve from 22 percent of GDP in 2005 to about 15 percent in 2015 and 10 percent in 2023.
  - Gross borrowing: on average slightly over 2 percent of GDP.
  - Official grants: project decrease from about 12 percent of GDP over 2005–12 to 6 percent by 2023.
- Staffs expect substantial worsening in debt indicators over the long term compared with decision point projections, despite ambitious grant assumptions:
  - NPV of debt-to-exports ratio after enhanced HIPC assistance and additional bilateral debt relief expected to remain above HIPC threshold throughout projection horizon.
    - From 320 percent at end-2003, ratio peaks at 337 percent in 2004, then slowly declines to reach 191 percent in 2020 and 170 percent by 2023.
    - At decision point, ratio was expected to drop below 150 percent in 2008 and remain below thereafter.
  - Debt service as a share of exports expected to be substantially larger than decision point projections over entire horizon:
    - Ratio expected to remain below 12 percent in any year but, on average, almost twice as high as decision point projections.
    - Debt service payments will rise significantly after 2020 when IDA’s Enhanced HIPC assistance ends; debt service-to-exports ratio would increase to an average of over 9 percent for 2021–23 and continue to rise thereafter.

### D. Sensitivity Analysis and long-term debt sustainability — scenario overview
- Analysis of three alternative scenarios (Table 20, Figures 7 and 8) to assess impact on debt sustainability:
  - Scenario 1: Terms of trade shock (external shock deterioration).
  - Scenario 2: Significant decline in grant financing.
  - Scenario 3: Higher growth outlook broadly in line with authorities’ PRSP baseline.
- Interpretation:
  - Scenarios 1 and 2 illustrate downside risks to debt sustainability.
  - Scenario 3 indicates that higher growth, if accompanied by buoyant fiscal revenue, could improve debt indicators.
  - All scenarios indicate that strengthening export performance is critical for achieving external debt sustainability.

*IMF staff report excerpt.*

### 28.      This scenario illustrates Rwanda’s high vulnerability to changes in

### _cr05173 - 28.      This scenario illustrates Rwanda’s high vulnerability to changes in

### Scenario 1 — Export price decline and import price increase (commodity shock)
- Assumptions:
  - Merchandise export prices in U.S. dollar terms drop by 25 percent relative to the baseline in 2005 and thereafter increase at the same rates as in the baseline (by an average 2 percent per annum).
  - Export volume growth reduced by 2 percentage point during 2005–07, then recovers to baseline rates.
  - Import prices increase by 10 percent in 2005 and thereafter grow at baseline rates.
  - Balance-of-payments financing gap filled by a mix of budgetary loans and grants, similar to baseline.
- Key impacts on debt and exports:
  - Total exports in U.S. dollar terms would fall, on average, by 15 percent per annum relative to the baseline scenario.
  - NPV of debt-to-exports ratio would peak at 383 percent in 2007, exceeding baseline projections by 59 percentage points, then decline to 218 percent in 2023.
  - Debt service-to-exports ratio would worsen by about 1-2 percentage points compared with the baseline.
- Historical context:
  - The magnitude of the shock is comparable to recent history: in 1998, 2001, and 2002, Rwanda’s export prices also dropped by more than 20 percent, mainly driven by a decline in coffee prices and, for 2001 and 2002, coltan.
- Corroboration:
  - Results corroborated by a DSA under the new framework for low-income countries: Rwanda’s NPV of debt-to-exports ratio after enhanced HIPC Initiative assistance and additional bilateral debt relief at end-2003 stood at 286 percent and would fall below 200 percent only by 2012, reaching 142 percent by 2023.

### Scenario 2 — Reduction of external grants
- Assumptions:
  - Grant component in gross central government financing reduced to 55 percent during the projection period from 83 percent in the baseline.
  - The 55 percent assumption is slightly lower than the lowest observed interim share (60 percent in 2002).
  - Other macroeconomic aggregates left unchanged.
- Key impacts:
  - NPV of debt-to-exports ratio would rapidly increase to a peak of 391 percent in 2010 and then remain within about 350-400 percent through 2023.
  - Debt service-to-exports ratio would rise to 16 percent during 2021–23.
- Note:
  - Off-budget grants channeled directly to subordinate government levels or NGO-financed projects are assumed to remain constant.

### Scenario 3 — Higher GDP growth
- Assumptions:
  - Real GDP growth rate exceeds baseline by 1.5 percentage points on average over 2005–23.
  - Higher growth driven by stronger export performance; additional import volume growth limited to 0.7 percentage points per year relative to baseline.
  - Spending as a share of GDP kept constant.
  - Revenue increases by 1.5 percent per year beyond nominal GDP growth through tax base broadening and efficiency gains.
  - Same grant-loan mix as baseline; 17 percent share of total savings used to reduce loan financing.
  - Higher growth assumed to come from efficiency gains (increase in total factor productivity) rather than increased investment or labor supply.
- Key impacts:
  - NPV of debt-to-exports ratio, after Enhanced HIPC Initiative assistance and additional bilateral relief, would fall below the HIPC threshold of 150 percent in 2022 and reach 134 percent in 2023.
  - Debt service-to-exports ratio would slightly fall relative to the baseline.
- Implementation caveats:
  - Requires domestic revenue to grow faster than real GDP, strengthened revenue administration, and measures to broaden the tax base.
  - Requires export earnings (currently covering only about one-third of the import bill) to grow faster than imports and swift implementation of the export promotion strategy.
  - Efficiency-led growth is difficult to achieve based on experience in other countries.

### Summary of scenario implications and policy recommendations
- Findings from the three scenarios:
  - A high and sustained level of grant financing, strong export growth, and further revenue mobilization are key to improving Rwanda’s debt situation.
- Recommended policy focus:
  - Continue strengthening the regulatory environment and infrastructure for private business.
  - Implement the export promotion strategy to lay the basis for strong, export-oriented growth.
  - Further progress in revenue administration.
  - Improve public expenditure management to increase spending efficiency.
- Caveat:
  - Even with strong policy implementation, improvement in the NPV of debt-to-exports ratio will require significant external support in the form of grants.

### Consideration of topping-up of Enhanced HIPC Initiative assistance
- Framework:
  - Enhanced HIPC Initiative allows “topping-up” at the completion point if deterioration in debt sustainability is primarily attributable to a fundamental change in economic circumstances due to exogenous factors, to bring the NPV of debt-to-exports ratio down to 150 percent.
- Case for Rwanda:
  - With an NPV of debt-to-exports ratio reaching 320 percent at end-2003 after additional voluntary bilateral relief, Rwanda warrants consideration for additional HIPC debt relief.
  - Analysis includes decomposition of the change in the NPV of debt-to-exports ratio and consideration of import price developments that affect Rwanda’s ability to carry debt.

### Decomposition of the increase in the NPV of debt-to-exports ratio (end-1999 to end-2003)
- Overview:
  - NPV of debt-to-exports ratio at end-2003 more than doubled compared with the HIPC threshold to 320 percent (assuming additional voluntary bilateral debt relief).
  - Projections at the decision point anticipated an increase from 150 percent at end-1999 to 193 percent at end-2003, largely owing to new borrowing; actual ratio exceeded anticipated by 127 percentage points due to unanticipated developments.
- Four main contributing factors identified:
  - New borrowing
  - Changes in cross-currency exchange rates, especially between the euro and the U.S. dollar
  - Export earnings
  - A lower discount rate
- Selected quantitative items and notes (as presented):
  - End-1999 NPV of debt-to-exports ratio: 150.0
  - End-2003 NPV of debt-to-exports ratio (anticipated at decision point): 193.2
  - Actual end-2003 NPV of debt-to-exports ratio after full delivery of Enhanced HIPC relief: 326.5
  - Net impact of other factors results in a minor increase of about 3 percentage point.
- New borrowing:
  - Decision point projected new borrowing would increase the ratio by 91.8 percentage points (listed as 91.8 in table).
  - Actual disbursement volumes stayed well below decision point projections, lessening the impact by 10 percentage points.
  - New borrowing was less concessional than expected; projections mistakenly used the U.S. dollar discount rate instead of the SDR discount rate for SDR-denominated borrowing (SDR discount rate at decision point was 5.59 percent vs. U.S. dollar discount rate of 7.04 percent).
- Exchange rate changes:
  - Unanticipated exchange rate movements led to a deterioration of 22 percentage points in the NPV of debt-to-exports ratio.
  - About three-quarters of Rwanda’s nominal debt at end-2003 was denominated in SDRs and Euros, which appreciated substantially against the U.S. dollar while most export receipts are denominated in U.S. dollars.
- Export performance:
  - Growth in export earnings lowered the NPV of debt-to-exports ratio by almost 11 percentage points between the decision and completion points, but this fell short of projections due to a deterioration in export prices.
  - Merchandise export volumes improved the NPV by 64 percentage points; actual volume growth averaged 18 percent per annum during 1999–2003 versus projected 13 percent.
  - The fall in merchandise export prices led to a 67 percentage point increase in the NPV of debt-to-exports ratio (three-quarters unanticipated), driven largely by coffee price declines; at the trough in 2002 unit coffee price was US$0.74, about half the price projected at the decision point.
  - Exports of nonfactor services improved the NPV by almost 14 percentage points, less than anticipated.
- Discount rate changes:
  - The unexpected decline in discount rates contributed about one-third of the total change in the NPV of debt-to-exports ratio and almost half of the unanticipated change.
  - For Rwanda, an empirical note found a 100 basis point reduction in industrial country interest rates in the past was associated with a 6 percent fall in the country’s export prices over a subsequent five-year horizon.

### Factors underlying Rwanda’s export performance (selected points)
- Structural and external factors affecting traditional exports:
  - Poor infrastructure; high transportation costs; electricity shortages; low capacity in production, processing and marketing; insufficient access to capital.
  - Coffee sector: large share of growers lack critical skills, small production units, coffee trees not rejuvenated leading to gradual decline in bean quality and quantity; production affected by unfavorable rains (notably in 2003). Authorities encourage diversification toward higher-priced fully washed coffee.
  - Tea sector: after recovering to pre-genocide levels by 1997, tea volumes remained constant through 2003 due to low productivity and poor, volatile quality; privatization of remaining state-owned tea factories suggested.
  - Nontraditional exports (hides and skins, pyrethrum, cassiterite) increased but have not reached critical mass; industries dominated by small-scale, capital-constrained firms.
  - Tourism: additional hotel capacity and improved infrastructure helped but receipts fell short of expectations, affected by poor regional integration and regional instability; authorities moving toward increased regional integration and actions under export promotion strategy.
- Statistical notes:
  - On average, coffee and tea exports accounted for over half of total merchandise export earnings during 1999–2003.
  - Coffee export volumes averaged 17,300 tons over 1999-2003 vs. 35,300 tons during 1984–89.

