Moody's Ratings Revises Rwanda’s Outlook to Stable; Affirms B2 Rating

Moody's Ratings has revised the outlook on Rwanda to stable from negative and has affirmed its long-term issuer ratings at B2.

The decision to revise the outlook to stable is driven by the agency’s assessment that key downside risks have diminished. This improvement is supported by ongoing, internationally brokered discussions between Rwanda and the DRC, which have yielded a peace agreement and a framework for future economic cooperation. Moody’s expects that longstanding regional tensions are unlikely to escalate into a direct, full-scale military conflict that would limit Rwanda’s access to concessional financing. Furthermore, external funding has remained robust and is likely to continue supporting the country's external position.

The affirmation of the B2 rating reflects Rwanda's strong growth prospects and its solid track record of effective policy execution provide key support to the rating. The structure of the government's debt, combined with reliable access to concessional financing from development partners, continues to limit near-term liquidity risk.

The rating also incorporates the fiscal and debt risks associated with Rwanda’s large investments in the aviation sector. However, Moody's noted that these risks are mitigated by the government’s demonstrated capacity for fiscal adjustment and the recent approval of tax reforms, which enhance domestic revenue generation and provide fiscal flexibility.

The stable outlook indicates that risks are now broadly balanced. This assessment is based on Moody's expectation that regional tensions will not reignite significantly and that Rwanda's institutional strength and proven access to external financing will continue to support its credit profile against prevailing challenges.