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Rwanda says aid freeze over Congo revolt may dent growth

by Reuters
Wednesday, 5 December 2012 16:29 GMT

* Says may cut GDP growth forecast to 6 pct from 7.6 pct

* Finmin says two thirds of budget support delayed, frozen

* Rwanda widely believed to be backing rebels in eastern DRC (Adds details, background)

By Jenny Clover

KIGALI, Dec 5 (Reuters) - Rwanda may have to cut its 2013 economic growth forecast, its finance minister said, if ${esc.dollar}240 million in international aid remains delayed or suspended over allegations it backed rebels in eastern Congo.

However, Finance Minister John Rwangombwa said on Wednesday Rwanda would receive aid contributions worth a total ${esc.dollar}165 million from the World Bank and African Development Bank (AfDB) for the fiscal year that ends next June 30.

Rwanda has repeatedly rejected allegations made by U.N. experts that senior Kigali officials have created, equipped, trained and directly commanded the M23 rebel movement which last month briefly seized the eastern Congolese city of Goma.

Donors have already disbursed ${esc.dollar}122 million of the total ${esc.dollar}362 million they originally pledged to Rwanda.

Rwangombwa said that if the remainder, amounting to about 11 percent of the country's budget, was withheld, Rwanda might have to revise its economic growth forecast down to 6 percent from 7.6 percent.

"(That) won't create havoc here. We are not on fire," Rwangombwa told a conference in the Rwandan capital, Kigali.

The minister said 6 percent growth was still strong by international standards.

"But our ambition and our programme is aiming at more than 8 percent growth, so it's delaying our mission of achieving high development," Rwangombwa said. (Writing by Richard Lough; Editing by Ruth Pitchford)

Our Standards: The Thomson Reuters Trust Principles.

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