## IMF Staff Completes Review Mission to Rwanda

_IMF News, October 2, 2018_

## Source details

**Canonical URL:** [IMF Staff Completes Review Mission to Rwanda](https://www.imf.org/en/news/articles/2018/10/02/pr18372-imf-staff-completes-review-mission-to-rwanda)

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## Bibliographic details
- Published: October 2, 2018

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### Mission outcome and next steps
- IMF staff reached preliminary agreement with the government on policies to support completion of the tenth and final review of Rwanda’s PSI-supported program, subject to approval by IMF management and its Executive Board.
- The Executive Board is expected to consider the review in November 2018.
- The current PSI-supported program expires on December 1, 2018.
- The intention is to initiate successor program negotiations in early 2019.
- IMF staff visit: from September 20 to October 2, 2018 (team led by Emre Alper and Laure Redifer).

### Real economy and inflation
- Real GDP growth:
  - 6.1 percent in 2017.
  - Averaged 8.6 percent in the first half of 2018.
  - Projected end-year growth rate of 7.2 percent in 2018.
- Inflation:
  - Projected to average around 2.8 percent in 2018.
  - Inflation expectations remain close to the medium-term inflation target.
- Drivers:
  - Robust growth in 2018 reflects strong industrial activity, notably construction.
  - Favorable food price developments contributed to low inflation.

### Monetary policy and reserves
- Central bank maintained the policy rate at 5.5 percent through 2018.
- The central bank kept the monetary policy stance unchanged in September.
- Projected balance of payments surplus expected to support central bank reserve accumulation.

### Fiscal outcomes and public investment
- Fiscal outturn in FY17/18 remained broadly in line with the revised budget.
- Higher capital spending was financed through drawdown of deposits of official development assistance accumulated in previous years.
- Capital projects cited include improvements to rural road access and vocational training aligned with the National Strategy for Transformation.
- Fiscal restraint on recurrent spending and a robust revenue outturn helped contain the deficit.
- Reforms:
  - Domestic resource mobilization and public financial management reforms have made Rwanda’s fiscal position more sustainable while scaling up social spending.

### External sector, trade, and investment
- Trade performance to August 2018:
  - Export growth of 17.9 percent in the year to August 2018.
  - Import growth of 7.4 percent in the year to August 2018.
- Trade balance continued to improve, though:
  - Construction of Bugesera airport and a pickup in foreign-financed investment are expected to fuel imports, notably of capital goods, leading to a rise in the trade deficit in 2018.
- Capital flows:
  - Project disbursements and robust foreign direct investment are expected to maintain the balance of payments in surplus.

### Structural reforms, competitiveness, and resilience
- Authorities have undertaken policies to improve competitiveness, diversify production, promote exports, and contain imports.
- Reforms highlighted:
  - Reforms to the monetary policy framework and in the financial system have helped to contain inflation while deepening financial markets.
  - Greater exchange rate flexibility and other structural reforms have made Rwanda more resilient to external shocks and enhanced competitiveness.
- Sectoral support:
  - Continued diversification of the export base and extensive irrigation programs expected to support more resilient agriculture.
  - Public investment spending intended to crowd in private sector investment.

### Program implementation and assessment
- Implementation of Rwanda’s PSI-supported macroeconomic program has been strong.
- All quantitative targets for the tenth and last review were met.
- Structural benchmarks are expected to be completed.
- The PSI-supported program has been successful in supporting Rwanda’s overarching objective of sustaining inclusive growth and poverty reduction.

### Stakeholder engagement
- The IMF staff team met with:
  - Minister of Finance and Economic Planning, Uzziel Ndagijimana.
  - Minister of Trade and Industry, Vincent Munyeshyaka.
  - Minister of Agriculture and Animal Resources, Gerardine Mukeshimana.
  - Governor of the National Bank of Rwanda, John Rwangombwa.
  - Other senior government officials, private sector and civil society representatives, and development partners.

*Source: Press Release No. 18/372, IMF Staff Completes Review Mission to Rwanda, October 2, 2018.*

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## References

- [Rwanda and the IMF](http://www.imf.org/external/country/RWA/index.htm)
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- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2018/10/02/pr18372-imf-staff-completes-review-mission-to-rwanda_