Press Release No. 15/494

Press Release: IMF Staff Completes Review Mission to Rwanda

November 4, 2015

An International Monetary Fund (IMF) team, led by Ms. Laure Redifer, IMF Mission Chief for Rwanda, visited Kigali from October 21-November 4, 2015 to carry out discussions with the Rwandan authorities on the fourth review of their economic and financial program supported by the IMF’s Policy Support Instrument (PSI).¹ The PSI-supported program for Rwanda was approved by the IMF Executive Board on December 2, 2013 (see Press Release No. 13/483).

Ms. Redifer issued the following statement at the end of the visit:

“Rwanda’s economic performance in 2015 has been stronger than expected, with growth in the first half of the year averaging 7.3 percent. Construction and other services performed particularly strongly, while agriculture and manufacturing grew roughly in line with expectations. Projected real GDP growth for 2015 has been revised upward, from 6.5 to 7.0 percent. Consumer price inflation increased in September due to higher food and utility prices and the depreciation of the Rwandan franc against the US dollar, but is forecast to remain below 5 percent for 2015.

“Policy performance through end-June 2015 was consistent with the program framework, with almost all quantitative objectives reached. Significant progress was made on structural reforms, most notably on tax policy and administration. Planned reforms of the regime for agricultural taxes and for publishing quarterly reports on budget execution, however, are taking somewhat longer than originally anticipated.

“Looking forward, the risks to the economic outlook have increased, in light of lower global commodity prices and weaker growth prospects in Rwanda’s main export markets. Mining activity in Rwanda has already been affected, with exports for 2015 and the near term forecast to drop substantially. This will put pressure on the balance of payments and the mission expects economic growth in 2016 to moderate to 6-6.5 percent, compared to 7 percent as previously anticipated.

“The mission welcomes the readiness of the authorities to take steps to tighten economic policies in response to the weaker external position and encourages them to continue to exercise exchange rate flexibility. The mission also welcomes the authorities’ ambitious program of forward-looking structural reforms aimed at strengthening the efficiency of public investment spending; improving tax compliance; broadening the tax base; and reinforcing accountability for budget execution. The IMF’s Executive Board is expected to consider the 4^th PSI review by mid-January 2016.

“The mission met with Minister of Finance and Economic Planning Amb. Claver Gatete, Governor of the National Bank of Rwanda Hon. John Rwangombwa, Minister of Trade and Industry Hon. François Kanimba, and other senior government officials, development partners, and private sector representatives. The mission thanks the authorities for their hospitality, as well as the fruitful and collaborative discussions.”

¹ The PSI is an instrument of the IMF designed for countries that do not need balance of payments financial support. The PSI helps countries design effective economic programs that, once approved by the IMF's Executive Board, signal to donors, multilateral development banks, and markets the Fund's endorsement of a member's policies (see http://www.imf.org/external/np/exr/facts/psi.htm). Details on Rwanda’s current PSI are available at www.imf.org/rwanda.