## IMF Executive Board Completes Third SCF and Eighth PSI Reviews for Rwanda, Approves US$25.8 Million Disbursement Under the SCF, and Extends the PSI

_IMF News, January 12, 2018_

## Source details

**Canonical URL:** [IMF Executive Board Completes Third SCF and Eighth PSI Reviews for Rwanda, Approves US$25.8 Million Disbursement Under the SCF, and Extends the PSI](https://www.imf.org/en/news/articles/2018/01/12/pr1802-imf-executive-board-completes-third-scf-and-eighth-psi-reviews-for-rwanda)

## Other formats

- [Markdown version](/en/news/articles/2018/01/12/pr1802-imf-executive-board-completes-third-scf-and-eighth-psi-reviews-for-rwanda/index.md)
- [Structured JSON version](/en/news/articles/2018/01/12/pr1802-imf-executive-board-completes-third-scf-and-eighth-psi-reviews-for-rwanda/index.json)
- [Bundle manifest](/en/news/articles/2018/01/12/pr1802-imf-executive-board-completes-third-scf-and-eighth-psi-reviews-for-rwanda/bundle-manifest.json)

## Bibliographic details
- Published: January 12, 2018

---

### Executive Board actions
- The Executive Board approved the extension of the Policy Support Instrument (PSI) for Rwanda to December 1, 2018.
- The Executive Board completed the eighth review of Rwanda’s performance under the PSI and the third and final review of the arrangement under the Standby Credit Facility (SCF).
- Completion of the third SCF review enables the disbursement of US$ 25.8.million (SDR 18. 0225 million), bringing total disbursements under the arrangement to SDR 144.18 million, about US$206.6million.
- Requests for an 18-month SCF arrangement with access of about US$204 million (SDR 144.18 million) or 90 percent of Rwanda’s quota and to extend Rwanda’s PSI-supported program through end-2017 were approved by the Executive Board on June 8, 2016. Both were again extended on November 29, 2017 to January 31, 2018.

### Key findings and macroeconomic outlook (statements by Mr. Zhang)
- Rwanda has made notable progress in reducing external imbalances, which has helped safeguard macroeconomic stability and improved prospects for long term growth.
- Exchange rate adjustment has been the central tool of policy adjustment, supported by public spending restraint and prudent monetary policy.
- Combined with targeted policies to promote domestic production, these policies have reduced the current account deficit and should place external balances on a sustainable path over the medium term.
- After a slowdown in 2016 and early 2017, growth has started to recover, led by agriculture and services.
- Over the course of the next two years, growth is expected to return to its historical average of 7-7.5 percent, supported by investments in public infrastructure and interventions promoting structural transformation and diversified exports.
- Headline inflation spiked in early 2017 but has declined rapidly as food supplies recovered from the drought; inflation is expected to remain low in the near term but could pick up gradually over the course of 2018 as growth accelerates.
- Despite achievements, the Rwandan economy remains vulnerable to external shocks and fiscal risks; it will be important to continue building foreign exchange reserve buffers and to identify and mitigate potential fiscal risks.
- The authorities are crafting a revised medium term development strategy with the goal of achieving middle income status by 2035; regaining momentum in mobilizing domestic revenue is important to finance development.

### Recent economic developments (highlights)
- Rwanda’s growth in 2016 and early 2017, while below historical standards, remained robust relative to the region, with 2017 growth estimated at 5.2 percent.
- A growth recovery began in Q2 2017 and strengthened in Q3, with growth expected to revert to historical averages (7–7.5 percent) over the next two years.
- The trade deficit continued to narrow as growth in export volumes outpaced that of imports, partly reflecting the impact of exchange rate adjustment and structural policies.
- The current account deficit is expected to improve from 14.9 percent of GDP in 2016 to 8.8 percent in 2017.
- Year-on-year consumer price inflation was at 2.3 percent in November, 2017; inflation is expected to close the year below the central bank’s medium-term target of 5 percent, but should pick up toward the target as growth accelerates.
- Monetary policy has been relaxed, with the policy rate adjusted downwards by a cumulative 100 basis points since November 2016.
- The fiscal policy stance for FY2018/19 has been slightly relaxed while maintaining the medium-term path of adjustment.
- Performance under the PSI-supported program and SCF arrangement remained strong; most quantitative targets and structural reform benchmarks were met, except for a target on domestic arrears at end-June 2017 and a planned measure to roll out a pilot for electronic billing machines (the latter was intentionally delayed in favor of newer and less costly software).

### Program purpose and policy priorities
- The PSI and SCF arrangement have supported Rwanda’s efforts to address external imbalances, support continued strong growth, and durable poverty reduction.
- The SCF arrangement added a financing component to the existing PSI-supported program aimed to:
  - promote private-sector led growth through safeguarding macroeconomic stability, including external sustainability;
  - promote fiscal sustainability based on continued improvements in domestic resource collection;
  - maintain low and stable inflation; and
  - enhance access to credit and deepen the financial sector.

