Rwanda now in debt as the country borrowed fund to savage the shocking impact of the pandemic disease in the country. Last month alone, the nation had about $200 million debt.
Towards the end of 2018, Rwanda’s debt was calculated to be at $4.9 billion which made up 53.6% of their Gross Domestic Product. This was confirmed by Rwanda’s Ministry of Finance.
Both the World Bank and the International Monetary Fund stated that the debt is manageable and not up to the debt distress level.
As Rwanda tackles COVID-19, the nation has borrowed $109 million from the International Monetary Fund (IMF), $14 million from World Bank and from the United States $1 million which came in form of aids. The European Union also agreed to a $56 million grant. The African Development Bank through its Covid-19 Response Facility for African states also made available $10 billion that the Rwanda Government could make use of.
To reduce the government expenditure, salaries in April for majority of public officials were not paid. The debt distress is now more intense due to the abrupt halt in activities across Rwanda as a result of the outbreak. Tax collections and revenues from exports are suspended. Rwanda Air no longer functioning following stop in global travel, conferences were stopped and summits also this led to the loss of million of dollars.
Rwanda is part of the 25 countries to benefit from Debt relief from IMF. The country will receive about $11 million debt relief. G20 also announced a stop in debt service payments from world poorest country which Rwanda is a part of.
The country also received donation from Jack MA foundation which has saved the country expenses on purchasing masks, protective gears and even test kits.
Before the shocking outbreak of the virus in March, the country’s economy was growing on an average of 8% with IMF suggesting the growth may up to 8.5% in 2020 and 2021. However, as the world battles with the pandemic disease, the country’s growth forecast has been reduced to 5.1%
