- The IMF Executive Board approved today an arrangement for Rwanda under the newly established Resilience and Sustainability Facility (RSF), the first for an African country, in an amount equivalent to US$319 million. The RSF will support Rwanda’s ambitious agenda to build resilience to climate change and help to catalyze further financing.
- The Executive Board also approved a new 36-month Policy Coordination Instrument to support the authorities’ economic policy and reform agenda designed to maintain macroeconomic stability and foster more inclusive growth.
- More decisive monetary policy tightening and timely implementation of a fiscal strategy will be essential to preserve macrsoeconomic stability and safeguard debt sustainability, while fostering adaptative social protection systems, human capital investment, and greater economic diversification that is critical to socioeconomic resilience.
Washington, DC : The Executive Board of the International Monetary Fund (IMF) approved today Rwanda’s request for an arrangement under the Resilience and Sustainability Facility (RSF) amounting to SDR 240.3 million (about US$ 319 million, or 150 percent of quota). Rwanda is the first African country to secure access to the RSF, which was created this year with the aim of helping low-income and vulnerable middle-income IMF members address longer-term structural challenges such as climate change with longer-term, low-cost financing.
The RSF-supported program will advance the authorities’ efforts to build resilience to climate change by improving the transparency and accountability in the planning, execution, reporting, and oversight of budget resources dedicated to addressing climate change. The program will include facilitating green public investment, creating further fiscal space, mitigating financial risks, and strengthening public debt dynamics and prospective balance-of-payments stability.
Disbursements to Rwanda under the RSF will be contingent on the conclusion of relevant reviews under a new 36-month Policy Coordination Instrument (PCI) approved today and implementation of scheduled reform measures agreed as part of the RSF arrangement, which establishes Rwanda’s broad economic reform goals. The new PCI[1]for Rwanda replaces an instrument approved on June 28, 2019 (seePress Release No.19/258).
Program performance under the 2019 PCI has been relatively strong with all quantitative and standard continuous targets through end-June 2022 met, and all but one of the reform targets through end-September 2022 completed. The new PCI will continue to support Rwanda’s macroeconomic policies and reforms, with a greater emphasis on policies to ensure macroeconomic stability and reforms to mitigate pandemic scars and to build socioeconomic resilience to shocks and insure against downside risks.
Following the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair of the Board, issued the following statement:
“Rwanda has become the first African and low-income country to benefit from the Resilience and Sustainability Facility (RSF), a recognition of the country’s commitment to strengthen its resilience to climate change.
The Rwandan authorities implemented a sizable policy package to protect the most vulnerable against multiple shocks, while steering the economy to protect macroeconomic stability and advance their reform agenda under the Policy Coordination Instrument (PCI). However, global headwinds are slowing economic activity amid high unemployment, elevated inflationary pressures and limited fiscal space, compounding the challenges from pandemic scars and climate-related events.
The authorities’ economic program under the new PCI is focused on policies to ensure macroeconomic stability, foster economic growth, and enhance socioeconomic resilience. Timely adoption of domestic revenue mobilization measures envisaged under their medium-term revenue strategy and the launching of a spending rationalization strategy will be critical for the credibility of the envisaged fiscal consolidation and to safeguard debt sustainability. The authorities should continue strengthening capacity to manage fiscal risks and adopt more effective and transparent public financial and investment management practices.
More decisive monetary tightening by the National Bank of Rwanda (NBR) is needed to contain inflationary pressures, while ensuring greater exchange rate flexibility remains key for external stability. Continued monitoring of the financial sector to ensure risks remain contained while deepening financial markets and promoting financial inclusion is also important.
The authorities’ commitment to building socioeconomic resilience through adaptive social safety nets, human capital investments, and economic diversification policies and climate resilience reforms is commendable.
The RSF arrangement, underpinned by a strong reform package will help advance Rwanda’s efforts to build climate resilience. The reforms under the RSF are expected to strengthen and institutionalize monitoring and reporting of climate-related spending, integrate climate risks into fiscal planning, improve the sensitivity of public investment management to climate-related issues, strengthen climate-related risk management for financial institutions, and strengthen the disaster risk reduction and management. The RSF is also expected to catalyze further climate finance from official and private sectors.”
