S&P Global has reaffirmed Rwanda’s credit rating at B+ with a stable economic outlook, highlighting the country’s robust economic growth, governmental initiatives to boost domestic revenue, and prudent expenditure management.
The rating agency emphasized Rwanda’s advantageous debt structure, which consists of concessional loans with extended repayment periods, resulting in significantly lower debt servicing costs compared to countries with similar credit ratings. Interest expenditure is projected to average 9.1% of government revenue from 2024 to 2027.
S&P Global’s assessment reflects Rwanda’s anticipated strong economic performance. The economy expanded by 8.2% in 2023, with growth accelerating to 10% year-on-year in the fourth quarter of 2023 and maintaining a similar pace in the first quarter of 2024. While agricultural output was sluggish in 2022 and early 2023, favorable weather conditions are expected to normalize production. Additionally, sustained growth in the services sector is set to catalyze increased private sector engagement.
The agency also noted Rwanda’s susceptibility to climate change and weather-related disruptions, citing significant flood damage in 2023. However, it commended the government’s swift response with infrastructure rehabilitation projects and enhanced preparedness measures to mitigate potential future shocks.
Despite vulnerabilities to balance-of-payments challenges and regional security threats, Rwanda’s diminishing fiscal deficits, sustained growth trajectory, and continued access to cost-effective concessional funding support the stable outlook.
S&P Global’s reaffirmation of Rwanda’s credit rating underscores the country’s proactive economic policies, strong growth prospects, and resilience, positioning it favorably for continued economic stability and progress.
