Rwanda receives $268m IMF support for climate challenges
The International Monetary Fund (IMF) has approved the disbursement of $268 million to support Rwanda in addressing structural challenges caused by climate change shocks amongst others.
The disbursement forms part of the second tranche of the IMF’s Resilience and Sustainability Facility (RSF) under which an initial sum of $319 million was approved in December 2022. This constituted the first instalment of the comprehensive 14-month financing under the Standby Credit Facility (SCF) for the country, New Times reports.
“Despite the challenging environment, macroeconomic policy performance remained broadly in line with program objectives under the PCI. Progress on the climate agenda under the RSF arrangement remains exceptionally strong…Rwanda’s commitment to building a resilient and greener economy is commendable and should be sustained. Enhancing social protection programs, improving human capital accumulation, and promoting private sector-led economic diversification will be critical to navigate challenging times and advance living standards,” Deputy Managing Director, and Acting Board Chair at the IMF said.
The IMF further maintains that the reforms are focused on implementing policies to ensure macroeconomic stability and address the impacts of the pandemic, aiming to build socioeconomic resilience against shocks and provide safeguards against potential risks.
The adjusted policy mix, therefore, is anticipated to enhance external reserves, control inflation, and enhance debt sustainability. However, the IMF forecasts a moderation in growth, declining from 8.2 per cent in 2022 to 6.2 per cent and 6.6 per cent in 2023 and 2024, respectively. This shift is attributed in part to ongoing fiscal consolidation and the implementation of stringent monetary and exchange rate policies, the IMF detailed in a report.