[1]The PCI is available to all IMF members that do not need extensive Fund financial resources at the time of approval. It is designed for countries seeking to demonstrate commitment to a reform agenda or to unlock and coordinate financing from other official creditors or private investors.
2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | ||||||||||||||||||||||||||||||||||||||
Act. | Act. | Act. | 6th Review | Proj. | 6th Review | Proj. | 6th Review | Proj. | 6th Review | Proj. | 6th Review | Proj. | 6th Review | Proj. | ||||||||||||||||||||||||||||||||
(Annual percentage change, unless otherwise indicated) | ||||||||||||||||||||||||||||||||||||||||||||||
Output and prices | ||||||||||||||||||||||||||||||||||||||||||||||
Real GDP | 9.5 | -3.4 | 10.9 | 6.0 | 6.8 | 6.7 | 6.2 | 7.0 | 7.5 | 7.5 | 7.5 | 6.1 | 6.8 | 6.1 | 6.2 | |||||||||||||||||||||||||||||||
GDP deflator | 2.5 | 6.7 | 2.7 | 9.3 | 11.9 | 8.7 | 7.4 | 5.5 | 5.3 | 5.4 | 5.2 | 5.0 | 5.1 | 5.0 | 5.0 | |||||||||||||||||||||||||||||||
CPI (period average) | 2.4 | 7.7 | 0.8 | 9.5 | ‘112.6 | 8.0 | 7.9 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | |||||||||||||||||||||||||||||||
CPI (end period) | 6.7 | 3.7 | 1.9 | 8.8 | 17.1 | 6.5 | 3.4 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 | |||||||||||||||||||||||||||||||
Terms of trade (deterioration, -) | -1.8 | -0.9 | 3.9 | 7.5 | 11.1 | -2.9 | -7.5 | -0.9 | -2.1 | 0.3 | -1.3 | 0.7 | -0.4 | 0.2 | -0.3 | |||||||||||||||||||||||||||||||
Exchange rate (Rwanda franc/US$) (e.o.p.) | 922.5 | 972.5 | 1,009.6 | 1,085.3 | 1,060.0 | 1,155.9 | 1,134.2 | 1,213.7 | 1,207.9 | 1,268.3 | 1,279.2 | 1,319.0 | 1,331.6 | 1,358.6 | 1,383.5 | |||||||||||||||||||||||||||||||
Rwanda franc y/y depreciation rate (e.o.p.) | 5.4 | 3.8 | 7.5 | 5.0 | 6.5 | 7.0 | 5.0 | 6.5 | 4.5 | 5.9 | 4.0 | 4.1 | 3.0 | 3.9 | ||||||||||||||||||||||||||||||||
Exchange rate (Rwanda franc/US$) (p. avg.) | 899.5 | 943.3 | 988.9 | 1,047.5 | 1,034.8 | 1,120.6 | 1,097.1 | 1,184.8 | 1,171.0 | 1,241.0 | 1,243.5 | 1,293.7 | 1,305.4 | 1,332.5 | 1,357.6 | |||||||||||||||||||||||||||||||
Rwanda franc y/y depreciation rate (p. avg.) | 4.9 | 4.8 | 5.9 | 4.6 | 7.0 | 6.0 | 5.7 | 6.7 | 4.7 | 6.2 | 4.2 | 5.0 | 3.0 | 4.0 | ||||||||||||||||||||||||||||||||
Real effective exchange rate (depreciation, -) (p.avg.) | -1.7 | 3.0 | -10.3 | -1.6 | 0.7 | -2.0 | -1.9 | -2.6 | -3.6 | -1.7 | -3.1 | -1.3 | -1.9 | -0.1 | -1.0 | |||||||||||||||||||||||||||||||
Money and credit | ||||||||||||||||||||||||||||||||||||||||||||||