*Italicized source: Excerpt from IMF staff report and DSA material provided in the content unit.*

### 45.      Looking forward, Rwanda’s current export price outlook is clearly worse

### _cr05173 - 45.      Looking forward, Rwanda’s current export price outlook is clearly worse

### Export price outlook and projections
- Export price projections through 2006 made at the decision point deteriorated when compared with those at the completion point.
- A constructed index (assuming the observed decline in the discount rate causes an equivalent drop in the rate of inflation of Rwanda’s export prices) still lies above the completion point projected export price index, indicating the completion point outlook is weaker than implied by a one-to-one relationship between discount rates and export prices.
- World Bank price forecasts for tea and coffee indicate the large decline in export prices will last for several years, with prices returning to decision point levels only after 2015 (Figure 5).
- For coffee:
  - Coffee demand increased by 1.5 percent in the last couple of years.
  - Coffee production rose at an average rate of 3.6 percent, reflecting new plantations in Brazil and Colombia and rapid expansion in Vietnam (Robusta), while Rwanda produces Arabica.

### Discount rate, NPV measures, and debt ratios
- The decline in the discount rate is treated as reflecting lower global inflation expectations and is analyzed as an exogenous fundamental factor affecting Rwanda’s NPV of debt-to-exports ratio.
- NPV of debt over NPV of exports ratio at end-2003:
  - 11 percent estimated at the decision point (baseline series extended using comparable assumptions from 2007 onward).
  - 25 percent estimated at the completion point, more than doubling from the decision point estimate and reflecting the impact of changed projected export values.
- The substantial deterioration in Rwanda’s NPV of debt-to-exports ratio between the decision and completion points is attributed primarily to exogenous factors: lower export prices, changes in cross-currency exchange rates, and lower-than-expected concessionality of new borrowing.

### Other considerations affecting repayment capacity
- Imported energy prices:
  - Decision point expectation: import prices expected to increase by 12 percent between 1999 and 2006.
  - Completion point projection: import prices expected to increase by 29 percent over the same period, with a particularly steep rise in 2004 due to higher energy prices.
  - Higher energy prices imply a higher share of export receipts will be required to finance imports rather than debt repayment, adding a lasting burden on debt servicing.
- High volumes of new borrowing:
  - The volume through end-2003 remained below levels anticipated at the decision point.
  - One-third of new borrowing was related to existing projects.

### Staff assessment and policy recommendation (topping-up)
- Staffs conclude that exogenous factors account for more than 50 percent of both the unanticipated and the total increase in the NPV of debt-to-exports ratio, providing sufficient justification for topping-up of debt relief at the completion point.
- Specific recommendation:
  - Grant additional HIPC Initiative relief to bring Rwanda’s NPV of debt-to-exports ratio from 320 percent at end-2003 (after additional voluntary bilateral debt relief) down to the HIPC Initiative threshold of 150 percent.
  - Required topping-up of HIPC Initiative assistance in NPV terms at the completion point: US$243.1 million.
- Supporting observations for topping-up:
  - Authorities remain committed to reforms and have improved implementation of policies.
  - Borrowing has been prudent despite external shocks and a deterioration in terms of trade.
  - Measures are being taken to improve export performance, including initiating implementation of an export promotion strategy.

### Post–topping-up projections and fiscal space for PRSP spending
- Under the baseline scenario for new lending from IDA and other concessional sources:
  - NPV of debt-to-exports ratio projected to rise from 150 percent in 2003 to 200 percent in 2007.
  - Ratio then projected to fall to 150 percent in 2014 and remain around this level for the following 10 years.
  - Debt service-to-exports ratio estimated to fall to 4 percent by 2011 and stay between 4 and 5 percent for the rest of the projection period.
  - These projections assume that grants will comprise 83 percent of financing.
- With topping-up, Rwanda’s external debt situation would improve considerably over the projection period, freeing up resources for additional PRSP-related spending.

### Conclusions
- IMF and IDA staffs view Rwanda’s performance on completion point conditions under the Enhanced HIPC Initiative as satisfactory:
  - Full PRSP prepared and implemented satisfactorily.
  - PRGF-supported program has had a track record of more than six months.
  - Key structural reforms and social measures implemented.
- Given strong progress in structural reforms and policy commitments on tea estate privatization, staffs recommend a waiver of the completion point trigger on the tea sector.

*Source: _cr05173 - 45.      Looking forward, Rwanda’s current export price outlook is clearly worse*

### 51.      In light of the above, the staffs of the IMF and IDA recommend that the

### In light of the above, the staffs of the IMF and IDA recommend that the Executive Directors determine that Rwanda has reached the completion point under the Enhanced HIPC Initiative framework

### Recommendation and conditions for disbursement
- Staffs recommend that Executive Directors determine Rwanda has reached the completion point under the Enhanced HIPC Initiative framework.
- Additional assistance beyond that already committed at the decision point in the amount of US$243.1 million in NPV terms be granted to lower Rwanda’s NPV of debt-to-exports ratio at end-2003 to 150 percent.
- The additional assistance of the IMF would be disbursed when other creditors provide satisfactory assurances of their participation in this exceptional effort.
- Once satisfactory assurances have been received, IMF staff will return to the IMF Board with a proposed decision approving the disbursement of the IMF’s share of the additional relief.

### Issues for discussion (points for Directors)
- Do Directors agree that Rwanda has met the conditions for reaching the completion point at this time?
- Do Directors agree that Rwanda’s poverty reduction strategy and expenditure-tracking system provide a satisfactory basis for ensuring that enhanced HIPC Initiative assistance and other resources will continue to promote poverty reduction?
- Do Directors agree that satisfactory assurances have been given by Rwanda’s other creditors to commit enhanced HIPC Initiative resources to Rwanda, as approved at the decision point, on an irrevocable basis?
- Do Directors agree that the deterioration in Rwanda’s debt sustainability is primarily attributable to a fundamental change in its economic circumstances due to exogenous factors?
- If so, do Directors agree that exceptional additional HIPC Initiative assistance be granted to lower Rwanda’s NPV of debt-to-exports ratio at end-2003 to 150 percent?
- If so, do Directors agree that this additional assistance would be granted when the Boards decide that other creditors provide sufficient assurances to participate in this exceptional effort?

### Composition of external debt (end-1999 and end-2003; NPV after traditional relief)
- End-1999 (NPV after traditional debt relief, at end-1999 discount and exchange rates):
  - IDA: 54.9%
  - IMF: 6.0%
  - AfDB: 17.9%
  - Paris Club: 5.7%
  - Non Paris Club: 7.6%
  - Other multilateral creditors: 8.0%
- End-2003 (NPV after traditional debt relief, at end-2003 discount and exchange rates):
  - IDA: 58.1%
  - IMF: 5.8%
  - AfDB: 16.8%
  - Other multilateral creditors: 7.7%
  - Paris Club: 5.7%
  - Non Paris Club: 6.0%

### External debt and debt service indicators (2003–23 projections)
- Indicators presented (percent):
  - NPV of External Debt-to-Exports shown for 2003–2023 under scenarios:
    - After traditional debt-relief mechanisms
    - After enhanced HIPC assistance
    - After bilateral debt relief beyond HIPC assistance
    - After possible topping-up Assistance at the Completion Point
  - Debt Service-to-Exports shown for 2004–2023 under same scenarios

### Sensitivity analysis (2003–23)
- Scenarios displayed (percent):
  - Baseline
  - Terms of trade shock
  - Lower grants
  - Higher growth
- Both NPV of External Debt-to-Exports and Debt Service-to-Exports shown across 2003–2023 for the scenarios above.

### Selected social and demographic indicators (latest single year)
- Population, mid year (millions): 4.4, 6.1, 7.9, 6? (table rows show multiple comparators; source: World Bank, World Development Indicators)
- Growth rate (percentage; annual average for period): 3.3, 3.5, 2.9, 2.5, 1.9
- Urban population (percentage): 4.0, 5.0, 15.2, 32.3, 30.8
- Total fertility rate (births per woman): 8.4, 7.7, 5.9, 5.1, 3.5
- GNI per capita (US$): 100.0, 270.0, 240.0, 460.0, 430.0
- Access to an improved water source (percentage of population), Total: 58.1, Urban: 82.7, Rural: 46.4
- Immunization rate (percentage under 12 months):
  - Measles: 52.0, 69.0, 57.8, 59.8
  - DPT: 50.0, 77.0, 52.9, 61.5
- Child malnutrition (percentage under 5 years): 24.3
- Life expectancy at birth (years), Total: 44.8, 47.5, 39.9, 46.2, 58.9
- Infant mortality (per 1,000 live births): 124.0, 130.0, 118.0, 105.4, 80.4
- Under 5 mortality (per 1,000 live births): 209.0, 219.0, 203.0, 170.6, 120.6
- Births attended by skilled health staff (percentage): 31.3

### Selected economic and financial indicators (2000–08 highlights and projections)
- GDP at constant prices (annual percent change): 6.0, 6.7, 9.4, 0.9, 4.0, 4.0, 4.3, 4.5, 4.7
- GDP deflator (annual percent change): 3.3, 0.2, 0.0, 8.7, 12.0, 6.4, 4.0, 4.0, 4.0
- Consumer price index (annual average): 3.9, 3.4, 2.0, 7.4, 12.0, 7.0, 4.0, 4.0, 4.0
- Exports, f.o.b. (annual percent change): 44.7, 4.2, -28.1, -6.3, 54.3, -8.3, 7.1, 7.1, 10.2
- Imports, f.o.b. (annual percent change): -3.6, -0.8, -1.3, 4.0, 12.5, 28.1, 5.7, 4.4, 5.2
- Gross official reserves (in months of imports): 5.4, 6.0, 6.3, 5.0, 5.8, 4.8, 4.8, 4.8, 4.4
- Total revenue (percent of GDP, various series): e.g., 19.4, 19.6, 19.4, 21.6, 25.9, 25.8, 26.2, 25.4, 27.1
- Total expenditure and net lending (percent of GDP, various series): e.g., 18.7, 21.0, 21.2, 23.9, 26.1, 26.7, 27.7, 27.3, 27.1
- External public debt (end of period, percent of GDP): 75.0, 79.3, 80.6, 88.4, 88.8, 73.1, 70.3, 68.0, 63.6
- Debt service after HIPC Initiative (in percent of Exports of goods and services): 14.1, 12.0, 11.1, 9.7, 7.9, 8.6, 10.2, 11.1
- Debt service after HIPC Initiative (in percent of Government revenue): 11.4, 7.5, 6.8, 7.2, 5.1, 5.6, 6.7, 6.2
- GDP at current market prices (millions of U.S. dollars): 1,794; 1,704; 1,732; 1,684; 1,835; 2,057; 2,209; 2,353; 2,512

