Press Release: Statement by the IMF Mission at the Conclusion of its Visit to Rwanda

October 1, 2013

Press Release No. 13/379
October 1, 2013

An International Monetary Fund (IMF) mission, led by Mr. Paulo Drummond, visited Kigali during September 18 to October 2 to conduct the seventh and final review under the current Policy Support Instrument (PSI), and negotiate a new three-year PSI.1 The mission met with Minister of Finance and Economic Planning Claver Gatete, Governor of the National Bank of Rwanda John Rwangombwa, as well as other senior government officials, development partners, and representatives of the business community and civil society. The mission wishes to thank the authorities for the constructive discussions, and express its appreciation for the kind hospitality provided during the visit.

At the conclusion of the mission to Kigali, Mr. Drummond issued the following statement:

“The IMF mission and the Rwandan authorities reached a staff-level agreement on a successor three-year Policy Support Instrument (PSI). The new PSI is in line with the authorities’ new Economic Development and Poverty Reduction Strategy (EDPRS 2), and aims to maintain macroeconomic stability and rapid inclusive growth, while gradually reducing Rwanda’s aid dependency.

“Economic growth slowed to 5.9 percent during the first half of 2013 as the government adjusted to a shortfall in donor budget support. The expansion in the services sector slowed and so did the pace of construction. However, improvements in the terms of trade, greater exchange rate flexibility, and a drawdown of foreign reserves helped cushion the economic impact of lower aid inflows. For the first time in many years, the external sector contributed strongly to growth, reflecting the sharp increase in traditional exports, especially minerals, while import growth slowed. Inflation has remained subdued, standing at 4 percent in August.

“Performance under the IMF-supported program has continued to be satisfactory. Budget implementation in the fiscal year 2012/13 was strong due to better than expected revenue performance and expenditure control in line with the supplementary budget; the monetary program was on target; and structural reforms advanced broadly as planned. All but one quantitative assessment criteria for the seventh review were met; the limit on non-concessional borrowing was breached when Rwandair borrowed to reduce its indebtedness to the Government.

“Looking ahead, the macroeconomic outlook points to a pick-up in growth in the second half of this year as domestic demand recovers with the resumption of aid flows. For the year as a whole, economic growth is projected at 6.6 percent and at 7.5 percent in 2014, supported by a resumption of strong growth in services. Inflation is expected to rise to 6.5 percent at end-year because of rising food prices. Over the medium-term, growth is projected to average about 7.5 percent per year and inflation to converge to the medium-term target of 5 percent. Growth over the medium-term is expected to reflect the start of a transition from domestic demand driven, public sector led, aid-reliant growth toward growth that is increasingly driven by net exports, the private sector, and the government’s own resources.

“Implementation of the reforms agreed within the context of the new PSI is expected to underpin the transition toward private sector-led growth. These reforms include the government’s objectives of enhancing revenue mobilization by broadening tax bases, removing exemptions, and improving tax administration. Other reforms include strengthening public financial management, improving the effectiveness of monetary policy, increasing financial access, diversifying exports, and prioritizing the public investment program, while pursuing a prudent debt management strategy.

“The IMF's Executive Board is expected to consider the seventh PSI review and the request for a successor PSI in November 2013.”

1 The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support. The PSI helps countries design effective economic programs that, once approved by the IMF's Executive Board, signal to donors, multilateral development banks, and markets the Fund's endorsement of a member's policies (see Details on Rwanda’s current PSI are available at


Media Relations
Phone: 202-623-7100