Broad money (M3) | 15.4 | 18.0 | 17.8 | 15.8 | 19.5 | 14.2 | 12.3 | 15.0 | 15.4 | 15.8 | 15.5 | 11.4 | 12.3 | 11.4 | 11.5 | |||||||||||||||||||||||||||||||
Reserve money | 16.0 | 21.7 | 30.7 | 4.8 | 8.1 | 12.2 | 10.3 | 15.0 | 15.4 | 15.8 | 15.5 | 11.4 | 12.3 | 11.4 | 11.5 | |||||||||||||||||||||||||||||||
Credit to non-government sector | 12.6 | 21.8 | 14.7 | 11.0 | 10.8 | 11.5 | 13.7 | 21.3 | 21.2 | 19.4 | 25.7 | 10.7 | 17.6 | 14.5 | 16.9 | |||||||||||||||||||||||||||||||
M3/GDP (percent) | 25.7 | 29.4 | 30.4 | 30.4 | 30.4 | 29.9 | 29.9 | 30.5 | 30.5 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | 31.2 | |||||||||||||||||||||||||||||||
(Percent of GDP, unless otherwise indicated) | ||||||||||||||||||||||||||||||||||||||||||||||
Budgetary central government, FY basis 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue | 23.1 | 23.3 | 25.0 | 25.3 | 25.9 | 24.6 | 23.6 | 22.9 | 22.9 | 23.2 | 23.2 | 24.1 | 23.8 | 24.2 | 24.1 | |||||||||||||||||||||||||||||||
Taxes | 16.0 | 15.7 | 15.8 | 15.7 | 15.7 | 15.4 | 15.9 | 15.9 | 16.0 | 16.5 | 16.5 | 17.3 | 17.2 | 17.5 | 18.0 | |||||||||||||||||||||||||||||||
Grants | 3.0 | 4.6 | 5.5 | 5.9 | 6.9 | 6.6 | 5.2 | 4.4 | 4.4 | 4.1 | 4.2 | 4.0 | 4.1 | 3.9 | 3.8 | |||||||||||||||||||||||||||||||
Other revenue | 3.0 | 3.1 | 3.7 | 3.7 | 3.3 | 2.5 | 2.5 | 2.6 | 2.5 | 2.7 | 2.5 | 2.8 | 2.5 | 2.8 | 2.4 | |||||||||||||||||||||||||||||||
Expense | 20.5 | 20.2 | 20.3 | 20.6 | 20.6 | 19.3 | 20.2 | 18.2 | 18.6 | 18.4 | 18.1 | 18.1 | 17.1 | 18.0 | 17.0 | |||||||||||||||||||||||||||||||
Net acquisition of nonfin. assets | 11.2 | 11.0 | 12.2 | 12.4 | 11.6 | 11.0 | 10.3 | 9.6 | 9.9 | 9.5 | 10.1 | 9.6 | 9.9 | 9.6 | 10.2 | |||||||||||||||||||||||||||||||
Net lending (+) / borrowing (-) (NLB) | -8.6 | -7.9 | -7.5 | -7.6 | -6.3 | -5.7 | -6.9 | -4.9 | -5.6 | -4.7 | -4.9 | -3.6 | -3.2 | -3.4 | -3.0 | |||||||||||||||||||||||||||||||
excluding grants | -11.6 | -12.4 | -13.0 | -13.5 | -13.2 | -12.4 | -12.1 | -9.3 | -10.0 | -8.8 | -9.2 | -7.6 | -7.4 | -7.3 | -6.7 | |||||||||||||||||||||||||||||||
Net acquisition of financial assets | 0.8 | 4.5 | 1.5 | 1.1 | 3.6 | 1.3 | -0.2 | 1.5 | 1.2 | 0.5 | 0.5 | 0.3 | 0.4 | 1.4 | 0.3 | |||||||||||||||||||||||||||||||
Net incurrence of liabilities | 6.4 | 12.3 | 8.9 | 9.0 | 10.4 | 7.0 | 6.7 | 6.4 | 6.8 | 5.2 | 5.5 | 3.9 | 3.6 | 4.8 | 3.3 | |||||||||||||||||||||||||||||||
Domestic | 1.2 | 2.2 | 2.5 | -0.5 | 1.8 | 0.7 | 0.5 | 1.2 | 1.3 | 1.4 | -0.4 | 0.2 | -0.6 | 1.7 | -0.5 | |||||||||||||||||||||||||||||||
