The approval includes an immediate disbursement of around $35.7 million, which will support Rwanda’s ongoing efforts to stabilise the economy while protecting priority social and development spending and rebuilding fiscal and external buffers.
Rwanda’s economy has shown strong resilience in recent years, with growth reaching 9.4% in 2025, significantly exceeding expectations. This performance has been driven by robust exports, particularly in coffee and minerals, alongside continued investment activity. However, inflation has risen sharply in 2026, reaching 13.2% year-on-year in April, well above the central bank’s target range.
Despite improvements in the external position, pressures remain. Imports have stayed elevated, reflecting demand for equipment and business inputs, while foreign exchange reserves have remained relatively stable, covering just over four months of imports.
The IMF warned that the global environment has become more challenging, with uncertainty linked in part to geopolitical tensions, including the war in the Middle East. These developments have contributed to higher oil and fertiliser prices, placing additional strain on Rwanda’s fiscal position and current account. Growth is expected to moderate to below 6.8% in 2026 as these pressures take hold.
The new IMF-supported programme is structured around three main priorities. These include strengthening macroeconomic policies, managing fiscal and debt risks, and promoting private sector-led growth. The programme also aims to support Rwanda’s broader reform agenda while ensuring stability during a period of external shocks.
IMF Deputy Managing Director and Acting Chairperson Bo Li said Rwanda’s strong policy framework and reform track record have helped the economy withstand multiple shocks. However, Li said the country now faces increased risks due to tighter global financial conditions, reduced development assistance and ongoing inflationary pressures.
The IMF emphasised the importance of maintaining a balanced policy approach, including greater exchange rate flexibility to support external adjustment. It also highlighted the need for a credible medium-term fiscal consolidation strategy to reduce imbalances while safeguarding essential social spending.
Revenue mobilisation, improved public investment management and better oversight of fiscal risks, particularly those linked to state-owned enterprises, were identified as key areas for reform. The IMF also stressed that any support measures introduced in response to global shocks should be targeted and temporary.
On the monetary side, the IMF underscored the need for a firm and forward-looking stance to address inflation. Strengthening communication around policy decisions and reinforcing the credibility of the inflation target were highlighted as important steps to anchor expectations.
The IMF added that while Rwanda’s financial sector remains stable, rapid credit growth and concentrated exposures require close monitoring to prevent potential risks.
Structural reforms remain central to the programme, with a focus on improving public sector efficiency, strengthening institutions and accelerating reforms in state-owned enterprises. These measures are expected to enhance economic resilience and create conditions for sustained private sector growth.
The IMF said the programme, supported by Rwanda’s policy commitments and continued engagement with development partners, provides a strong framework to manage current challenges while maintaining long-term development objectives.
–IMF/ChannelAfrica–
