By Elias Hakizimana
Rwanda’s economic growth was expected at 6.2 percent in 2017 from 5.9 percent last year, but this year’s economic performance might go down even further to 5.2 percent, according to economists from the International Monetary Fund (IMF), and the Central Bank of Rwanda.
The growth of 6.2 percent would depend on the agriculture sector and increase of exports, the sectors that contribute to narrowing the country’ trade deficit — the situation where the country’s exports value is less than its imports value.
The decision to revise this projection was reached during an evaluation of the first phase of this year’s economic performance by IMF and the Government of Rwanda.
IMF organized the team which is currently in Rwanda to assess the economy’s performance so that to proceed by further country’s economic projections by next week.
IMF Deputy Division Chief Laura Redifer said yesterday that the new projections will come out following the results from discussions with Rwandan government.
“We are discussing the revision downward, from 6.2 per cent to 5.2 per cent, because growth was modest in the first half of the year,” said Redifer.
Among the reasons to revise the projections is the drought’s consequences on agriculture production last year and the construction sector which also did not perform as the previous year.
“This was due to a number of effects such as drought in 2016 and its effects in 2017. It was [also] due to construction in 2016 that was not repeated in 2017. It was hard to have construction grow like it did in the year before. This factor as well as external factors affected the growth rate in the first half of the year,” Redifer said.
Despite the reduction, Rwandan economy is rising significantly among the sub-Sahara African countries as, overall, this region’s economic growth is expected to rise to 2.7 percent from 1.4 last year.
During the first quarter this year, economic growth rose to 1.7 percent comparing to 8.9 percent for the last year’s same quarter.
Between April-June of the second quarter last year, the growth rose to 4 percent, accelerated by agriculture and services sectors.
In September last year, Aghassi Mkrtchyan, an official in charge of economy in World Bank, said that the Rwandan economy projection is rising significantly but difficult to reach to 6.2 percent.
The Minister for Finance and Economic Planning Claver Gatete said that the country has made assessments to ensure that there are investments and efforts in areas that will accelerate growth in coming years such as Tourism, Mineral, Human Capital, Science and Technology as well as the financial services.
Gatete pointed that the price reduction for minerals also contributed to lowering Rwandan economy projection last year.
“We expect Rwanda’s economy to grow from 5 to 6 percent this year, we can see that the future is bright basing on the strategies of the country in developing its economy,” Gatete said.
According to John Rwangombwa, Central Bank governor, Rwanda expects higher growth of gross domestic product (GDP) in the quarter 3 of next year 2018.
Basing on the performance of international trade, Rwangombwa said that Rwanda has reduced the trade deficit which was a key challenge to development performance.