The International Monetary Fund (IMF) said it has approved $181.7 million in new funds to Rwanda after its executive board concluded reviews of the country's support programmes. IMF mission to Rwanda held the two week-long reviews in October. According to a statement released by the IMF on December 13, the funds follow the completion of its fourth review of Rwanda's Policy Coordination Instrument (PCI) and the Resilience and Sustainability Facility (RSF) and second review under the Standby Credit Facility (SCF). “Despite a challenging external environment, Rwanda's economy has maintained robust growth, driven by strong performance of the services and construction sectors, and a recovery in food crop production,” reads the statement in part. The IMF forecasts Rwanda's economic growth at 8.3 per cent this year and 7 per cent in 2025, up from 8.2 per cent growth in 2023. “While fiscal consolidation may moderately dampen the near-term growth, a rebound is anticipated in the medium term,” the IMF said in its statement. Since the beginning of the year, inflation has stabilised at around 5 per cent, the mid-point of the central bank’s target range, owing to appropriately tight monetary policy and favorable developments in food prices. While the current account deficit widened more than expected in 2024 due to strong capital goods imports, IMF said that international reserves are projected to remain adequate at about 4.5 months of imports at the end of 2024, including RSF disbursements. Mobilise domestic revenue To ensure Rwanda's economic stability and growth, IMF maintained that policies should focus on maintaining macroeconomic and financial stability, ensuring fiscal sustainability, and rebuilding policy buffers. “Accelerating domestic revenue mobilisation will be critical to restore Rwanda’s policy space for responding to shocks and achieving its development objectives,” the fund said in a statement. Efforts to enhance domestic revenue mobilization should focus on broadening the tax base, streamlining exemptions, and improving compliance. Also needed is the continued progress on expenditure rationalization and mitigating fiscal risks from state owned enterprises (SOEs). The fund pointed out that monetary policy should aim to control inflation and maintain exchange rate flexibility to handle external shocks.