Foreign | 5.1 | 10.2 | 6.4 | 9.5 | 8.6 | 6.3 | 6.2 | 5.2 | 5.5 | 3.9 | 5.9 | 3.6 | 4.2 | 3.2 | 3.8 | |||||||||||||||||||||||||||||||
Overall fiscal balance (incl. grants, policy lending) 2 | -8.1 | -9.1 | -8.6 | -8.7 | -7.6 | -6.9 | -8.1 | -6.1 | -6.5 | -4.9 | -5.2 | -3.6 | -3.2 | -3.4 | -3.0 | |||||||||||||||||||||||||||||||
Debt-creating overall balance (excl. PKO)3 | -5.5 | -7.8 | -8.2 | -8.7 | -7.4 | -6.9 | -8.1 | -6.1 | -6.5 | -4.9 | -5.2 | -3.6 | -3.2 | -3.4 | -3.0 | |||||||||||||||||||||||||||||||
Public debt | ||||||||||||||||||||||||||||||||||||||||||||||
Total public debt incl. guarantees | 56.8 | 72.4 | 73.3 | 73.1 | 71.3 | 75.2 | 73.9 | 75.9 | 76.8 | 74.2 | 77.3 | 73.6 | 75.7 | 71.7 | 73.9 | |||||||||||||||||||||||||||||||
of which : external public debt | 44.3 | 56.4 | 54.5 | 57.6 | 53.0 | 58.0 | 55.9 | 60.8 | 60.8 | 60.1 | 63.1 | 59.1 | 62.5 | 56.8 | 62.1 | |||||||||||||||||||||||||||||||
Total public debt excluding guarantees | 53.0 | 69.3 | 72.6 | 71.8 | 70.0 | 73.1 | 71.9 | 73.6 | 74.6 | 71.4 | 74.6 | 71.0 | 73.1 | 69.4 | 71.5 | |||||||||||||||||||||||||||||||
External public debt incl. guarantees, PV | 29.7 | 34.0 | 34.9 | 36.1 | 33.6 | 38.2 | 35.8 | 39.2 | 38.9 | 38.7 | 40.4 | 37.6 | 39.9 | 35.7 | 39.5 | |||||||||||||||||||||||||||||||
Gross domestic debt | 12.4 | 16.0 | 18.8 | 15.5 | 18.3 | 17.1 | 18.0 | 15.1 | 16.0 | 14.2 | 14.2 | 14.5 | 13.2 | 15.0 | 11.8 | |||||||||||||||||||||||||||||||
Total public debt incl. guarantees, PV | 42.9 | 51.1 | 54.4 | 53.0 | 52.7 | 56.6 | 55.0 | 55.3 | 56.1 | 53.7 | 55.8 | 52.9 | 53.9 | 51.3 | 52.1 | |||||||||||||||||||||||||||||||
Investment and savings | ||||||||||||||||||||||||||||||||||||||||||||||
Investment | 23.5 | 25.1 | 26.3 | 25.8 | 24.5 | 28.4 | 29.0 | 29.4 | 30.5 | 28.6 | 29.5 | 28.4 | 28.9 | 28.2 | 28.1 | |||||||||||||||||||||||||||||||
Government | 12.9 | 14.2 | 12.2 | 13.2 | 12.8 | 11.8 | 11.4 | 11.1 | 11.9 | 10.8 | 11.4 | 11.2 | 11.6 | 11.0 | 10.8 | |||||||||||||||||||||||||||||||
Nongovernment | 10.6 | 11.0 | 14.1 | 12.6 | 11.6 | 16.5 | 17.6 | 18.3 | 18.6 | 17.8 | 18.0 | 17.2 | 17.2 | 17.2 | 17.3 | |||||||||||||||||||||||||||||||
Savings (excl. grants) | 9.0 | 10.2 | 12.3 | 8.6 | 9.9 | 13.7 | 14.1 | 16.3 | 15.8 | 16.9 | 15.6 | 17.8 | 17.6 | 18.1 | 17.7 | |||||||||||||||||||||||||||||||
Government | 3.7 | -0.5 | -0.6 | -0.2 | -0.1 | 0.8 | 1.2 | 1.5 | 0.9 | 2.8 | 3.3 | 3.4 | 4.3 | 3.6 | 3.9 | |||||||||||||||||||||||||||||||
