Despite external pressures, Rwanda is expected to record robust economic growth this year. However, climate change and inflation, which reached 15.9 percent in August, are risks that Kigali is trying to mitigate.

Rwanda has secured a preliminary agreement with the International Monetary Fund (IMF) for a new economic program, the institution announced on Thursday, October 6.  

The agreement is for a "36-month Policy Coordination Instrument (PCI) and Resilience and Sustainability Facility, with a requested access of 150 percent of quota (SDR 240.3 million)," the fund explains. 

The aim is to support Rwandan authorities in their efforts to build on the progress of macroeconomic, fiscal, and financial reforms begun a few years ago, while accelerating efforts to build resilience to climate change.

“Discussions on reform priorities under the PCI focused on strengthening the fiscal framework, sustaining the implementation of a credible and effective forward-looking monetary framework, and mitigating pandemic scars, while building resilience against future shocks. The authorities would need to maintain macroeconomic stability and reinforce their policy frameworks, while pushing ahead with structural reforms to deliver more inclusive, resilient, and sustainable growth," said Haimanot Teferra, the IMF's country mission chief.

The announcement comes as Rwanda, like many African countries, faces external economic pressures that have pushed its inflation rate to nearly 16% in August. Although measures have been taken, the IMF says that “addressing high inflation, long-term development needs, and emerging climate risks, remain a policy challenge in a highly volatile global environment.”  Nevertheless, the country is likely to achieve strong growth this year. 

Let’s note that the preliminary agreement (staff-level agreement) needs to be approved by the board before becoming effective. According to the IMF team that visited Kigali, it would be submitted to the board by December.  

Moutiou Adjibi Nourou