### Observance of quantitative and structural performance criteria and benchmarks under the PRGF Arrangements 2001–04
- Quantitative performance criteria (selected statuses across review dates):
  - Net foreign assets of the NBR: Met / Met / Met / Met / Not met / Met
  - Net domestic assets of the banking system: Met / Not met
  - Reserve money: Met / Not met / Met / Met / Not met / Met
  - Net credit to the central government by the banking system: Met / Met / Met / Met / Not met / Met
  - Domestic fiscal balance: Not met / Not met / Not met / Met
  - Primary fiscal balance: Met / Met
  - Social spending / Priority spending: Met / Met
  - Net accumulation of domestic arrears: Met / Met / Not met / Not met / Not met / Met
  - New nonconcessional external debt: Met / Met / Met / Not met / Not met / Met
  - Short-term external debt: Met / Met / Met / Met / Met / Met
- Continuous quantitative performance criteria:
  - Stock of outstanding nonreschedulable external arrears: Not met / Met / Not met / Met / Not met / Not met
- Indicative targets (example):
  - Broad money: Not met / Met / Not met / Met

### Structural performance criteria and benchmarks (selected actions and statuses)
- Structural performance criteria examples (selected):
  - Begin collecting taxes under VAT law — status entries across dates (e.g., Met, Not met in table)
  - Ensure National Bank of Rwanda conducts weekly auctions to sell foreign exchange to the highest bidder among commercial banks — End-December 2002: Met
  - Enact a budget for 2003 — End-October 2002: Met
  - Prepare financial instructions to promote effective expenditure control — End-December 2002: Not met / later entries Met
  - Submit revised investment code to parliament repealing indirect and direct tax provisions of the code — End-March 2001: Met
  - Publish statistics of government financial operations following Government Finance Statistics format on a quarterly basis — End-June 2003: Met / End-December 2003: Not met
- Structural benchmarks examples (selected):
  - Develop a system for monitoring poverty-related expenditures on a monthly basis
  - Prepare a monitorable action plan for strengthening the Auditor General's Office and deliver a full audit of public accounts annually
  - Complete audits of large companies' 1998 tax returns and complete 40 audits of 1999 returns
  - Finalize restructuring plans for a specified commercial bank
  - Start publishing government financial operations statistics quarterly
  - Develop and implement mechanism to ensure borrowing by district governments is reported monthly to central government
  - Commission a comprehensive financial sector study to manage nonperforming loans; conduct full audits of three banks
  - Submit Organic Law to parliament; operationalize NBR's Internal Audit Department; complete external audit of NBR 2003 financial statements

### Status of creditor participation for HIPC assistance as approved at the decision point (NPV and modalities)
- Total NPV assistance (as estimated at decision point / revised at completion point): Total: 1,261.2 / 1,259.7; NPV of Debt After Traditional Debt Relief: 634.2 / 635.3 (in millions of U.S. dollars)
- Multilateral institutions total (decision point / completion point): 1,093.5 / 1,093.0; NPV after traditional relief: 555.8 / 557.4
  - IDA: 691.1 / 691.4; NPV after traditional relief: 318.9 / 319.2
  - AfDB Group: 225.2 / 225.4; NPV after traditional relief: 105.1 / 104.7
  - IMF: 75.9 / 75.9; NPV after traditional relief: 61.4 / 61.0
  - BADEA: 33.4 / 33.5; NPV after traditional relief: 29.6 / 31.0
  - IFAD: 31.9 / 31.9; NPV after traditional relief: 15.2 / 16.4
  - EU/EIB: 28.2 / 28.2; NPV after traditional relief: 18.4 / 18.4
  - OPEC Fund: 6.7 / 6.7; NPV after traditional relief: 6.6 / 6.6
  - EEC-IDA administered: 1.2 / 0.0; NPV after traditional relief: 0.6 / 0.0
- Official bilateral creditors total (decision point / completion point): 167.2 / 165.9; NPV after traditional relief: 77.8 / 77.7
  - Paris Club: 73.0 / 71.2; NPV after traditional relief: 48.5 / 44.6
  - Pre-cutoff date: 73.0 / 72.0; NPV after traditional relief: 48.5 / 44.9
  - ODA / Non-ODA splits and individual bilateral entries listed (e.g., Austria 9.3 / 8.7; France 45.0 / 45.0; Japan 15.2 / 12.6; United States 0.6 / 0.6)
- Non-Paris Club creditors total (decision point / completion point): 94.1 / 94.7; NPV after traditional relief: 29.4 / 33.0
  - Examples: People's Republic of China 32.0 / 32.3; Kuwait 29.4 / 29.6; Saudi Arabia 30.0 / 30.0
- Commercial loans: 0.5 / 0.8; NPV after traditional relief: 0.6 / 0.3
- Memorandum item: Paris Club cutoff date is December 31, 1994.

### Status of creditor participation for HIPC assistance as approved at decision point — Table of creditor modalities and NPV shares (selected)
- IDA:
  - Debt Relief in NPV terms (US$ mil.): 227.5
  - Percentage of Total Assistance: 50.3
  - Satisfactory Reply: Yes
  - Modality: reduction of 88.4 percent of the debt service falling due to IDA on disbursed and outstanding debt as of end-1999, over 2001-2020. Interim relief US$56.5 million provided as of end-2004. Total nominal debt service savings US$404.7 million.
- AfDB:
  - Debt Relief: 75.0; Percentage: 16.6; Satisfactory Reply: Yes
  - Modality: reduction of 80 percent of debt-service payments over 2000-2025; interim assistance US$20.1 million provided between 2001 and end-2004. Total nominal savings US$144 million.
- IMF:
  - Debt Relief: 43.8; Percentage: 9.7; Satisfactory Reply: Yes
  - Modality: grants from the PRGF/HIPC Trust Fund to partially cover principal payments due as of end-December 2000. Interim assistance SDR14.45 million provided in 2001–2004.
- European Union:
  - Debt Relief: 13.1; Percentage: 2.9; Satisfactory Reply: Yes
  - Modality: interim assistance through cancellation of debt service in the interim period; interim assistance EUR4.2 million as of end-2004. Completion point: 100 percent cancellation of specific loans.
- BADEA:
  - Debt Relief: 21.1; Percentage: 4.7; Satisfactory Reply: Yes
  - Modality: concessional rescheduling of arrears as of end-1998 and 1999–2000 maturities; estimated US$4.6 million NPV provided; remainder at completion point.
- IFAD:
  - Debt Relief: 10.8; Percentage: 2.4; Satisfactory Reply: Yes
  - Modality: reduction of debt service payments on eligible debt by up to 100 percent until NPV target reached; relief could be delivered over 12 years.
- OPEC Fund:
  - Debt Relief: 4.7; Percentage: 1.0; Satisfactory Reply: Yes
  - Modality: estimated assistance of US$3.4 million in NPV provided through two concessional loans; remainder at completion point.
- Total Multilateral assistance: 396.0 (US$ mil.), 87.5 percent of total.
- Paris Club creditors (total): 35.3 (US$ mil.), 7.8 percent.
- Total Bilateral and Commercial: 56.5 (US$ mil.), 12.5 percent.
- TOTAL (all creditors): 452.4 (US$ mil.), 100.0 percent.

### Delivery of IDA assistance under the Enhanced HIPC Initiative, 2001–27 (selected figures)
- IDA debt service before HIPC relief (selected years, in millions of U.S. dollars and components):
  - Principal and Interest series shown for 2001–2027 with projections and averages.
- IDA assistance under the HIPC Initiative framework (without/with possible topping-up at completion point):
  - Enhanced HIPC Initiative assistance as approved at decision point; figures include principal and interest components and totals (e.g., memorandum item: HIPC Initiative assistance approved at the decision point in NPV terms: 227.5; of which assistance provided during the interim period: 154.2; Possible topping-up assistance in NPV terms: figures provided in table).

### Delivery of IMF assistance under the Enhanced HIPC Initiative, 2000–10 (selected figures and notes)
- Delivery presented in millions of SDRs (selected years 2000–2010) for:
  - Debt service due on current IMF obligations based on decision point estimate and completion point estimate.
  - IMF assistance—interim assistance and assumed completion point assistance (e.g., interim assistance 6.762; 3.205; 4.482 shown in table).
  - Total IMF assistance without/with topping-up and delivery schedules in percent.
  - Share of debt service due on current IMF obligations covered by IMF assistance (selected percentages shown, e.g., 70.7, 57.7, 75.1, 79.6, 83.5, 73.6, 45.3, 59.5, 64.9).
  - Proportion (in percent) of each repayment falling due during the period to be paid by IMF HIPC Initiative assistance from the principal deposited in member's account (examples: 81.3, 71.8, --, 89.0, 60.9, 57.2, 47.4, 42.6, 60.9, 76.8).
- Key memorandum items and assumptions (exact text preserved):
  - 1/ Forthcoming obligations estimated based on rates and principal schedules in effect as of October 31, 2000. Interest obligations include net SDR charges and assessments.
  - 2/ A final disbursement of SDR 19.361 million assumed to be disbursed into member's account at the enhanced HIPC completion point in April 2005.
  - 3/ Includes estimated interest earnings on: (1) amounts held in member's account; and (2) amounts committed but not yet disbursed up to the second completion point. It is assumed that these amounts earn a rate of return of 5 percent in SDR terms; actual interest earnings may be higher or lower. Interest accrued on (1) during a calendar year will be used toward the first repayment obligations falling due in the following calendar year except in the final year, when it will be used toward payment of the final obligations falling due in that year. Interest accrued on (2) during the interim period will be used toward the repayment of obligations falling due during the three years after the completion point.
  - 4/ After traditional debt relief mechanisms.
  - 5/ Total IMF assistance under the HIPC Initiative is [SDR 46.54] million including topping-up assistance, and excluding interest earned on Rwanda's account and on committed but undisbursed amounts as described in footnote 4. The topping-up assistance of [SDR 12.73] million will be updated using the US$/SDR exchange rate at the completion point and disbursed to Rwanda, with accrued interest, when satisfactory financing assurances for the disbursement of such amount have been obtained.
  - 6/ Forthcoming obligations estimated based on rates and principal schedules in effect as of December 31, 2004.
  - 7/ A final disbursement of [SDR 32.091] million (plus accrued interest) is assumed to be disbursed into Rwanda's account at the enhanced HIPC completion point in April 2005. This includes topping up of SDR 12.73 million at the SDR/US$ exchange rate of 0.649786 on March 11, 2005.
  - 8/ The proportion of 60.9 percent was approved by the Board at the time of the request for additional interim assistance to cover principal repayment obligations falling due between January 1 and June 8, 2005. The proportion of 62.7 percent will be applied to principal repayment obligations for the remainder of 2005.