Nongovernment | 5.3 | 10.7 | 12.8 | 8.9 | 10.0 | 12.9 | 13.0 | 14.9 | 14.9 | 14.1 | 12.3 | 14.4 | 13.4 | 14.5 | 13.7 | |||||||||||||||||||||||||||||||
External sector | ||||||||||||||||||||||||||||||||||||||||||||||
Exports (goods and services) | 21.8 | 18.9 | 19.1 | 23.4 | 24.1 | 25.3 | 25.0 | 27.1 | 25.9 | 28.5 | 26.6 | 28.8 | 26.7 | 29.2 | 27.0 | |||||||||||||||||||||||||||||||
Imports (goods and services) | 36.1 | 35.1 | 34.8 | 41.7 | 40.0 | 41.2 | 41.1 | 40.8 | 41.4 | 40.9 | 41.2 | 40.2 | 38.5 | 40.1 | 38.0 | |||||||||||||||||||||||||||||||
Current account balance (incl. grants) | -11.9 | -12.1 | -10.9 | -12.6 | -10.5 | -11.7 | -12.4 | -10.3 | -11.6 | -8.9 | -11.0 | -7.8 | -8.6 | -7.3 | -7.7 | |||||||||||||||||||||||||||||||
Gross international reserves | ||||||||||||||||||||||||||||||||||||||||||||||
In millions of US$ | 1,382 | 1,722 | 1,889 | 1,868 | 1,894 | 1,869 | 2,052 | 2,063 | 2,309 | 2,093 | 2,378 | 2,229 | 2,442 | 2351 | 2643 | |||||||||||||||||||||||||||||||
In months of next year’s imports4 | 5.6 | 5.9 | 5.1 | 4.6 | 4.7 | 4.4 | 4.7 | 4.5 | 5.0 | 4.3 | 5.2 | 4.2 | 5.0 | 4.1 | 5.0 | |||||||||||||||||||||||||||||||
Memorandum items: | ||||||||||||||||||||||||||||||||||||||||||||||
GDP at current market prices | ||||||||||||||||||||||||||||||||||||||||||||||
Rwanda francs (billion), CY basis | 9,314 | 9,607 | 10,944 | 12,672 | 13,075 | 14,698 | 14,904 | 16,585 | 16,880 | 18,800 | 19,083 | 20,942 | 21,429 | 23,340 | 23,898 | |||||||||||||||||||||||||||||||
nominal growth | 12.2 | 4.6 | 13.9 | 15.8 | 19.5 | 16.0 | 14.0 | 12.8 | 13.3 | 13.4 | 13.1 | 11.4 | 12.3 | 11.4 | 11.5 | |||||||||||||||||||||||||||||||
Population (million) | 12.4 | 12.7 | 13.0 | 13.3 | 13.3 | 13.6 | 13.6 | 13.9 | 13.9 | 14.2 | 14.2 | 14.5 | 14.5 | 14.8 | 14.8 | |||||||||||||||||||||||||||||||
Sources: Rwandan authorities and IMF staff estimates. | ||||||||||||||||||||||||||||||||||||||||||||||
1 From FY 19/20 (2020) to FY 26/27 (2027). Fiscal year runs from July to June. FY19/20 and FY20/21 are actuals. | ||||||||||||||||||||||||||||||||||||||||||||||
2 For purposes of the PCI the overall balance (GFSM 1986, incl. policy lending) is used for monitoring. | ||||||||||||||||||||||||||||||||||||||||||||||
3 Overall deficit excl. spending on materialized contingent liabilities and other items already incl. in the DSA. | ||||||||||||||||||||||||||||||||||||||||||||||
4 Based on prospective import of goods (excluding gold) and services. SDR allocation included in 2021. | ||||||||||||||||||||||||||||||||||||||||||||||