The government is upbeat about Fitch Rating, maintaining Rwanda’s local currency issuer default ratings at ‘B+’ saying that it is a vote of confidence in the management of the economy. Last Friday, Fitch Rating maintained Rwanda’s local currency rating at ‘B+’ indicating a stable outlook following an analysis of the economic outlook. Issuer default ratings show an entity’s relative vulnerability to default on financial obligations and also address relative vulnerability to bankruptcy, administrative receivership or similar concepts. Fitch said they were optimistic that though the current account deficit will worsen in 2016 as a percentage of GDP compared to 2015, they expect it to improve substantially in 2017. “Other factors the rating firm singled out as backing up a stable rating were low and stable inflation contrasting with high economic growth, government debt/GDP that is lower than the average for a country with its rating, continued reforms supported by the IMF and strong governance indicators,” the rating agency noted in a media statement. Commenting on the development, Finance and Economic Planning Minister Claver Gatete said though Rwanda’s rating was maintained at ‘B+’, this was “a vote of confidence in the leadership and management of the economy”. “This is a vote of confidence in our leadership, especially in the management our economy based on various indicators, including low debt, low inflation, stable and high growth, governance, fiscal and financial reforms, and other government policies,” Gatete told The New Times. He said such a rating ought to give confidence to investors, donors and others that Rwanda is an ideal place to invest. “In addition, it is a signal that the risk of investing in Rwanda is low, and also translates into lower cost of borrowing by government,” he said.
