Via IMF (Den Internationale Valutafond)

IMF Staff Completes Virtual Review Mission to Rwanda

October 26, 2020

End-of-Mission press
releases include statements of IMF staff teams that convey preliminary findings
after a visit to a country. The views expressed in this statement are those of
the IMF staff and do not necessarily represent the views of the IMF’s Executive
Board. Based on the preliminary findings of this mission, staff will prepare a
report that, subject to management approval, will be presented to the IMF’s
Executive Board for discussion and decision

  • IMF staff had productive discussions with the Rwandan authorities and reached staff-level agreement on policies needed to complete the third review under the Policy Coordination Instrument (PCI).
  • After a sharp contraction in the second quarter of 2020 due to the COVID-19 pandemic lockdown, economic activity has started to recover, though downside risks are high.
  • The FY20/21 budget should continue to support the economic recovery while maintaining debt sustainability. The implementation of structural reforms needs to be fast-tracked.

Washington, DC: An International Monetary Fund
(IMF) mission, led by Haimanot Teferra, held virtual meetings with the Rwandan
authorities during October 5 – 23, 2020, to discuss the third review under the
PCI. At the conclusion of the mission, Ms. Teferra issued the following


“The IMF mission held productive discussions with the authorities and
reached staff-level agreement on policies needed to complete the third review
under the PCI. The successful completion of the review is subject to approval
by the IMF Executive Board. Consideration by the Board is tentatively scheduled
for mid-December 2020.


“Economic activity has started to show signs of recovery following a
sharp contraction in the second quarter of 2020 caused by the COVID-19 pandemic
and the stringent containment measures. The monetary and financial measures and
large fiscal package deployed in response to the crisis have played an important
and welcome role in supporting the economy. Given the size of external shocks
and the domestic shock caused by containment measures, real GDP growth is now
projected to contract to -0.2 percent in 2020 and rebound to 5.7 percent in
2021. However, the outlook remains highly uncertain at global level, reflecting
the unpredictable course of the pandemic and its related economic disruptions
in Rwanda and in trading partners. Inflation remained high, partly reflecting
supply disruptions, but it is expected to stay closer to the upper bound of the
National Bank of Rwanda inflation benchmark band in 2020. The banking system
has remained stable, liquid and well capitalized.


“Program performance has been affected by the pandemic. The associated
spending needs, and revenue losses have caused deviations from the earlier
fiscal targets under the program. Reform
targets, while well advanced, were partly hampered by the pandemic and the need
to divert resources to address its impact.


“Tax revenues have been stronger than expected at the time of the second IMF
emergency financing under the Rapid Credit Facility (RCF), but expenditures are
also expected to be higher, as the fiscal measures to support vulnerable
families and hard-hit firms were extended, and public investment execution will
be fast-tracked. In this context, the overall fiscal deficit is projected to be
8.5 percent of GDP in FY20/21, with public debt projected at 67 percent of GDP at


“The mission agreed with the authorities that the fiscal stance for
FY20/21 and FY21/22 has to strike a balance between sustaining the economic
recovery and maintaining fiscal responsibility. Given the economic impact of
the pandemic and the uncertain outlook, fiscal risks, including from public
corporations, public-private partnerships, and loan guarantees provided by the
government, need to be monitored and managed closely, and any support should be
provided transparently through the budget. The fiscal path in the post-COVID
period should bring debt level to 65 percent of GDP within a reasonable


“After some delays due to the pandemic, the implementation of structural
reforms needs to be accelerated to secure strong and stable growth in the
medium term. Ongoing efforts to strengthen domestic revenue mobilization,
fiscal transparency, and the monitoring and management of fiscal risks need to
be stepped up. Medium-term priorities to create conditions for faster private
sector growth, including promoting regional integration to increase market size
will be important.


“The mission is grateful for the authorities’ close cooperation.”


IMF Communications Department


Phone: +1 202 623-7100Email:


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