*Source: Rwandese authorities; and IDA and IMF staff estimates, projections, and assessments as presented in the supplied document.*

### 12.73 million at the SDR/US$ exchange rate of 0.649786 on March 11, 2005.

### _cr05173 - 12.73 million at the SDR/US$ exchange rate of 0.649786 on March 11, 2005.

### Paris Club creditors' delivery of debt relief under bilateral initiatives beyond the HIPC Initiative
- Table summary: Columns (1) to (7) describe additional debt relief provided following a specific methodology under bilateral initiatives and must be read as a whole for each creditor.
- "HIPCs" indicates eligible countries effectively qualifying for the HIPC process. A "100 percent" mention indicates debt relief under the enhanced HIPC Initiative framework will be topped up to 100 percent through a bilateral initiative.
- Selected creditor entries (as presented):
  - Australia: HIPCs — 100, 100, 100, 100; notes: post-cutoff date non-ODA relief to apply to debts incurred before a date to be finalized; timing details for both flow and stock relief are to be finalized.
  - Canada: HIPCs — 3/, -, 4/, -, 4/, 100, 100, 100 flow Stock; note: including Bangladesh; moratorium of debt service as of January 2001 on all debt disbursed before end-March 1999 for 13 out of 17 HIPCs with debt service due to Canada; 100% cancellation at completion point; as of July 2004, completion point stock of debt cancellation provided for Benin, Bolivia, Guyana, Senegal and Tanzania.
  - Denmark: HIPCs — 100, 100, 5/, 100, 100, 5/, 100 flow Stock; note: provides 100 percent cancellation of ODA loans and non-ODA credits contracted and disbursed before September 27, 1999.
  - France: HIPCs — 100, 100, 100, -, 100 flow Stock; note: cancellation of 100 percent of debt service on pre-cutoff date commercial claims on the government as they fall due starting at the decision point; at completion point ODA claims relief to special account for specific development projects.
  - Japan: HIPCs — 100, 100, 100, -, -, Stock.
  - Netherlands: HIPCs — 100, 10/, 100, 100, -, 90-100 flow 10/ Stock 10/; note: detailed treatment differentiating ODA and non-ODA, with specified country exceptions and interim relief up to 90 percent for others.
  - United Kingdom: HIPCs — 100, 100, 100, 100, 15/, 100 flow 15/ Stock; note: "beyond 100 percent" full write-off of all debts of HIPCs as of their decision points, and reimbursement at the decision point of any debt service paid before the decision point.
  - United States: HIPCs — 100, 100, 100, 100, 16/, 100 flow Stock; note: 100 percent post-cutoff date non-ODA treated on debt assumed prior to June 20, 1999 (the Cologne Summit).
- Additional notes excerpted:
  - Several footnotes (numbered) specify country‑by‑country modalities, cutoff dates, classification issues, and special conditions (e.g., Norway canceled all ODA claims; Sweden has no ODA claims; Switzerland in principle 100 percent cancellation with caveat about possible 90 percent at decision point in certain cases).
- Source: Paris Club Secretariat.

### Discount rates and exchange rates used for NPV calculations (decision point and completion point)
- Discount rates (in percent per annum) and end-of-period exchange rates (currency per U.S. dollar) at decision point (End-1999) and at completion point (End-2003):
  - Austrian Shillings: discount 5.47 (decision), 4.63 (completion); exchange 13.70 (decision), 10.89 (completion)
  - Belgian Franc: 5.47, 4.63; 40.16, 31.94
  - Canadian Dollar: 6.67, 5.18; 1.44, 1.29
  - Chinese Yuan: 5.59, 4.20; 8.28, 8.28
  - Danish Krone: 5.32, 4.77; 7.40, 5.96
  - Deutsche Mark: 5.47, 4.63; 1.95, 1.55
  - Euro: 5.47, 4.63; 1.00, 0.79
  - Finish Markaa: 5.47, 4.63; 5.92, 4.71
  - French Franc: 5.47, 4.63; 6.53, 5.19
  - Irish Punt: 5.47, 4.63; 0.78, 0.62
  - Italian Lira: 5.47, 4.63; 1927.40, 1533.07
  - Japanese Yen: 1.98, 1.70; 102.20, 107.10
  - Kuwaiti Dinar: 5.59, 4.47; 0.30, 0.29
  - Lybian Dinar: 5.59, 4.20; 0.46, 1.30
  - Netherland Guilder: 5.47, 4.63; 2.19, 1.74
  - Norwegian Krone: 6.64, 5.30; 8.04, 6.68
  - Portuguese Escudo: 5.47, 4.63; 199.56, 158.73
  - Saudi Arabian Ryal: 5.59, 4.20; 3.75, 3.75
  - Spanish Peseta: 5.47, 4.63; 165.62, 131.74
  - Special Drawing Rights: 5.59, 4.20; 0.73, 0.67
  - Swedish Kroner: 5.80, 5.00; 8.53, 7.19
  - Swiss Franc: 4.27, 3.21; 1.60, 1.24
  - UK Pound Sterling: 6.70, 5.37; 0.62, 0.56
  - United Arab Emirates dirham: 5.59, 4.20; 3.67, 3.67
  - United States Dollar: 7.04, 4.47; 1.00, 1.00
- Methodology notes:
  - 1/ Discount rates used are the average commercial interest reference rates (CIRRs) for the respective currencies over the six-month period ending in December 2003 for the completion point and in December 1999 for the decision point.
  - 2/ For currencies without CIRRs available, the SDR discount rate is used as a proxy unless the currency is pegged to another currency for which the CIRR is available.
  - 3/ Exchange rates reported are end-of-period exchange rates.
- Sources: OECD; and IMF, International Financial Statistics.

### Rwanda: Nominal and Net Present Value of External Debt Outstanding at End-2003 (Table 14 excerpts)
- Aggregates (in millions of U.S. dollars, unless otherwise indicated; figures based on data as of December 31, 2003):
  - Total nominal debt: 1,572.5
  - NPV of debt after enhanced HIPC at completion point: 1,009.2
  - After additional bilateral relief NPV: 467.1
  - After additional bilateral relief (in 2005 NPV terms): 457.7
  - Topping-up amount at the completion point (in percent of total debt): 100.0 243.1 (format preserved as in source)
- Multilateral (breakdown):
  - Multilateral nominal: 1,388.8; NPV after enhanced HIPC: 867.0; after additional bilateral relief NPV: 441.5; after additional bilateral relief (in 2005 NPV terms): 441.5; topping-up percent: 96.5 234.5
  - IDA: nominal 912.9; NPV after enhanced HIPC 539.5; after additional bilateral relief 290.3; after additional bilateral relief (2005 NPV) 290.3; topping-up percent: 63.4 154.2
  - AfDB Group: 263.4; 159.0; 77.4; 77.4; 16.9 41.1
  - IMF: 91.9; 78.6; 36.9; 36.9; 8.1 19.6
  - IFAD: 50.4; 31.3; 16.1; 16.1; 3.5 8.6
  - EU/EIB: 30.9; 22.9; 6.0; 6.0; 1.3 3.2
  - BADEA: 21.7; 20.3; 6.0; 6.0; 1.3 3.2
  - OPEC Fund: 16.7; 14.4; 7.8; 7.8; 1.7 4.1
  - Shelter Afrique: 0.9; 1.0; 1.0; 1.0; 0.2 0.5
- Official bilateral creditors: nominal 183.7; NPV after enhanced HIPC 142.3; after additional bilateral relief 25.6; after additional bilateral relief (2005 NPV) 16.2; topping-up percent 3.5 8.6
  - Paris Club: nominal 88.9; NPV after enhanced HIPC 76.0; after additional bilateral relief 9.4; pre-cutoff date 88.9; pre-cutoff date NPV 76.0; pre-cutoff date after additional bilateral relief 9.4; ODA 66.5; ODA NPV 55.1; ODA after additional bilateral relief 9.4; post-cutoff date entries shown as "-".
  - Non-Paris Club: nominal 94.8; NPV after enhanced HIPC 66.3; after additional bilateral relief 16.2; after additional bilateral relief (2005 NPV) 16.2; topping-up percent 3.5 8.6
    - People's Republic of China: 29.7; 26.9; 13.9; 13.9; 3.0 7.4
    - Kuwait: 32.0; 17.4; -, -; 0.0-
    - Libya: 0.4; 0.4; -, -; 0.0-
    - Saudi Arabia: 30.2; 19.1; 2.1; 2.1; 0.5 1.1
    - United Arab Emirates: 2.5; 2.5; 0.3; 0.3; 0.1 0.1
- Commercial loans: indicated as 5/- and classified as Paris Club bilateral loans as of 2002.
- Memorandum: Paris Club cutoff date is December 31, 1994.
- Sources: Rwandese authorities; and IDA and IMF staff estimates.

