S&P Global, a leading global rating agency, has affirmed Rwanda’s credit rating at B+ with a stable economic outlook, following a comprehensive assessment. This decision reflects Rwanda’s robust economic growth projections, effective governmental initiatives aimed at enhancing domestic revenue, and prudent expenditure management.
The stable outlook by S&P Global considers Rwanda’s vulnerabilities, such as balance-of-payments challenges and regional security threats, against the backdrop of diminishing fiscal deficits, a consistent growth trajectory, and continued access to cost-effective, concessional funding.
In their statement, S&P Global highlighted Rwanda’s favorable debt structure, consisting predominantly of concessional loans with extended repayment periods, resulting in significantly lower debt servicing costs.
These costs are projected to average 9.1% of government revenue from 2024 to 2027, markedly lower than those of countries with similar credit ratings.
Looking ahead, S&P Global forecasts that Rwanda will outperform its peers in economic growth over the next five years, driven by substantial public investments.
In 2023, Rwanda’s economy expanded by 8.2%, with year-on-year growth accelerating to 10% in the fourth quarter of 2023 and maintaining a similar pace in the first quarter of 2024.
Although agricultural output grew slowly in 2022 and early 2023, favorable weather conditions are expected to normalize production. Additionally, the services sector’s sustained growth is set to increase private sector engagement.
However, S&P Global acknowledges Rwanda’s susceptibility to climate change and weather-related disruptions, noting the significant damage caused by floods in 2023.
The agency commended the government’s swift response, which included infrastructure rehabilitation projects and enhanced preparedness measures to mitigate potential future shocks over the coming four years.
S&P Global’s reaffirmation of Rwanda’s credit rating underscores the country’s proactive economic policies, strong growth prospects, and resilience in the face of challenges. This positions Rwanda favorably for continued economic stability and progress.
