Country Summary

Macroeconomic performance: Real GDP growth reached 6.1% in 2017 and was esti- mated at 7.2% in 2018, supported by strong growth in services (4.1%) and industry (1.5%), particularly man- ufacturing. The key drivers of spending in 2018 were household consumption (5.8% of GDP) and investment (2.9%). The fiscal deficit was an estimated 4.3% in 2018, down from 4.8% in 2017, thanks to increased invest- ment (from 23.4% of GDP in 2017 to 25.3% in 2018) and reduced grants, despite strong tax collection driven mainly by improved tax compliance and the introduction of an electronic tax payment system. Public sector debt increased to 41.1% of GDP in 2018 from 35.6% in 2016, but risk of debt distress remains low. With inflation low and the exchange rate relatively stable, monetary policy continued to be accommodative in 2018.
Inflation was estimated at 0.9% in 2018, much below the 8.2% in 2017, thanks to the lower cost of food and non- alcoholic beverages. The exchange rate remained relatively stable throughout 2018. In 2018, the foreign exchange rate pressures on the Rwandan franc remained modest due to continued improvements in the external sector resulting from a 15.8% increase in exports and a 1.4% increase in imports. The currency depreciated by 1.4% against the US dollar in 2017, far below the 9.4% in 2016.
The current account deficit widened to an estimated 8.4% in 2018 from 6.8% in 2017 due partly to a dete- rioration in the terms of trade to –3.6% in 2018 from 7.7% in 2017. Goods exports increased sharply by 29% and imports by 14.9% between January and May 2018, compared with the same period in 2017.

Tailwinds and headwinds: The economy is projected to grow at 7.8% in 2019 and 8.0% in 2020, supported by export growth resulting from the Made in Rwanda policy, continued public investments such as the Bugesera airport, and the country’s strong record of implementing reforms to achieve its long-term development goals. Inflation is projected to edge up to about 4.0% in both 2019 and 2020. Fiscal policy will con- tinue to aim at prudent borrowing and fiscal consolidation to keep debt sustainable. The fiscal deficit is projected to reach 4.4% of GDP in 2019 but to decline to 3.6% in 2020, reflecting prudent borrowing and increased domestic resource mobilization. Rwanda’s economy has enjoyed a good governance buildup that has allowed for great strides toward deeply entrenched and respected good governance principles and toward structural transfor- mation facilitated by broad-based growth. The country’s bold policy reforms present an opportunity for increased investment and job-creating growth. In terms of social developments, Rwanda has translated its strong growth into reduced poverty and improved equality. The poverty rate fell from 56.7% in 2005/06 to 39.1% in 2013/14, while income inequality, as measured by the Gini coefficient, decreased from 0.52 to 0.45.
Given the drought in 2016 and 2017, Rwanda’s high reliance on rain-fed agriculture poses a risk to its economic outlook. Diseases and pests, such as the bronze bug and the fall armyworm in maize, could also reduce agricultural production. Rwanda’s suspension from the African Growth and Opportunity Act, follow- ing its decision to ban secondhand clothes and shoes, could depress exports and thus growth prospects if the growth momentum in tourism and mining receipts is not sustained. Finally, an oil price increase could raise the country’s import bill.
Insecurity and instability in the Great Lakes Region, particularly the civil unrest in neighboring Burundi and the ongoing violence and Ebola outbreak in eastern Demo- cratic Republic of Congo, remain a source of fragility for Rwanda. Increased violence is likely to affect Rwanda’s trade because Democratic Republic of Congo and the Great Lakes Region are among the country’s major trade partners. Rwanda also needs to improve its savings rate, which is low compared with regional peers—around 13% of GDP, well short of its investment rate of 26%.

Source: African Economic Outlook 2019

Fixed Income


Guide to Buying Bonds

Procedures for market participation

The National Bank of Rwanda (NBR) announces upcoming auctions four days in advance. Banks and financial institutions are eligible to participate provided they opened an account an investment account with a stockbroker or at the Central Bank. All other investors must contact their commercial banks and receive approval from the Central Bank before participating.


Interest earned on fixed-income securities is subject to a 15% withholding tax; a 5% reduction is available on interest earned on Treasury bonds of 3 years or more.

Settlement cycle

Settlement cycle is T+2.

Market restrictions

Openness to international investors

The investment climate in Rwanda has drastically improved in recent years. The government has made great strides in improving the business environment, particularly with respect to entrepreneurial activities. It now takes 3 days to start a business, when it takes an average 45.6 days in other Sub-Saharan countries (the average for OECD nations is 13 days and 5.7 procedures).

Capital controls

There are no capital controls in Rwanda.

Foreign exchange controls and profit repatriation

Rwanda has a floating exchange rate regime in which the Rwandan franc is maintained within a narrow range against the US dollar. Foreign investors can freely repatriate profits, dividends, royalties and interest payments.

There is no difficulty in obtaining foreign exchange, or transferring funds; it is to be noted however that transfers over $20,000 require documentation to comply with the stipulations of anti-money laundering regulations (the regular transfer time is 3 days).

Credit Rating

In 2014, Fitch upgraded the foreign and local long term issuer default ratings from B to B+. On September 2015, S&P has confirmed the B+ rating on Rwanda debt and given it a stable outlook.

List of Primary Dealers

There are no primary dealers in Rwanda.

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