Kigali - October 22, 2024

Rwanda’s economic growth momentum continues to show resilience despite a challenging external environment, according to the International Monetary Fund (IMF) team at the conclusion of its two-week mission.

The IMF team visited Rwanda to discuss policies, priorities, and progress on reforms as part of the fourth review of the country’s Policy Coordination Instrument (PCI), Resilience Sustainability Facility (RSF), and the second review of the Standby Credit Facility (SCF) arrangement.

In a statement released at the end of the mission by Mr. Ruben Atoyan, the IMF team leader, Rwanda’s Real GDP is projected to grow by 8.3% in 2024. This growth is driven by strong performances in the services and construction sectors, along with a recovery in food crop production. Inflation remains stable within the central bank’s target range, thanks to appropriately tight monetary policy and favorable food price developments. Mr. Atoyan highlighted that the 6.6% depreciation of the Rwandan Franc against the US dollar was a necessary measure for facilitating essential external adjustments, while international reserves stood at 4.5 months of prospective imports by mid-2024, providing a buffer against external shocks.

“Despite the challenging environment, macroeconomic policy performance through the end of June 2024 remained aligned with program objectives under the PCI/SCF arrangement. All quantitative targets were met, and reforms aimed at enhancing the transparency of public investments and strengthening foreign exchange market functioning are progressing well,” Mr. Atoyan stated.

He emphasized the Government’s strong commitment to implementing climate-related reforms under the RSF arrangement, with measures for climate budget tagging, improving the climate resilience of public investments, adopting sustainability disclosure standards, and developing a green taxonomy on track for completion in the coming weeks.

The IMF team acknowledged that recurrent shocks in recent years have complicated the Government’s goal of rebuilding policy buffers. Fiscal consolidation has progressed more slowly than anticipated, resulting in a continued increase in the public debt-to-GDP ratio.

Given the above-described shocks the government reiterated to the IMF team its commitment to a prudent strategy focused on concessional financing, while advancing a medium-term revenue strategy and associated compensatory measures. Efforts to strengthen oversight of state owned enterprises fiscal risks and improve corporate governance will also continue to progress.

Following the completion of the review by the IMF Executive Board in mid-December, Rwanda is set to receive US$ 95.9 million under the RSF and US$ 89.0 million under the SCF.

Links:

The Resilience and Sustainability Facility (RSF)

The Policy Coordination Instrument (PCI)

The Stand-by Credit Facility (SCF)

Rwanda and IMF

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