## IMF Executive Board Completes First Reviews Under the Policy Coordination Instrument, and Resilience and Sustainability Facility for Rwanda _IMF News, May 24, 2023_ ## Source details **Canonical URL:** [IMF Executive Board Completes First Reviews Under the Policy Coordination Instrument, and Resilience and Sustainability Facility for Rwanda](https://www.imf.org/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf) ## Other formats - [Markdown version](/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf/index.md) - [Structured JSON version](/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf/index.json) - [Bundle manifest](/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf/bundle-manifest.json) ## Bibliographic details - Published: May 24, 2023 --- ### Executive summary and disbursement - The Executive Board completed the first reviews of Rwanda’s Policy Coordination Instrument (PCI) and program under the Resilience and Sustainability Facility (RSF). - The Board’s decision allows for an immediate disbursement of SDR 73.95 million (about US$ 98.6 million) under the RSF. - The PCI and RSF arrangement were approved on December 12, 2022; the RSF total amount is SDR 240.3 million (about US$ 319 million or 150 percent of quota). ### Economic performance and risks - Rwanda’s economy recorded robust post-pandemic growth in 2022, but macroeconomic imbalances emerged. - Inflation stood at 17.8 percent in April. - Drivers of imbalances cited: - Rising food prices. - Strong domestic demand fueled by high credit growth. - Robust import demand coupled with high commodity prices. - Tightening global financing conditions and reduced prospects for external concessional financing. - The outlook is subject to high uncertainty from: - Risks of deepening geopolitical fragmentation. - Volatility in global energy and fertilizer prices. - A steeper-than-projected decline in trading partners growth. - A funding squeeze. - The costs of humanitarian response and reconstruction following recent floods will generate further spending needs. ### Policy priorities and recommendations - Immediate policy priorities: - Implement a strong, carefully calibrated policy mix to prevent macroeconomic imbalances from becoming entrenched. - Fiscal policy: - Frontloaded fiscal policy adjustment is needed. - Continued fiscal consolidation to provide space to withstand future shocks. - Address delays in implementing the Medium-Term Revenue Strategy by promptly implementing revenue-raising measures aimed at broadening the tax base, streamlining exemptions, and enhancing tax compliance. - Adopt more prudent, transparent, and credible public financial management and investment frameworks. - Monetary and exchange rate policy: - Decisive monetary policy tightening is needed to contain inflationary pressures and preserve external stability. - Strengthen communication and pursue greater exchange rate flexibility. - Implement reforms to deepen financial and government securities markets to improve the effectiveness of the interest rate-based monetary policy framework. - Financial sector and governance: - Vigilance to ensure financial risks remain contained while promoting financial inclusion. - Further strengthening of the AML/CFT framework is important. - Climate and resilience: - Continue reforms to allocate climate resources more effectively and transparently to mobilize additional climate funding and attract private green investment. - Advance reforms in green public finance management and climate-focused public investment management. - RSF-supported program will improve transparency and accountability in planning, execution, reporting, and oversight of budget resources dedicated to addressing climate change. ### Program implementation and commitments - Reforms remained broadly on track under the PCI despite a challenging environment. - Rwanda’s commitment to advancing the climate agenda has been described as very strong. - The RSF-supported program is the first for an African country and aims to build resilience to climate change through improved fiscal transparency and accountability for climate resources. ### Key economic indicators (Table 1: Rwanda: Selected Economic Indicators, 2021–25) - Output - Real GDP growth (%): 2021: 10.9; 2022: 8.2; 2023: 6.2; 2024: 6.7; 2025: 6.9 - Prices - Inflation - average (%): 2021: 0.8; 2022: 13.9; 2023: 14.5; 2024: 5.0 - Central government finances (fiscal year)1 - Revenue (% GDP): 2021: 25.0; 2022: 25.9; 2023: 22.7; 2024: 21.8; 2025: 22.9 - Expense (% GDP): 2021: 20.3; 2022: 20.6; 2023: 19.1; 2024: 18.5; 2025: 18.1 - Net acquisition of nonfin. Asset (% GDP): 2021: 12.2; 2022: 11.6; 2023: 9.8; 2024: 9.0; 2025: 9.4 - Fiscal balance (% GDP): 2021: -8.6; 2022: -7.6; 2023: -7.3; 2024: -6.5; 2025: -4.8 - Public debt (% GDP): 2021: 73.4; 2022: 67.1; 2023: 69.1; 2024: 74.4; 2025: 79.2 - External public debt (% GDP): 2021: 54.6; 2022: 48.7; 2023: 54.1; 2024: 60.9; 2025: 68.6 - Money and credit - Broad money (% change): 2021: 17.1; 2022: 22.5; 2023: 11.3; 2024: 17.4; 2025: 12.4 - Credit to private sector (% change): 2021: 14.8; 2022: 13.6; 2023: 8.5; 2024: 17.7; 2025: 21.0 - Policy Rate, end-of-period (%): 2021: 4.5; 2022: 6.5; 2023: … - Balance of Payments - Current account (% GDP): 2021: -11.2; 2022: -9.8; 2023: -11.3; 2024: -10.5; 2025: -10.1 - Reserves (in months of imports): 2021: 5.1; 2022: 4.4; 2023: 4.8; 2024: 5.2 - Exchange rate - REER (% change): 2021: -9.7; 2022: 8.3 1 Based on fiscal year (i.e. 2022 represents 2021/22). Sources: Rwandan authorities and IMF staff estimates. *IMF Press Release, May 24, 2023.* --- ## References - [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg) - [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx) - [PRESS CENTER](http://presscenter.imf.org/) - [Rwanda and the IMF](http://www.imf.org/external/country/RWA/index.htm) - [IMF-World Bank Debt Sustainability Framework for Low-Income Countries -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/imf-world-bank-debt-sustainability-framework-for-low-income-countries) - [Press Releases](https://www.imf.org/en/news/searchnews) - [approved](https://www.imf.org/en/News/Articles/2022/12/12/pr22426-imf-executive-board-approves-319-million-arrangement-for-rwanda) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/05/24/pr23176-rwanda-imf-exec-board-completes-1st-rev-policy-coord-inst-rsf_