The Executive Board of the International Monetary Fund (IMF) today approved
the disbursement of SDR80.1 million (about US$109.4 million) to be drawn
under the Rapid Credit Facility (RCF). This will serve to meet Rwanda’s
urgent balance of payment needs stemming from the outbreak of the COVID-19
pandemic.
The economic impact of the COVID-19 pandemic is rapidly unfolding, with the
near-term outlook deteriorating quickly. This has given a rise to
significant fiscal and external financing needs.
The authorities have acted fast by putting in place measures to help
contain and mitigate the spread of the disease.
The RCF funds will support the authorities’ efforts by backstopping the
decline in international reserves and providing financing to the budget for
increased spending aimed at containing the epidemic and mitigating its
economic impact. This additional IMF financing also ought to help catalyze
further assistance from the international community, preferably in the form
of grants.
The IMF continues to monitor Rwanda’s situation closely and stands ready to
provide policy advice and further support as needed.
Following the Executive Board’s discussion of Rwanda, Mr. Tao Zhang, Deputy
Managing Director and Acting Chair, issued the following statement:
“The COVID-19 Pandemic has ground Rwanda’s economy to a halt, creating an
urgent balance of payments need. To contain and mitigate the spread of the
virus, the government swiftly implemented measures that have affected all
sectors of the economy. With uncertainties surrounding the duration and
spread of the pandemic, the economic fallout could intensify further.
“The IMF emergency support under the Rapid Credit Facility will help with
COVID19-related pressures on trade, tourism and foreign exchange reserves,
and will provide much-needed resources for health expenditure and for
households and firms affected by the crisis. It should also help to
catalyze donor support.
“A temporary widening of the budget deficit is appropriate to mitigate the
health and economic impact of the pandemic. Spending should be
well-targeted and cost-effective to not crowd-out other priority areas.
Once the crisis abates, the fiscal adjustment path should be adjusted to
preserve debt sustainability in the medium-term. Contingency plans should
be prepared given the uncertain outlook.
“Monetary policy needs to be data-driven and the central bank should stand
ready to provide additional liquidity support if warranted. A flexible
exchange rate should be maintained as a shock absorber. The National Bank
of Rwanda has taken various measures to help maintain the health of the
financial sector and should continue to show flexibility, while encouraging
prudent loan restructuring and stepping up reporting requirements.
“Additional donor support is critical to close the remaining financing gap,
ease the adjustment burden, and preserve Rwanda’s development gains over
the last two decades.”
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Table 1. Rwanda: Selected Economic Indicators,
2018‒22
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2018
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2019
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2020
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2021
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2022
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Prel.
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Proj.
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Proj.
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Proj.
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Proj.
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(Annual percentage change, unless
otherwise indicated)
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Output and prices
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Real GDP
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8.6
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10.1
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5.1
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6.7
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8.0
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GDP deflator
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-0.8
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1.2
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6.5
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5.4
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5.0
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CPI (period average)
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1.4
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2.4
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6.9
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5.4
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5.0
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CPI (end period)
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1.1
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6.7
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5.0
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5.0
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5.0
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Terms of trade (deterioration, -)
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-0.7
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-1.8
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0.9
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-0.6
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0.0
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Money and credit
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Broad money (M3)
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15.6
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15.4
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11.0
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18.6
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13.4
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Reserve money
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16.1
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17.2
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10.9
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18.6
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17.6
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Credit to non-government sector
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10.8
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12.6
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8.2
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12.3
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13.7
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M3/GDP (percent)
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25.3
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26.2
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26.0
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27.4
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27.4
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NPLs (percent of total gross loans)
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6.4
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…
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…
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…
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…
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Budgetary central government
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(Percent of GDP, unless otherwise
indicated)
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Total revenue and grants
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24.1
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23.6
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21.5
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23.3
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23.0
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of which
: tax revenue
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16.2
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16.7
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14.9
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16.8
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17.0
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of which
: grants
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4.9
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4.2
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4.4
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4.3
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4.1
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Expenditure
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28.8
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31.7
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31.8
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29.7
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27.9
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Current
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15.3
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15.6
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16.1
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14.9
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13.4
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Capital
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11.5
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13.2
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12.9
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12.9
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12.7
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Primary balance
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-3.5
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-6.8
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-8.6
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-5.0
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-3.3
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Overall balance
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-4.7
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-8.1
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-10.3
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-6.5
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-4.9
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excluding grants
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-9.6
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-12.3
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-14.7
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-10.8
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-9.0
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Debt-creating overall bal. (exc. PKO)1/
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-6.6
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-10.1
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-6.5
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-5.4
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Net domestic borrowing
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0.0
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0.8
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4.5
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2.0
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-0.7
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Public debt
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Total public debt incl. guarantees
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53.1
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58.4
46.2
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64.3
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66.2
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65.5
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of which
: external public debt
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41.6
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48.0
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48.7
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49.1
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PV of total public debt incl.
guarantees
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40.9
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42.6
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47.3
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48.1
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47.2
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Investment and savings
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Investment
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24.4
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28.9
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23.5
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25.0
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27.7
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Government
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11.5
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13.2
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12.9
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12.9
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12.7
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Nongovernment
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12.9
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15.7
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10.6
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12.1
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15.1
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Savings
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12.8
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17.1
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5.6
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12.2
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15.1
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Government
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4.0
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3.8
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0.9
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4.0
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5.5
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Nongovernment
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8.8
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13.3
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4.6
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8.2
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9.6
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External sector
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Exports (goods and services)
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21.5
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21.3
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13.6
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22.9
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24.6
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Imports (goods and services)
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33.1
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33.1
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29.4
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35.1
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36.5
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Current account balance (incl grants)
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-8.0
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-9.2
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-16.0
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-10.2
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-9.8
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Current account balance (excl grants)
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-11.6
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-11.7
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-18.0
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-12.8
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-12.6
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Current account balance (excl. large
projects)
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-7.6
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-9.0
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-15.0
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-9.4
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-7.7
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Gross international reserves
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In millions of US$
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1,319
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1440
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1,001
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1,161
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1,322
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In months of next year's imports
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4.7
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5.4
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2.9
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3.0
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3.3
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Memorandum items:
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GDP at current market prices
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Rwanda francs (billion)
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8,189
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9,121
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10,210
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11,476
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13,012
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Population (million)
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12.1
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12.4
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12.7
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13.0
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13.3
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Sources: Rwandan authorities and IMF
staff estimates.
1/ Overall deficit excl. spending on
materialized contingent liabilities and
other items already included in the
DSA.
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