### Rwanda: Balance of Payments projections, 2005–23 (selected annual figures, in millions of U.S. dollars unless otherwise indicated)
- Exports, f.o.b.:
  - 2005: 63.0
  - 2006: 97.3
  - 2007: 89.2
  - 2008: 95.5
  - 2009: 102.3
  - 2010: 112.7
  - 2011: 125.7
  - 2012: 144.3
  - 2013: 167.6
  - 2018: 188.0
  - 2023: 282.7
  - 2004-13: 417.3
  - 2014-23: 132.8
  - Average column entry: 303.4
- Of which coffee:
  - 2005: 15.0; 2006: 31.0; 2007: 25.0; 2008: 28.9; 2009: 34.1; 2010: 41.2; 2011: 48.7; 2012: 56.8; 2013: 62.7; 2018: 67.7; 2023: 72.9; 2004-13: 93.3; 2014-23: 100.7; average 46.9; memorandum 93.3
- Of which tea:
  - 2005: 22.5; 2006: 22.7; 2007: 21.9; 2008: 24.4; 2009: 26.7; 2010: 29.0; 2011: 31.4; 2012: 38.6; 2013: 52.9; 2018: 64.8; 2023: 72.7; 2004-13: 84.3; 2014-23: 97.7; average 38.5; memorandum 85.9
- Imports, f.o.b.:
  - 2005: 244.0; 2006: 274.4; 2007: 351.6; 2008: 371.8; 2009: 388.0; 2010: 408.2; 2011: 433.6; 2012: 461.9; 2013: 494.5; 2018: 529.7; 2023: 567.4; 2004-13: 787.6; 2014-23: 1047.3; averages 428.1 and 817.2
- Trade balance:
  - 2005: -181.0; 2006: -177.2; 2007: -262.4; 2008: -276.2; 2009: -285.7; 2010: -295.5; 2011: -307.9; 2012: -317.6; 2013: -326.9; 2018: -341.6; 2023: -362.5; 2004-13: -504.9; 2014-23: -630.0; averages -295.4 and -513.8
- Services (net):
  - 2005: -143.4; 2006: -156.2; 2007: -195.7; 2008: -185.8; 2009: -187.1; 2010: -189.8; 2011: -195.6; 2012: -201.6; 2013: -208.8; 2018: -216.7; 2023: -225.3; 2004-13: -257.1; 2014-23: -249.7; averages -196.3 and -252.0
- Income:
  - 2005: -30.5; 2006: -34.1; 2007: -29.7; 2008: -30.0; 2009: -28.3; 2010: -28.0; 2011: -27.2; 2012: -25.9; 2013: -25.0; 2018: -23.4; 2023: -21.0; 2004-13: -12.0; 2014-23: -7.7; averages -27.3 and -12.0
  - Of which interest on public debt 1/: 2005: -10.7; 2006: -13.9; 2007: -13.8; 2008: -13.9; 2009: -14.1; 2010: -13.9; 2011: -13.6; 2012: -13.4; 2013: -13.3; 2018: -13.2; 2023: -13.1; 2004-13: -14.2; 2014-23: -16.5; averages -13.6 and -14.5
- Current transfers (net):
  - 2005: 223.8; 2006: 313.1; 2007: 302.5; 2008: 336.3; 2009: 331.6; 2010: 368.6; 2011: 379.7; 2012: 381.0; 2013: 394.4; 2018: 406.9; 2023: 424.5; 2004-13: 477.0; 2014-23: 525.0; averages 363.9 and 480.8
  - Private transfers: 2005: 31.3; 2006: 35.1; ...; 2023: 114.5; 2004-13: 168.4; 2014-23: 53.3; average 121.8
  - Public transfers 2/ 3/: 2005: 192.5; 2006: 278.0; ...; 2023: 362.5; 2004-13: 356.6; 2014-23: 310.6; average 359.1
    - Of which HIPC Initiative grants: 2005: 23.0; 2006: 27.4; 2007: 31.8; 2008: 36.1; 2009: 35.7; 2010: 32.1; 2011: 32.5; 2012: 30.4; 2013: 29.2; 2018: 30.3; 2023: 30.5; 2004-13: 29.5; 2014-23: 5.8; averages 31.6 and 22.8
- Current account balance (including official transfers): 2005: -131.1; 2006: -54.4; 2007: -185.3; 2008: -155.7; 2009: -169.6; 2010: -144.8; 2011: -150.9; 2012: -164.2; 2013: -166.3; 2018: -174.8; 2023: -184.3; 2004-13: -297.0; 2014-23: -362.4; averages -155.0 and -297.0 (format preserved)
- Capital account (capital transfers; debt forgiveness entries shown as 0.0):
  - Capital transfers (2005–23): 41.1, 60.6, 92.0, 94.2, 98.8, 121.7, 139.8, 159.7, 176.8, 196.0, 217.1, 240.0, 275.5, 135.7, 245.7
  - Debt forgiveness: 0.0 across the table; Principal not yet due forgiven: 0.0 across the table.
- Financial account (selected items):
  - Financial account totals (2005–23): 20.6, 59.3, 34.5, 78.4, 84.2, 20.0, 21.1, 22.8, 21.5, 24.7, 17.8, 85.9, 122.7, 38.4, 85.0
  - Direct investment: 4.7, 3.6, 5.5, 7.0, 13.0, 13.7, 14.3, 15.0, 15.8, 16.6, 17.4, 22.2, 28.4, 12.2, 23.0
  - Public sector capital (long-term borrowing and scheduled amortization): long-term borrowing examples 39.9, 109.3, 64.8, 94.0, 96.5, ...; scheduled amortization examples 32.2, 37.3, 38.2, 37.7, 37.5, ... (full series in table)
  - Other capital: 8.3, -16.2, 2.4, 15.0, 12.2, 4.3, 7.1, 7.3, 5.1, 9.3, 6.5, 11.6, 7.9, 5.3, 8.0
- Capital and financial account balance: 61.8, 119.9, 126.5, 172.6, 183.1, 141.7, 160.9, 182.5, 198.3, 220.7, 234.9, 325.9, 398.2, 174.1, 330.7
- Errors and omissions: 35.7, 22.2, 0.0 (subsequent years 0.0), 2.2 (a later memorandum entry)
- Overall balance: -33.6, 87.7, -58.9, 16.8, 13.5, -3.1, 10.0, 18.4, 32.0, 45.9, 50.7, 28.9, 35.7, 21.3, 33.7
- Financing and reserves (selected):
  - Change in net foreign assets of NBR (increase -): 27.1, -98.9, 43.8, -30.1, -25.0, -7.1, -19.4, -26.3, -37.6, -50.8, -55.5, -32.7, -37.8, -30.7, -37.2
  - Net credit from the Fund: -0.9, -3.6, -8.5, -15.3, -19.1, -17.5, -14.1, -9.5, -4.0, -1.2, -1.0, 0.0, 0.0, -9.4, -0.1
    - Disbursements/purchases: 0.8, 1.7, 1.8, 0.9, 0.0, ...
    - Repayments/repurchases: -1.7, -5.3, -10.3, -16.1, -19.1, ...
  - Change in other gross official reserves (increase -): 26.1, -96.9, 50.6, -16.6, -7.8, 8.4, -7.4, -19.0, -36.0, -52.0, -57.2, -36.0, -42.2, -23.4, -40.6
  - Change in other foreign liabilities (increase +): 1.9, 1.6, 1.7, 1.8, 1.9, 2.0, 2.1, 2.2, 2.3, 2.4, 2.6, 3.4, 4.4, 2.1, 3.5
- Change in arrears (decrease -) 5/: -22.6, 1.3, -6.6, 0.0 thereafter
- Exceptional financing 6/: 29.1, 10.0, 0.0 thereafter; identified financing and financing need entries shown (including exceptional financing assumed 7/).
- Financing gap 8/: 0.0 across the projection horizon.
- Memorandum items (selected ratios and indicators):
  - Current account deficit (in percent of GDP) excluding official transfers: -19.2, -18.1, -21.9, -20.4, -19.4, -18.5, -17.7, -16.9, -16.0, -15.3, -14.8, -12.8, -9.7, -17.9, -12.3
  - Including official transfers: -7.8, -3.0, -9.0, -7.0, -7.2, -5.8, -5.6, -5.7, -5.4, -5.2, -5.1, -5.7, -4.9, -5.9, -5.5
  - External budgetary assistance to central government (in percent of GDP): 6.3, 12.2, 8.3, 9.8, 8.8, 7.7, 7.4, 6.7, 6.4, 6.1, 5.9, 4.1, 2.5, 7.9, 4.0
  - Gross official reserves (levels): 217.6, 314.5, 263.9, 280.5, 288.3, 279.9, 287.2, 306.2, 342.2, 394.2, 451.4, 666.5, 856.9, 320.8, 685.9
  - Gross official reserves (in months of imports of goods and services): 5.0, 5.8, 4.8, 4.8, 4.8, 4.4, 4.2, 4.2, 4.4, 4.8, 5.1, 5.6, 5.6, 4.7, 5.6
  - Overall balance (in percent of GDP): -2.0, 4.8, -2.9, 0.8, 0.6, -0.1, 0.4, 0.6, 1.0, 1.4, 1.4, 0.6, 0.5, 0.8, 0.7
- Sources: Rwandese authorities; and IMF staff estimates and projections.
- Notes:
  - 1/ Including interest due to the Fund.
  - 2/ Current transfers include budgetary and HIPC Initiative grants, and humanitarian and technical assistance.
  - 3/ Excluding the IMF.
  - 4/ Other capital includes long-term private capital, commercial credit, the change in the net foreign assets of commercial banks, and unrecorded imports.
  - 5/ Assumes clearance of all outstanding arrears in 2005.
  - 6/ Signed rescheduling and cancellation, as well as reschedulings expected to be signed with Paris Club creditors.
  - 7/ Includes assistance by multilateral and bilateral creditors under the enhanced HIPC Initiative (excluding multilateral HIPC grants). Further reflects impact of additional bilateral debt relief at the completion point as well as of assumed debt relief by Rwanda's non-Paris Club creditors.
  - 8/ The financing gap refers to the difference between the overall balance and the identified financing (actual and expected).