### Table 1 — Selected economic indicators, 2016–2019 (selected exact figures)
- Real GDP: 2016: 5.9, 2017: 5.2, 2018: 6.5, 2019: 7.5
- GDP deflator: 2016: 4.9, 2017: 6.4, 2018: 4.2, 2019: 5.0
- CPI (period average): 2016: 5.7, 2017: 5.3, 2018: 4.5
- CPI (end of period): 2016: 7.3, 2017: 4.0
- Terms of trade (deterioration, -): 2016: 6.3, 2017: 4.6, 2018: -4.7, 2019: 1.2
- Broad money (M3): 2016: 7.6, 2017: 14.7, 2018: 14.4
- Reserve money: 2016: 5.5, 2017: 12.6, 2018: 11.7
- Credit to non-government sector: 2016: 7.8, 2017: 11.0, 2018: 12.9
- M3/GDP (percent): 2016: 24.1, 2017: 24.7, 2018: 25.5
- NPLs (percent of total gross loans)1: 2016: 8.2
- Total revenue and grants (percent of GDP): 2016: 23.7, 2017: 22.7, 2018: 22.6, 2019: 22.1
  - of which: tax revenue: 2016: 15.8, 2017: 15.7, 2018: 22.6, 2019: 15.9
  - of which: grants: 2016: 5.1, 2017: 22.6, 2018: 4.4, 2019: 4.3
- Expenditure (percent of GDP) — Current / Capital: 2016: 27.4 / 15.4 / 10.6; 2017: 28.0 / 15.0 / 10.7; 2018: 27.1 / 14.6 / 10.4; 2019: 26.6 / 9.8
- Primary balance: 2016: -2.8, 2017: -4.2, 2018: -3.3
- Overall balance excluding grants: 2016: -3.8, 2017: -8.9, 2018: -5.3, 2019: -9.8
- Net domestic borrowing: 2016: -4.5, 2017: -4.4, 2018: -8.7
- Total public debt incl. guarantees: 2016: 44.5, 2017: 47.6, 2018: 49.2, 2019: 49.8
  - Of which: external public debt: 2016: 35.8, 2017: 37.6, 2018: 39.4, 2019: 40.2
- Investment: 2016: 26.1, 2017: 25.0, 2018: 26.0, 2019: 23.4
  - Government: 2016: 15.5, 2017: 14.3, 2018: 15.6, 2019: 13.6
- Savings: 2016: 7.2, 2017: 12.5, 2018: 11.3
- Exports (goods and services): 2016: 18.8, 2017: 21.1, 2018: 21.5
- Imports (goods and services)2: 2016: 36.8, 2017: 31.8, 2018: 33.1, 2019: 32.8
- Current account balance (incl. grants): 2016: -14.9, 2017: -8.8, 2018: -10.0, 2019: (not listed)
- Current account balance (excl. grants): 2016: -18.9, 2017: -12.5, 2018: -13.4, 2019: -12.1
- Current account balance (excl. large projects): 2016: -10.3, 2017: -8.1, 2018: -7.3, 2019: -6.5
- Gross international reserves in millions of U.S.$: 2016: 1,001, 2017: 1,083, 2018: 1,128, 2019: 1,275
- Gross international reserves in months of next year’s imports: 2016: 4.1
- GDP at current market prices — Rwanda francs (billion): 6,618; 2017: 7,405; 2018: 8,220; 2019: 9,279
- GDP at current market prices — US$ (million): 8,406
- GDP per capita (US$): 728
- Population (million): 11.6, 11.8, 12.1, 12.4

*Press Release No. 18/02, January 12, 2018, International Monetary Fund.*

---


## References

- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [Rwanda and the IMF](http://www.imf.org/external/country/RWA/index.htm)
- [Policy Support Instrument (PSI)](https://www.imf.org/en/about/factsheets/sheets/2023/policy-support-instrument-psi)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 16/270](https://www.imf.org/external/np/sec/pr/2016/pr16270.htm)
- [Press Release No.17/457](http://www.imf.org/en/News/Articles/2017/11/30/pr17457-rwanda-imf-executive-board-approves-extensions-of-the-standby-credit-facility-arrangement)
- [http://www.imf.org/external/np/exr/facts/psi.htm](http://www.imf.org/external/np/exr/facts/psi.htm)
- [www.imf.org/rwanda](http://www.imf.org/rwanda)
- [http://www.imf.org/external/np/exr/facts/scf.htm](http://www.imf.org/external/np/exr/facts/scf.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2018/01/12/pr1802-imf-executive-board-completes-third-scf-and-eighth-psi-reviews-for-rwanda_