Rwanda’s credit rating affirmed at ’B+/B’ with stable outlook: S&P
Investing.com -- S&P Global Ratings has affirmed Rwanda’s credit ratings at ’B+’ long-term and ’B’ short-term for both foreign and local currency, with a stable outlook.
The rating agency’s decision, announced Friday, balances Rwanda’s regional security risks and fiscal vulnerabilities against its resilient economic growth and highly concessional debt structure.
Rwanda’s economy grew by 7.2% in the first half of 2025, with agriculture expanding 6%, industry 6%, and services 9%. S&P forecasts real GDP growth to average over 7% annually from 2025-2028, supported by public infrastructure investments.
Despite strong growth, Rwanda faces challenges as a landlocked country with low per capita income, which is projected to average $1,200 over 2025-2028. The economy remains vulnerable to regional instability, particularly tensions with the Democratic Republic of Congo (DRC).
A U.S.-brokered peace agreement was signed between Rwanda and the DRC on June 27, 2025, but implementation has been slow. Rwandan troops have not withdrawn from eastern DRC, and the M23 rebel group remains outside the agreement. The UN reported that M23 rebels killed at least 319 civilians in North Kivu between July 9 and July 21, 2025.
Rwanda’s external financing needs related to the $2.6 billion New Kigali International Airport (NKIA) project could strain its fiscal position. The government plans to borrow $1.2 billion over 2025-2028 to recapitalize RwandAir and finance the airport construction, with Qatar maintaining a 60% stake in the project and acquiring a 49% stake in RwandAir.
Public debt stood at 74.8% of GDP as of June 30, 2025, compared to 69.6% a year earlier. About 82% of this debt is external and primarily concessional (88% of external debt), while 18% is domestic. The debt has an average maturity of 19 years, with 70% of external debt on fixed-rate terms.
S&P expects Rwanda’s current account deficit to peak at 14.7% of GDP in 2026 before moderating to 11% by 2028, partly due to import requirements for the NKIA project. Foreign currency reserves reached $2.4 billion by end-2024 but fell to $2.2 billion in 2025.
Inflation averaged 6.3% for the first nine months of 2025, up from 4.8% in 2024. The National Bank of Rwanda raised its policy rate by 25 basis points to 6.75% in August 2025, citing upward inflation risks.
S&P could lower Rwanda’s ratings if access to concessional financing significantly deteriorates or if regional security tensions re-escalate. Conversely, ratings could improve if balance of payments and fiscal vulnerabilities moderate substantially.
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