WASHINGTON (XOL Africa) — The International Monetary Fund has reached a staff-level agreement with Rwanda on economic policies and reforms needed to complete the first review of the country’s Extended Credit Facility arrangement, potentially unlocking about $35.7 million in financing.
The agreement, reached after IMF staff held discussions with Rwandan authorities from Sept. 23 to Oct. 6, is subject to approval by IMF management and the IMF Executive Board. The board is expected to consider the review in December.
If approved, Rwanda would gain access to 26.433 million special drawing rights, equivalent to about $35.7 million, under the IMF-supported program.
“Rwanda’s economy remained resilient despite recent shocks, growing by 9.7 percent in the first half of 2026,” said Albert Touna Mama, the IMF mission chief for Rwanda.
Strong export and remittance inflows helped narrow Rwanda’s current account deficit, while foreign exchange reserves remained at a level equivalent to about four months of imports, the IMF said.
However, inflation has become a major concern. Headline inflation reached 15.7% in August, well above the National Bank of Rwanda’s medium-term target of 5%, driven by existing domestic price pressures as well as higher international oil and fertilizer prices.
“With inflation still elevated, the National Bank of Rwanda has tightened monetary policy,” Touna Mama said. “Going forward, an appropriately tight, data-driven monetary policy stance remains important to prevent those increases from spreading more broadly through the economy and to guide inflation toward the NBR’s medium-term target of 5 percent.”
The IMF said Rwanda’s performance under the program has been satisfactory, with all end-June quantitative performance criteria met.
The government is also advancing structural reforms aimed at strengthening the investment framework and deepening the domestic securities and foreign exchange markets.
Because inflation exceeded the program’s consultation band, the IMF’s Monetary Policy Consultation Clause will be discussed by the Executive Board.
Rwanda’s fiscal performance was also described as robust, with the fiscal deficit falling to 4.8% in the 2025/26 financial year.
The IMF said stronger tax collections and the full pass-through of higher international prices to fuel pump prices helped limit fuel subsidies.
It warned, however, that continued fiscal consolidation would be necessary to maintain Rwanda’s moderate risk of debt distress and rebuild fiscal buffers.
The IMF called for stronger domestic revenue mobilization, including through Rwanda’s expected second Medium-Term Revenue Strategy, as well as careful prioritization of foreign-financed capital spending while protecting social and other priority expenditures.
The fund also recommended improvements in public investment management and closer monitoring of fiscal risks.
Despite the challenges, the IMF expects Rwanda’s economy to continue expanding, projecting real GDP growth of 7.8% in 2026 and 7% in 2027.
Risks to the outlook include volatility in global commodity prices, increased trade and geopolitical tensions, climate shocks associated with El Niño and tighter global financing conditions.
The IMF identified a potential upside from Rwanda’s new petroleum procurement framework, led by the Rwanda National Energy Company, which it said could improve fuel supply security and make procurement costs more competitive.
“The IMF will continue to support Rwanda’s efforts to preserve macroeconomic stability, reduce inflation, and advance priority reforms,” Touna Mama said.
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