### Rwanda: Main macroeconomic assumptions and indicators used for the Debt Sustainability Analysis at the Completion Point (selected projections and averages)
- Economic growth and inflation:
  - Real GDP (percentage change): 2003: 0.9; 2004: 4.0; 2005: 4.0; 2006: 4.3; 2007: 4.5; 2008: 4.7; 2009: 4.9; 2010: 5.2; 2011: 5.5; 2012: 5.5; 2013: 5.5; 2015 onward: 5.5 (series continuing); averages: 2003–13: 4.4; 2014–23: 5.5
  - Real GDP (per capita): 2003: -1.9; 2004: 1.2; 2005: 1.2; 2006: 1.5; 2007: 1.7; 2008: 1.9; 2009: 2.1; 2010: 2.5; 2011: 2.7; 2012: 2.7; 2013: 2.7; averages: 2003–13: 1.7; 2014–23: 2.7
  - Average inflation (in percent): 2003: 7.4; 2004: 12.0; 2005: 7.0; 2006 onward: 4.0 (consistent through projections); averages 2003–13: 5.3; 2014–23: 4.0
- National accounts:
  - Gross domestic investment (percent of GDP): 2003: 18.4; 2004: 20.5; 2005: 21.0; 2006: 22.3; 2007: 22.3; 2008: 22.2; 2009: 22.3; 2010: 22.3; 2011: 22.6; 2012: 22.2; 2013: 21.9; 2015: 21.6; 2020: 21.0; 2021: 20.9; averages 2003–13: 21.7; 2014–23: 21.8
    - Private investment: 12.8, 12.0, 12.1, 12.2, 12.3, 12.4, 12.5, 12.6, 12.9, 13.2, 13.4, 13.6, 13.8, 13.9; averages 12.5, 13.4
    - Public investment: 5.6, 8.5, 8.9, 10.2, 10.0, 9.8, 9.8, 9.8, 9.7, 9.0, 8.5, 8.0, 7.2, 7.0; averages 9.2, 8.3
  - Gross domestic savings (percent of GDP): -0.8, 2.3, -1.3, 1.4, 2.2, 2.9, 3.5, 4.3, 6.2, 6.6, 7.1, 7.9, 8.6, 9.0; averages 2.9, 7.5
    - Private savings: -11.4, -11.0, -10.1, -9.7, -8.9, -8.4, -8.0, -7.3, -6.1, -5.0, -4.3, -3.6, -2.8, -2.5; averages -8.6, -4.1
    - Public savings: 10.6, 13.4, 8.8, 11.1, 11.1, 11.3, 11.5, 11.7, 12.3, 11.6, 11.4, 11.5, 11.3, 11.6; averages 11.4, 11.6
- Fiscal sector (percent of GDP):
  - Government revenue: 21.6, 25.9, 25.8, 26.2, 25.4, 27.1, 27.3, 27.2, 27.3, 25.5, 24.9, 24.3, 23.4, 23.2; averages 26.2, 24.8
  - Government expenditure and net lending: 23.9, 26.1, 26.7, 27.7, 27.3, 25.7, 25.8, 25.9, 26.0, 25.5, 25.0, 24.6, 23.8, 23.6; averages 26.1, 24.8
    - Current expenditure: 17.8, 16.0, 17.2, 17.0, 16.7, 16.7, 16.8, 16.8, 16.8, 16.8, 16.8, 16.9, 16.8, 16.9; averages 16.8, 16.9
    - Capital expenditure: 5.6, 8.5, 8.9, 10.2, 10.0, 8.5, 8.6, 8.6, 8.8, 8.2, 7.8, 7.4, 6.7, 6.4; averages 8.6, 7.6
  - Domestic fiscal balance (excluding demobilization): -4.7, -5.3, -4.5, -5.9, -5.9, -4.2, -4.0, -3.5, -3.1, -2.3, -1.8, -1.3, -0.7, -0.6; averages -4.3, -1.7
  - Overall balance (before grants): -10.3, -12.2, -12.7, -13.6, -13.0, -11.2, -11.2, -10.9, -10.6, -9.6, -8.9, -8.1, -7.0, -6.6; averages -11.6, -8.6
- Balance of payments (selected percent-of-GDP items):
  - Exports of goods and services: 8.3, 10.3, 9.2, 9.3, 9.4, 9.7, 10.0, 10.5, 11.4, 11.4, 11.4, 11.6, 11.7, 11.8; averages 10.0, 11.5
    - goods: 3.7, 5.3, 4.3, 4.3, 4.3, 4.5, 4.7, 5.0, 5.7, 5.6, 5.5, 5.5, 5.5, 5.6; averages 4.8, 5.5
    - services: 4.5, 5.0, 4.9, 4.9, 5.1, 5.2, 5.3, 5.5, 5.7, 5.8, 5.9, 6.0, 6.2, 6.2; averages 5.2, 6.0
  - Imports of goods and services: 27.6, 28.5, 31.5, 30.2, 29.5, 28.3, 28.1, 27.9, 27.3, 26.6, 25.8, 24.9, 23.8, 23.4; averages 28.5, 25.4
  - Trade balance: -19.3, -18.2, -22.3, -20.9, -20.1, -18.6, -18.1, -17.4, -15.9, -15.2, -14.4, -13.4, -12.1, -11.5; averages -18.5, -13.9
  - Current account balance (excl. grants for budget assistance): -19.2, -18.1, -21.9, -20.4, -19.4, -17.8, -17.1, -16.3, -14.4, -13.3, -12.4, -11.3, -10.0, -9.4; averages -17.7, -11.9
  - Current account balance (incl. grants for budget assistance): -7.8, -3.0, -9.0, -7.0, -7.2, -5.1, -5.0, -5.1, -4.7, -5.2, -5.4, -5.2, -4.9, -4.6; averages -5.8, -5.1
  - Gross official reserves (in months of imports): 5.0, 5.8, 4.8, 4.8, 4.8, 4.4, 4.2, 4.2, 5.1, 5.6, 5.6, 5.6, 5.6, 5.6; averages 4.7, 5.6
- Sources: Rwandese authorities; and IDA and IMF staff estimates and projections.

*Source: _cr05173 - 12.73 million at the SDR/US$ exchange rate of 0.649786 on March 11, 2005.*

### 1. NPV of total debt (2+5) 3/

### _cr05173 - 1. NPV of total debt (2+5) 3/

### I. After traditional debt-relief mechanisms
- 1. NPV of total debt (2+5) 3/
  - 942.3
  - 995.7
  - 1,020.0
  - 1,051.2
  - 1,081.4
  - 1,084.9
  - 1,089.3
  - 1,098.3
  - 1,111.8
  - 1,126.6
  - 1,136.7
  - 1,179.1
  - 1,356.7
  - 1,401.6
  - 1,45
  - 0.4
  - 1,502.4
  - 1,067.1
  - 1,308.2
- 2. NPV of outstanding debt (3+4)
  - 942.3
  - 938.3
  - 928.0
  - 909.6
  - 887.6
  - 864.9
  - 842.6
  - 824.3
  - 809.4
  - 795.0
  - 778.6
  - 743.7
  - 629.5
  - 601.6
  - 572.5
  - 541.3
  - 865.5
  - 661.9
- 3. Official bilateral and commercial
  - 67.8
  - 68.8
  - 69.8
  - 70.9
  - 72.0
  - 73.1
  - 74.3
  - 75.5
  - 76.8
  - 78.2
  - 79.5
  - 82.5
  - 89.3
  - 89.6
  - 89.6
  - 89.6
  - 73.3
  - 86.7
  - Paris Club
    - 26.1
    - 26.3
    - 26.5
    - 26.8
    - 27.0
    - 27.2
    - 27.5
    - 27.7
    - 28.0
    - 28.2
    - 28.5
    - 29.1
    - 30.2
    - 30.1
    - 29.9
    - 29.7
    - 27.3
    - 29.7
  - Other official bilateral and commercial
    - 41.7
    - 42.5
    - 43.3
    - 44.1
    - 45.0
    - 45.9
    - 46.8
    - 47.8
    - 48.9
    - 49.9
    - 51.0
    - 53.4
    - 59.1
    - 59.5
    - 59.7
    - 59.9
    - 46.1
    - 57.0
- 4. Multilateral
  - 874.5
  - 869.5
  - 858.2
  - 838.7
  - 815.7
  - 791.7
  - 768.3
  - 748.8
  - 732.6
  - 716.8
  - 699.1
  - 661.3
  - 540.2
  - 512.1
  - 482.9
  - 451.7
  - 792.2
  - 575.2
  - Of which IDA
    - 539.5
    - 541.7
    - 542.6
    - 541.8
    - 540.2
    - 536.9
    - 531.5
    - 525.2
    - 516.6
    - 506.2
    - 494.0
    - 467.1
    - 379.5
    - 358.2
    - 336.1
    - 312.2
    - 528.7
    - 404.4
  - Of which IMF
    - 78.6
    - 76.1
    - 69.0
    - 56.0
    - 39.7
    - 24.3
    - 11.8
    - 3.4
    - 0.4
    - 0.1
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 32.7
    - 0.0
  - Of which African Development Bank Group
    - 159.0
    - 157.4
    - 155.7
    - 154.3
    - 152.6
    - 150.3
    - 147.5
    - 144.9
    - 142.1
    - 138.8
    - 135.3
    - 128.2
    - 103.6
    - 98.6
    - 93.4
    - 88.1
    - 148.9
    - 111.1

### II. After enhanced HIPC assistance
- 1. NPV of total debt (2+5) 3/
  - 964.9
  - 1,046.6
  - 567.2
  - 620.5
  - 672.4
  - 693.9
  - 717.6
  - 744.5
  - 774.7
  - 807.7
  - 837.7
  - 924.2
  - 1,226.6
  - 1,276.7
  - 1,331.1
  - 1,389.0
  - 768.0
  - 1,1
  - 27.8
- NPV of total debt after full delivery 5/
  - 467.1
  - 526.8
  - 567.2
  - 620.5
  - 672.4
  - 693.9
  - 717.6
  - 744.5
  - 774.7
  - 807.7
  - 837.7
  - 924.2
  - 1,226.6
  - 1,276.7
  - 1,331.1
  - 1,389.
  - 0
  - 675.5
  - 1,127.8
- 2. NPV of outstanding debt (3+4)
  - 964.9
  - 989.2
  - 475.2
  - 479.0
  - 478.6
  - 473.9
  - 470.9
  - 470.5
  - 472.3
  - 476.1
  - 479.7
  - 488.9
  - 499.5
  - 476.7
  - 453.2
  - 427.9
  - 566.4
  - 481.5
- 3. Official bilateral and commercial
  - 137.6
  - 139.4
  - 25.0
  - 23.9
  - 22.8
  - 21.6
  - 20.3
  - 19.0
  - 17.7
  - 17.0
  - 17.2
  - 17.9
  - 20.1
  - 20.4
  - 20.5
  - 20.6
  - 42.0
  - 19.3
  - Paris Club
    - 71.3
    - 72.3
    - 8.6
    - 8.6
    - 8.6
    - 8.7
    - 8.8
    - 8.8
    - 8.9
    - 8.9
    - 9.0
    - 9.1
    - 9.5
    - 9.6
    - 9.5
    - 9.5
    - 20.2
    - 9.4
  - Other official bilateral and commercial
    - 66.3
    - 67.1
    - 16.4
    - 15.3
    - 14.1
    - 12.9
    - 11.6
    - 10.2
    - 8.8
    - 8.1
    - 8.2
    - 8.8
    - 10.5
    - 10.8
    - 11.0
    - 11.1
    - 21.7
    - 9.9
- 4. Multilateral
  - 827.3
  - 849.8
  - 450.2
  - 455.1
  - 455.8
  - 452.4
  - 450.6
  - 451.5
  - 454.6
  - 459.0
  - 462.5
  - 471.0
  - 479.4
  - 456.3
  - 432.7
  - 407.3
  - 524.4
  - 462.2
  - Of which IDA
    - 521.1
    - 538.1
    - 304.8
    - 312.1
    - 319.6
    - 326.4
    - 332.2
    - 338.1
    - 343.3
    - 348.3
    - 352.3
    - 360.7
    - 379.5
    - 358.2
    - 336.1
    - 312.2
    - 366.9
    - 358.9
  - Of which IMF
    - 72.0
    - 74.0
    - 37.5
    - 34.7
    - 27.6
    - 17.1
    - 9.3
    - 3.4
    - 0.4
    - 0.1
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 25.1
    - 0.0
  - Of which African Development Bank Group
    - 151.1
    - 154.7
    - 78.5
    - 79.1
    - 79.7
    - 80.2
    - 80.5
    - 80.9
    - 81.2
    - 81.4
    - 81.4
    - 81.6
    - 78.0
    - 77.8
    - 77.6
    - 77.5
    - 93.5
    - 79.4

