Rwanda-IMF: Grant of 182 million dollars

The International Monetary Fund (IMF) has approved $182 million for Rwanda. The announcement was made by the IMF representative during a meeting he held with the Minister of Finance and Economic Planning Yussuf Murangwa and the Governor of the National Bank of Rwanda John Rwangombwa.

The International Monetary Fund (IMF) said it has approved $181.7 million in new funds for Rwanda after its executive board concluded reviews of the country’s support programs.

The IMF mission to Rwanda conducted a two-week assessment tour of IMF-financed projects.

According to a statement issued by the IMF, this amount follows the completion of the fourth review of the Policy Coordination Instrument (PCI) and the Resilience and Sustainability Facility (RSF) of Rwanda, as well as the second review of the Support Credit Facility (SCF).

“Despite a challenging external environment, Rwanda’s economy maintained robust growth, driven by strong performance in the services and construction sectors, and a recovery in food crop production,” the statement read in part.

The IMF projects Rwanda’s economic growth to be 8.3% this year and 7% in 2025, up from 8.2% in 2023.

“While fiscal consolidation could moderately dampen growth in the short term, a rebound is expected in the medium term,” the IMF said in its statement.

The Resident Representative of the International Monetary Fund (IMF) in Rwanda, Gabor Pula, said Rwanda has successfully fulfilled all its commitments to the financial institution under the Resilience and Sustainability Facility (RSF), six months ahead of schedule.

According to the Governor of the National Bank of Rwanda, John Rwangombwa, since the beginning of the year, inflation has stabilized at around 5%, the midpoint of the national bank’s target range, due to a sufficiently tight monetary policy and favorable developments in food prices.

While the current account deficit widened more than expected in 2024 due to strong imports of capital goods, the IMF said international reserves are expected to remain adequate at about 4.5 months of imports at end-2024, including disbursements under the Poverty Reduction Facility.

To ensure Rwanda’s economic stability and growth, the IMF maintained that policies should focus on maintaining macroeconomic and financial stability, ensuring fiscal sustainability, and rebuilding policy buffers.

“Accelerating domestic revenue mobilization will be essential to restore Rwanda’s policy space to respond to shocks and achieve its development goals,” the IMF said in a statement.

Efforts to strengthen domestic revenue mobilization should focus on broadening the tax base, streamlining exemptions and improving compliance.

There is also a need to continue progress in streamlining expenditure and mitigating fiscal risks associated with state-owned enterprises.

The International Monetary Fund has stressed that monetary policy should aim at controlling inflation and maintaining exchange rate flexibility to cope with external shocks.