Macroeconomic Policy
Macroeconomic Management
Public debt policy
Tax policy
Rwanda-Investors Presentations
Regional Economic Integration
Relations with international financial institutions
External Finance


Purpose of the function

Formulation and monitoring of macroeconomic policies, including issues relating to analysis and projections of the four core macroeconomic sectors, real sector, fiscal sector, monetary sector, and external sector. Subsequent policies such as debt policy, regional integration and others relevant also constitute an important part of the process. The Macroeconomic framework is a consistent set of overall economic policies and objectives defined in the EDPRS and in the Vision 2020.

Description of the function

The function revolves around the four sectors of the economy: the real sector, the fiscal sector, the monetary and financial sector, and the external sector.

real sector

The real sector deals with the total output (composed by agriculture, industry and services sectors), the Consumer Price Index (CPI) and the Producer Price Index (PPI). The real sector attempts to explain changes in these aggregates and to guide policymakers in their pursuit of economic objectives and efforts to respond to unanticipated changes in the economic environment. Both the analysis of events and the design of appropriate policies require accurate economic information and statistics that are made available in a systematic and timely fashion. GDP projections are discussed with NISR and BNR for accuracy and consistency.

fiscal sector (fiscal policy)

The role of macroeconomic Unit is to analyze the implications of public expenditure as public expenditure affects both aggregate supply (and production) and aggregate demand (or Spending). All this analysis helps government to provide with an appropriate Tax policy or public spending orientation and a better budget allocation among sectors or government institutions.

The government transactions are compiled in consolidated tables called “Government operations Table” following Government Statistics standard Format (GFS) on a cash basis. Receipts and payments recorded on a cash basis are documented as of the time of monetary settlement. Recording government transactions on a cash basis provides analysts with a basis for comparison with the monetary accounts and thus makes measuring the impact of government operations on the monetary aggregates easier. Government operations table describes the fiscal program and policy in a short run (3 years) and it is revised every fiscal year along with the update of the macroeconomic framework and during the budget process. The process of developing this table can be summarized trough tree main components:

•Total domestic revenue (Tax and Nontax revenues); revenues include all non-repayable receipts except grants. Tax collection is performed by RRA. The macroeconomic Unit assesses revenue developments and performance by focusing on revenues as proportion of GDP in light of revenues to GDP ratios in comparable economies and set targets. When fiscal deficit need to be reduced, the economic cost of raising taxes is weighted against the costs of reducing public spending;

•Total Grants: are unrequited receipts from bilateral donors and multilateral institutions. The projection of grants is made on development partner’s commitments basis;

•Expenditure and net lending: public expenditure represents the cost of the government’s activities which involve the provision of Wages and salaries, goods and services, interest payments and transfers and subsidies and capital expenditures. Ministries and districts budgets are the source of data for expenditure through Budget law;

•Financing: a portion of expenditures and net lending that exceeds receipts from revenue and grants create a deficit which needs to be financed. Thus, Financing is a residual derived of fiscal revenues and Expenditures. We distinguish two source of Financing.  Foreign (external) financing and Domestic financing from bank and non-bank sector. Foreign financing is consistent with the balance of Payments and it includes new borrowing on external debt while banking sector domestic financing is consistent with the monetary statistics in the central bank’s balance sheet.

Monetary and financial sector

The macroeconomic policy unit only provides inputs to monetary policy pertaining to fiscal policy. Monetary policy is exclusively under the control of the central bank (BNR).

External sector

The external sector has to do with the balance of payments. The Balance of payment is produced by the National Bank of Rwanda which is also the main source for BOP data. BOP projections are used to inform the tree other sectors in the framework (the fiscal sector, the real sector and the monetary sector). The macro policy unit liaises with the statistical department in National Bank of Rwanda, and also with line ministries, in order to ensure that required BOP data are available for the ongoing economic assessments and reports in a timely manner.

Related Documents

2013_15 Consolidated General Government Finance Statistics

Rwanda Institutional table structure 2014_15

Updated MacroFramework Public Dataset - June 2016

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