### III. After bilateral debt relief beyond HIPC assistance 4/
- 1. NPV of total debt (2+5) 3/
  - 964.9
  - 1,046.6
  - 558.6
  - 611.9
  - 663.7
  - 685.2
  - 708.8
  - 735.7
  - 765.8
  - 798.7
  - 828.7
  - 915.1
  - 1,217.1
  - 1,267.1
  - 1,321.5
  - 1,379.6
  - 760.8
  - 1,1
  - 18.4
- NPV of total debt after full delivery 5/
  - 457.7
  - 518.1
  - 558.6
  - 611.9
  - 663.7
  - 685.2
  - 708.8
  - 735.7
  - 765.8
  - 798.7
  - 828.7
  - 915.1
  - 1,217.1
  - 1,267.1
  - 1,321.5
  - 1,379.
  - 6
  - 666.6
  - 1,118.4
- 2. NPV of outstanding debt (3+4)
  - 964.9
  - 989.2
  - 466.6
  - 470.4
  - 470.0
  - 465.2
  - 462.2
  - 461.7
  - 463.4
  - 467.1
  - 470.7
  - 479.7
  - 489.9
  - 467.1
  - 443.7
  - 418.4
  - 559.2
  - 472.1
- 3. Official bilateral and commercial
  - 137.6
  - 139.4
  - 16.4
  - 15.3
  - 14.1
  - 12.9
  - 11.6
  - 10.2
  - 8.8
  - 8.1
  - 8.2
  - 8.8
  - 10.5
  - 10.8
  - 11.0
  - 11.1
  - 34.8
  - 9.9
  - Paris Club
    - 71.3
    - 72.3
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 13.1
    - 0.0
  - Other official bilateral and commercial
    - 66.3
    - 67.1
    - 16.4
    - 15.3
    - 14.1
    - 12.9
    - 11.6
    - 10.2
    - 8.8
    - 8.1
    - 8.2
    - 8.8
    - 10.5
    - 10.8
    - 11.0
    - 11.1
    - 21.7
    - 9.9
- 4. Multilateral
  - 827.3
  - 849.8
  - 450.2
  - 455.1
  - 455.8
  - 452.4
  - 450.6
  - 451.5
  - 454.6
  - 459.0
  - 462.5
  - 471.0
  - 479.4
  - 456.3
  - 432.7
  - 407.3
  - 524.4
  - 462.2

### IV. After Topping-Up of Assistance at the Completion Point
- 1. NPV of total debt (2+5) 3/
  - 964.9
  - 1,046.6
  - 308.2
  - 358.0
  - 409.8
  - 435.4
  - 461.6
  - 491.1
  - 518.7
  - 550.2
  - 579.6
  - 663.9
  - 975.4
  - 1,052.6
  - 1,135.0
  - 1,222.9
  - 556.7
  - 889.0
- NPV of total debt after full delivery 5/
  - 219.2
  - 269.6
  - 308.2
  - 358.0
  - 409.8
  - 435.4
  - 461.6
  - 491.1
  - 518.7
  - 550.2
  - 579.6
  - 663.9
  - 975.4
  - 1,052.6
  - 1,135.0
  - 1,222.9
  - 4
  - 18.3
  - 889.0
- 2. NPV of outstanding debt (3+4)
  - 964.9
  - 989.2
  - 216.2
  - 216.4
  - 216.1
  - 215.4
  - 214.9
  - 217.1
  - 216.4
  - 218.6
  - 221.6
  - 228.6
  - 248.2
  - 252.6
  - 257.1
  - 261.7
  - 355.2
  - 242.7
- 3. Official bilateral and commercial
  - 137.6
  - 139.4
  - 7.2
  - 6.7
  - 6.1
  - 5.6
  - 4.9
  - 4.3
  - 3.6
  - 3.3
  - 3.3
  - 3.6
  - 4.4
  - 4.5
  - 4.6
  - 4.6
  - 29.3
  - 4.1
  - Paris Club
    - 71.3
    - 72.3
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 13.1
    - 0.0
  - Other official bilateral and commercial
    - 66.3
    - 67.1
    - 7.2
    - 6.7
    - 6.1
    - 5.6
    - 4.9
    - 4.3
    - 3.6
    - 3.3
    - 3.3
    - 3.6
    - 4.4
    - 4.5
    - 4.6
    - 4.6
    - 16.2
    - 4.1
- 4. Multilateral
  - 827.3
  - 849.8
  - 208.9
  - 209.7
  - 209.9
  - 209.8
  - 210.0
  - 212.8
  - 212.7
  - 215.3
  - 218.2
  - 225.0
  - 243.9
  - 248.1
  - 252.5
  - 257.1
  - 325.9
  - 238.6
  - Of which IDA
    - 521.1
    - 538.1
    - 142.3
    - 145.9
    - 149.5
    - 153.1
    - 156.7
    - 160.5
    - 164.1
    - 167.8
    - 171.5
    - 179.3
    - 200.9
    - 205.6
    - 210.5
    - 215.5
    - 224.6
    - 194.7
  - Of which IMF
    - 72.0
    - 74.0
    - 14.6
    - 12.3
    - 9.4
    - 6.4
    - 3.7
    - 3.4
    - 0.4
    - 0.1
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 0.0
    - 17.9
    - 0.0
  - Of which African Development Bank Group
    - 151.1
    - 154.7
    - 38.5
    - 38.1
    - 37.6
    - 37.0
    - 36.3
    - 35.6
    - 35.0
    - 34.2
    - 33.6
    - 32.7
    - 29.2
    - 28.5
    - 27.8
    - 27.1
    - 57.4
    - 30.3

### Memorandum items
- 5. NPV of new borrowing
  - 0.0
  - 57.4
  - 92.0
  - 141.5
  - 193.8
  - 220.0
  - 246.7
  - 274.0
  - 302.3
  - 331.6
  - 358.0
  - 435.3
  - 727.2
  - 800.0
  - 877.9
  - 961.1
  - 201.6
  - 646.3
- Sources: Rwandese authorities; and IDA and IMF staff estimates and projections.

*Sources: Rwandese authorities; and IDA and IMF staff estimates and projections.*

### 8. Nominal assistance from topping-up 6/

### 8. Nominal assistance from topping-up 6/

### Summary of external debt indicators (selected series)
- I. After traditional debt-relief mechanisms (NPV ratios)
  - NPV of debt-to-GDP ratio: 56.0 (2003); 20.2 (2023); Averages: 43.3 (2003-2013), 24.5 (2014-2023)
  - NPV of debt-to-exports ratio: 658.6 (2003); 184.8 (2013); 184.8 is intermediate; Averages: 482.5 (2003-2013), 229.9 (2014-2023)
  - NPV of debt-to-revenue ratio: 414.1 (2003); 118.9 (2023); Averages: 301.1 (2003-2013), 151.5 (2014-2023)
  - Debt service-to-exports ratio (selected): 25.4 (2003); 10.2 (2023); Averages: 23.3 (2003-2013), 12.5 (2014-2023)
  - Debt service-to-revenue ratio (selected): 18.8 (2003); 7.1 (2023); Averages: 16.0 (2003-2013), 8.8 (2014-2023)

- II. After enhanced HIPC assistance (after full delivery in 2003)
  - NPV of debt-to-GDP ratio: 27.7 (2003); 18.7 (2023); Averages: 26.7 (2003-2013), 20.8 (2014-2023)
  - NPV of debt-to-exports ratio (after full delivery in 2003): 326.5 (2003); 170.9 (2023); Averages: 294.9 (2003-2013), 195.4 (2014-2023)
  - NPV of debt-to-revenue ratio (after full delivery in 2003): 205.3 (2003); 109.9 (2023); Averages: 184.5 (2003-2013), 128.6 (2014-2023)
  - Debt service-to-exports ratio (selected): 9.8 (2005); 8.5 (2023); Averages: 7.5 (2014-2023) noted in table
  - Debt service-to-revenue ratio (selected): 7.3 (2005); 5.9 (2023); Averages: 5.3 (2014-2023)

- III. After bilateral debt relief beyond HIPC assistance (after full delivery in 2003)
  - NPV of debt-to-GDP ratio: 27.2 (2003); 18.5 (2023); Averages: 26.3 (2003-2013), 20.7 (2014-2023)
  - NPV of debt-to-exports ratio (after full delivery in 2003): 319.9 (2003); 169.7 (2023); Averages: 290.8 (2003-2013), 193.7 (2014-2023)
  - NPV of debt-to-revenue ratio (after full delivery in 2003): 201.2 (2003); 109.1 (2023); Averages: 181.9 (2003-2013), 127.5 (2014-2023)
  - Debt service-to-exports ratio (selected): 9.8 (2005); 8.4 (2023); Averages: 7.4 (2014-2023)
  - Debt service-to-revenue ratio (selected): 7.3 (2005); 5.8 (2023); Averages: 5.3 (2014-2023)

- IV. After Topping-Up of Assistance at the Completion Point (after full delivery in 2005)
  - NPV of debt-to-GDP ratio: 13.0 (2003); 16.4 (2022); 16.4 (2023); Averages: 16.1 (2003-2013), 16.2 (2014-2023)
  - NPV of debt-to-exports ratio (after full delivery in 2005): 150.0 (2003); 150.4 (2023); Averages: 176.6 (2003-2013), 151.7 (2014-2023)
  - NPV of debt-to-exports ratio (existing debt at end-2003 only): 125.3 (2005 row context); 32.2 (2023); Averages: 192.7 (2003-2013), 43.0 (2014-2023)
  - NPV of debt-to-revenue ratio (after full delivery in 2005): 96.3 (2003); 96.7 (2023); Averages: 110.9 (2003-2013), 99.7 (2014-2023)
  - Debt service-to-exports ratio (selected): 9.8 (2005); 4.6 (2023); Averages: 5.1 (2003-2013), 4.6 (2014-2023)
  - Debt service-to-revenue ratio (selected): 7.3 (2005); 3.3 (2023); Averages: 3.5 (2003-2013), 3.3 (2014-2023)

### Memorandum items (selected levels in millions of U.S. dollars)
- Unconditional NPV of debt after enhanced HIPC assistance:
  - Series: 467.1; 526.8; 567.2; 620.5; 672.4; 693.9; 717.6; 744.5; 774.7; 807.7; 837.7; 924.2; 1226.6; 1276.7; 1331.1; 1389.0
  - Averages: 675.5 (2003-2013), 1127.8 (2014-2023)
- Of which: existing debt at end-2003 only:
  - Series: 467.1; 469.4; 475.2; 479.0; 478.6; 473.9; 470.9; 470.5; 472.3; 476.1; 479.7; 488.9; 499.5; 476.7; 453.2; 427.9
  - Averages: 473.9 (2003-2013), 481.5 (2014-2023)
- Debt service after enhanced HIPC assistance (selected): 18.5; 15.3; 18.0; 23.1; 27.7; 26.1; 24.0; 22.5; 21.0; 25.2; 30.3; 46.7; 72.6; 74.6; 77.7
  - Averages: 22.1 (2003-2013), 48.7 (2014-2023)

