By The Inspirer.

The International Monetary Fund (IMF) has agreed to provide Rwanda with $35.7 million through its Extended Credit Facility (ECF), supporting the government’s efforts to strengthen economic growth and stability.

The announcement followed the completion on October 6, 2026, of the first review of Rwanda’s ECF programme after discussions between the IMF and Rwandan authorities held from September 23 to October 6.

The disbursement still requires approval by the IMF Executive Board, which is expected to consider the request in December 2026. If approved, Rwanda will receive the $35.7 million to support its economic programme.

The IMF said Rwanda’s economy has remained resilient despite a challenging global environment. The economy grew by 9.7% in the first quarter of 2026, while export earnings and remittances from Rwandans living abroad helped narrow the gap between imports and exports.

However, inflation remains a major concern. The country’s inflation rate reached 15.7% in August 2026, significantly above the 5% target set by the National Bank of Rwanda.

The IMF also noted that Rwanda’s fiscal deficit had narrowed to 4.8% of gross domestic product in the 2025/26 financial year. It urged the government to continue strengthening domestic revenue mobilisation and carefully prioritise major projects financed through external resources.

Finance and Economic Planning Minister Yussuf Murangwa said Rwanda would continue using borrowing to finance development, but the government’s strategy was not to rely primarily on higher taxes to repay its debts.

Instead, he said, borrowed funds are being invested in projects expected to generate economic returns and strengthen the country’s capacity to repay.

Murangwa explained that Rwanda’s borrowing largely falls into two categories. About 90% consists of concessional loans, which often carry zero or very low interest rates, come with a grace period of around 10 years and can be repaid over periods of up to 30 or 40 years.

The remaining 10% comprises semi-concessional loans, which generally carry interest rates of between 1% and 2%. Murangwa said the government avoids borrowing at interest rates above 2.5% and mainly uses such loans for projects expected to begin generating returns relatively quickly.

He cited airport infrastructure as an example of a project that could generate revenue within a relatively short period. If the government borrows at an interest rate of around 2% and receives a three- to five-year grace period before repayments begin, he said, the project could be completed during that period and begin generating revenue that could help service the debt.