The funding was approved by the Executive Board of IMF following the completion of the fourth reviews under the Policy Coordination Instrument (PCI) and the Resilience and Sustainability Facility , as well as the second review under the Standby Credit Facility.
These reviews confirm that Rwanda has made significant progress in areas like fiscal consolidation, inflation control, and climate policy integration.
According to the IMF, Rwanda's economy grew by 8.2% in 2023, driven by strong performance in services, construction, and a recovery in food crop production.
For 2024, the IMF projects growth will remain strong at 8.3%, with a slight decrease to 7% expected in 2025. Growth is projected to remain steady at 7% in 2026, with an increase to 7.2% in 2027 and a further rise to 7.3% in 2028 and 2029.
Despite a positive growth outlook, external challenges, including inflation and a widening current account deficit, have been a concern.
In 2023, inflation rose to 14%, but the IMF projects that, starting in 2024 and continuing through 2029, inflation will stabilize at around 5%.
This is in line with Rwanda's strong monetary policies and efforts to keep inflation within the central bank's target range.
The funding will be vital for maintaining Rwanda's macroeconomic stability and ensuring fiscal sustainability. It will also help the government accelerate domestic revenue mobilization, which is key to expanding fiscal space and improving Rwanda's ability to respond to economic shocks.
Additionally, the funding will support further reforms aimed at increasing public investment efficiency, reducing fiscal risks from state-owned enterprises (SOEs), and managing financial sector stability.
The IMF has also recognized Rwanda's progress in integrating climate considerations into its economic policies.
By establishing frameworks to attract climate financing, Rwanda is positioning itself to address climate challenges and promote sustainable investment. The government is developing a green project pipeline to help attract additional climate resources, enhancing the overall impact of the funding.
Mr. Bo Li, IMF Deputy Managing Director, highlighted Rwanda's economic resilience, noting its strong growth in key sectors and effective monetary policies.
However, he emphasized the continued need for fiscal reforms, improved revenue mobilization, and oversight of state-owned enterprises to ensure long-term economic stability.
He also praised the country's work in advancing its climate policy, positioning Rwanda as a leader in integrating climate goals with economic development.
IGIHE
Source : https://en.igihe.com/economy/article/imf-approves-181-74-million-funding-to-rwanda