- GDP (millions USD): 1,684 (2003); 1,835 (2004); 2,057 (2005); 2,209 (2006); 2,353 (2007); 2,512 (2008); 2,686 (2009); 2,882 (2010); 3,101 (2011); 3,335 (2012); 3,588 (2013); 4,151 (2014); 5,979 (2015); 6,431 (2020); 6,918 (2021); 7,442 (2023)
  - Averages: 2567.5 (2003-2013), 5477.5 (2014-2023)

- Exports of goods and services (annual, millions USD): 139 (2003); 189 (2004); 189 (2005); 204 (2006); 221 (2007); 243 (2008); 269 (2009); 301 (2010); 339 (2011); 375 (2012); 408 (2013); 473 (2015); 691 (2020); 747 (2021); 810 (2022); 882 (2023)
  - Three-year moving average (selected): 143 (2003); 154 (2004); 172 (2005); 194 (2006); 205 (2007); 223 (2008); 244 (2009); 271 (2010); 303 (2011); 339 (2012); 374 (2013); 440 (2014); 639 (2015); 691 (2020); 749 (2021); 813 (2023)
  - Averages: 261.7 (2003-2013), 632.0 (2014-2023)

- Government revenue (millions USD): 228 (2003); 255 (2004); 288 (2005); 310 (2006); 336 (2007); 364 (2008); 394 (2009); 432 (2010); 469 (2011); 509 (2012); 553 (2013); 651 (2015); 985 (2020); 1,070 (2021); 1,163 (2022); 1,264 (2023)
  - Averages: 376.2 (2003-2013), 894.9 (2014-2023)

### Sensitivity analysis (selected highlights)
- Baseline scenario (NPV of debt-to-exports ratio): 320 (2003); 170 (2023); Averages: 291 (2003-2013), 194 (2014-2023)
- Baseline scenario (NPV of debt in millions USD, selected): 458 (2003); rising to 1,380 (2023); Averages: 667 (2003-2013), 1,118 (2014-2023)
- Alternative scenario I (assumptions): 25 percent drop in export prices and a 10 percent increase in import prices relative to the baseline in 2005; export volume growth reduced by 2 percentage points over 2005-07.
  - NPV of debt-to-exports ratio under Scenario I: 320 (2003); 218 (2023); Averages: 332 (2003-2013), 245 (2014-2023)
- Alternative scenario II (assumptions): fall in the grant share of total external assistance from 83 percent to 55 percent over 2005-2023; reduction used to reduce government's financing requirement, with a 17 percent share falling on loans.
  - NPV of debt-to-exports ratio under Scenario II: 320 (2003); 354 (2023); Averages: 369 (2003-2013), 383 (2014-2023)
- Alternative scenario III (assumptions): increase in GDP growth by 1.5 percent over the baseline; export and import volumes, central government revenues and expenditures adjust; savings from improved revenue performance assumed to be used to reduce the government's financing requirement.
  - NPV of debt-to-exports ratio under Scenario III: 320 (2003); 134 (2023); Averages: 284 (2003-2013), 169 (2014-2023)

### Enhanced HIPC assistance, topping-up calculations (selected)
- End-1999 (Decision Point) key numbers:
  - NPV of debt (end-1999 basis): 634.2; Assistance as approved at the Decision Point: 121.2; NPV after assistance: 452.4; NPV of debt-to-exports ratio cited: 181.8; Common Reduction Factor: 150.0 (in percent) and 71.3 (percent) shown in table context.
- End-2003 Completion point estimates and topping-up:
  - NPV after enhanced HIPC assistance: 467.1; Three-year exports moving average: 143.1; NPV after assistance: 326.5
  - NPV after bilateral debt relief beyond HIPC: 457.7; Three-year exports moving average: 143.1; NPV after bilateral relief: 319.9
- Calculation of possible topping-up assistance (selected lines):
  - Total NPV after bilateral debt relief beyond HIPC: 457.7; Three-year exports moving average: 143.1; NPV of assistance items shown: 243.1; 214.6; 150.0; 53.1
  - Multilateral portion: 441.5; 234.5; 207.0
  - Bilateral portion: 16.2; 8.6; 7.6

*Sources: Rwandese authorities; and IDA and IMF staff estimates and projections.*

### 1.      The responsibility for public debt management is shared among different

### 1.      The responsibility for public debt management is shared among different bodies within the government of Rwanda

### Policy coordination and debt strategy
- Institutional responsibilities
  - Public Debt Division (DPP) at the Ministry of Finance (MINECOFIN) maintains the debt database and is responsible for ensuring the servicing of external obligations.
  - Actual payments are made by the “Département de l’inspection du change et balance de paiements” at the National Bank of Rwanda (NBR).
  - Other MINECOFIN divisions negotiate and contract public external debt and grant public guarantees.
  - Central Projects and External Finance Bureau (CEPEX) coordinates external financing activities by line ministries, by sector priority, and by donor.
- Coordination body and weaknesses
  - The "Sous-comité de gestion de la dette" coordinates among agencies but lacks a legal mandate and holds irregular meetings.
  - Recommendation: empower the Committee with an explicit and clear legal mandate. Suggested mandate elements include:
    - coordination of debt management activities;
    - establishment of a channel for a regular and reliable flow of information;
    - formulation and follow up of the country's debt strategy;
    - periodical analysis of the debt management framework and proposals for its improvement;
    - technical analysis of new borrowing proposals, including a recommendation to the Minister of Finance;
    - elaboration of a disclosure policy to enhance accountability and public disclosure of debt policy and results.
- Borrowing decisions and concessionality requirement
  - Main responsibility for decisions regarding new borrowing rests with MINECOFIN; contracting of new loans and granting of guarantees is subject to parliamentary approval.
  - Evaluations focus on compliance with the concessionality requirements set out in the PRGF arrangement: new borrowing is strictly limited to loans with a grant element of 50 percent or more. This policy applies to central government, local governments, and the NBR.
  - Finding: decisions on new borrowing only to a lesser extent take into account medium- and long-term macroeconomic impacts.

### Data recording and reporting
- Dual data recording and coverage differences
  - Two institutions record debt data: DDP at MINECOFIN records external central government debt; NBR records debt with more comprehensive coverage (domestic debt is solely recorded at the NBR).
  - NBR maintains a database on public enterprise and publicly guaranteed external private debt via a regular questionnaire.
- Systems, archiving, and reconciliation issues
  - Only MINECOFIN uses UNCTAD’s DMFAS 5.2 (DMFAS first installed in 1990; last update to version 5.2 took place in November 2000). Many trained staff have left the ministry since.
  - NBR maintains its own database in an excel environment. An interface between MINECOFIN and NBR databases is lacking; reconciliation is time intensive and carried out irregularly, mainly via informal staff efforts.
  - Weak archiving practices hinder reconciliation.
  - Consequence: inconsistencies between datasets have led, and could lead, to discrepancies between debt data in the budget (from DDP) and in the balance of payments (from NBR).
- Recommendations to enhance data quality
  - Improve access to debt documentation.
  - Install a networked debt recording software and establish an interface between MINECOFIN and NBR systems.
  - Strengthen archiving practices and formalize reconciliation procedures to ensure consistency across government publications.
  - Elaborate a disclosure policy to place stronger emphasis on public disclosure of debt management policies and reports.

### Analytical capacity and staffing
- Capacity gaps and training
  - Need to build staff capacity across loan agreement interpretation, creditor reports, use of debt recording systems, and formulation of DSAs.
  - Some training provided by Debt Relief International and UNCTAD; awareness of debt restructuring options and sustainability issues is limited to a few individuals.
  - Recommendation: further technical assistance to diffuse debt management skills and integrate debt simulations with macroeconomic projections.
- Staffing shortfall
  - DDP staffing fell from 8 staff in 1998 to 3 in 2004.
  - Finding: number of staff with sufficient training to carry out basic debt management functions seems inadequate.
  - Recommendation: attract and retain skilled personnel for the debt management team.

### Debt Sustainability Analysis for Low-Income Countries (LIC) Framework — Rwanda summary and key projections
- Methodology note
  - LIC framework projections assume full delivery of HIPC assistance and additional bilateral debt relief unless otherwise indicated.
- Baseline results and risk assessment
  - End-2003 NPV of public and publicly guaranteed (PPG) external debt (after full HIPC and additional bilateral relief) is estimated at US$398 million, equivalent to 286 percent of exports.
  - Under the baseline:
    - NPV of debt-to-exports ratio projected to increase and peak at 267 percent in 2007, then fall gradually to reach 137 percent by 2024.
    - NPV of external debt-to-GDP ratio: 24 percent at end-2003, increases to 25 percent by end-2007, then decreases gradually to about 16 percent by the end of the analysis period.
    - External debt service was about 11 percent of export revenue in 2003, decreases gradually to levels around 6 to 7 percent until 2020, after which it increases sharply above 9 percent as concessional debt matures and HIPC debt service reduction is exhausted.
  - Overall assessment: baseline signals a high risk of debt distress despite low liquidity indicators; exports-based stock indicator remains high.
- Scenarios and sensitivity
  - Historical scenario (main parameters remain at ten-year historical averages) shows significant deterioration relative to baseline: by end of projection period debt service-to-exports would reach 61 percent (more than six times the baseline projection).
  - Stress tests: debt indicators deteriorate considerably under most LIC stress tests. Notably, if main parameters are one-half standard deviation below historical averages during 2005–06 (25 percent probability), debt service-to-exports ratio is projected to be twice as high by 2014 as in the baseline.
- Policy implications and recommendations
  - Call for increased reliance on grant financing and prudent new borrowing only on highly concessional terms.
  - Donors and creditors need to coordinate to ensure external financing terms compatible with long-term debt sustainability.
  - Government should swiftly implement its export promotion strategy to strengthen repayment capacity and reduce vulnerability to shocks.
- Box 1 — decomposition of change in the end-2003 NPV debt-to-exports ratio using LIC vs HIPC methodologies
  - LIC framework end-2003 NPV of debt-to-exports ratio: 286 percent (285.6 reported).
  - HIPC methodology result: 320 percent (319.9 reported).
  - Net change: -34.3 percentage points, decomposed as:
    - Exchange rates: -3.2 percentage points
    - Discount rates: -38.3 percentage points
    - Exports denominator change: +7.2 percentage points

*Source: IMF staff report content provided in the supplied document.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05173.pdf_