Rwanda Set for New $165 Million IMF Funding

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The International Monetary Fund said on Friday, March 22, that a two-week mission to Rwanda had agreed to allocate another $165.5 million in funding to the country, even as it warned of vulnerabilities tilted to the downside.

While Rwanda’s economic outlook continues to be positive, IMF mission lead, Ruben Atoyan said that a number of risks remain that could potentially weigh on the outlook.

He cited a number of factors including the deepening of geopolitical fragmentation, another spike in global energy and food prices, as well as a slowdown in trading partners’ growth.

Under the new funding, Rwanda is set to gain access to approximately $76.6 million through the Resilience and Sustainability Facility (RSF) and $88.9 million through the Standby Credit Facility (SCF).

Atoyan announced the development following his two-week visit to Kigali, to, among others, discuss the authorities’ policy priorities and progress on reforms within the context of the third review of Rwanda’s Policy Coordination Instrument (PCI) and Resilience and Sustainability Facility (RSF).

It was also during the visit that the IMF made the first review of the Stand-by Credit Facility (SCF) arrangement. Consideration by the Board, according to Atoyan, is tentatively scheduled for May 2024.

“Rwanda’s growth momentum remained strong, notwithstanding the challenging external environment. The 2023 GDP growth continued to be robust at 8.2 percent year-on-year, on the back of strong performance in services and construction, as well as recovery in food crop production in the second half of the year,” he told a press conference in Kigali.

“Inflation decelerated sharply in recent months. Headline inflation was 4.9 per cent in February 2024, down from the peak of 21.7 per cent in November 2022, owing to an appropriately tight monetary policy stance and favorable developments in food prices as agricultural production rebounded at the end of last year,” he added.

Reacting on the climate agenda, Atoyan and his team hailed Rwanda’s “ongoing progress” in strengthening institutional capacity to integrate climate-related considerations.

“The authorities’ commitment to implement climate-related reforms under the RSF arrangement continued to be strong, with measures to implement climate budget tagging, integrate climate risks into fiscal planning, and strengthen disaster risk management being on track to be completed in the coming weeks.”

Uzziel Ndagijimana, Minister of Finance and Economic Planning, maintained that Rwanda’s economy rebounded strongly despite external shocks and climate related setbacks.

“We will continue to collaborate closely with the IMF to ensure prudent management of our economy.”

This is not the first round of funding Rwanda has secured from the IMF.

In October, 2023, the IMF allocated a 14-month Stand-by Credit Facility worth $262 million as part of the efforts to deal with balance of payment pressures from climate shocks.

In the same year, the IMF said Rwanda and international development banks planned to raise an additional 300 million euros ($319.62 million) to, among others, adapt to climate change.

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