Rwanda gets $109m IMF fund to fight coronavirus

Rwanda's fight against coronavirus has been boosted with $109 million credit from the International Monetary Fund (IMF), which is expected to help in softening the economic impact of the pandemic.

The funds will “serve to meet Rwanda’s urgent balance of payment needs stemming from the outbreak of the Covid-19 pandemic.”

“The IMF emergency support under the Rapid Credit Facility will help with Covid19-related pressures on trade, tourism and foreign exchange reserves, and will provide much-needed resources for health expenditure and for households and firms affected by the crisis. It should also help to catalyse donor support," said Tao Zhang, IMF Deputy Managing Director.

The global lender said that while the Covid-19 pandemic is quickly unfolding, with the near-term outlook deteriorating quickly, Rwandan authorities had acted fast by putting in place measures to help contain and mitigate the spread of the disease.

“A temporary widening of the budget deficit is appropriate to mitigate the health and economic impact of the pandemic. Spending should be well-targeted and cost-effective to not crowd-out other priority areas,” IMF said.

It also advised that once the crisis abates, Rwanda should adjust its fiscal policies to preserve debt sustainability in the medium-term, and contingency plans should be prepared given the uncertain outlook.

Reacting on the development, Rwanda’s Central Bank Governor, John Rwangombwa, said Kigali was "grateful for the quick approval of this support."

"Together we shall overcome this pandemic and mitigate its negative impact," said Mr Rwangombwa.

Last week, Rwanda received $1 million from the American government to fight the virus pandemic.

The country implemented a countrywide lockdown last month and extended it by a further two weeks till mid-April in the face of rising coronavirus cases.

The lockdown has all but stagnated the economy by freezing major economic activities, grounding both air and road transport and closed the borders, as well as putting a halt on conference tourism, which the government has prioritised as its major cash cow.

The situation created an urgent balance of payments need, and the uncertainties surrounding the duration and spread of the pandemic, the economic fallout could intensify further, IMF warns.

Rwanda has as at Friday recorded 82 cases of coronavirus.