Agriculture production and commercialisation contributed 32 per cent of Rwanda’s consumption growth over the past 10 years, a new World Bank report has indicated.

According to the World Bank’s ‘Africa Pulse’ report 2014, released yesterday, Rwanda has registered significant growth and poverty reduction over the last decade.

Other contributing indicators included decreased dependency ratio at 12 per cent, non-farm self employment 15 per cent, non-farm wage employment 12 per cent, transfers and remittances 12 per cent with other factors accounting for 17 per cent.

Consumption growth is the annual percentage growth in household consumption expenditure per capita.

Despite Rwanda registering an average GDP growth of 8 per cent per year since 2001, each 1 per cent increase in consumption was associated with only a 0.8 per cent decrease in poverty.

As a result, the country has experienced a period of rapidly increasing agricultural productivity as well as diversification into non-farm activities.

Efforts to increase agriculture productivity are ongoing, according to Tony Sanganira, the State Minister for Agriculture.

"We are now giving more subsidies to farmers on top of investing in rural infrastructure to boost the sector,” Sanganira told The New Times in an earlier interview.

Latest statistics indicate that the sector grew by 5 per cent and contributed 33 per cent of the GDP which expanded by 6.1 per cent during the second quarter of 2014.

According to the World Bank, significant public investment in infrastructure, increased agricultural production and expanding services in African retail, telecoms, transportation, and finance, are expected to continue to boost growth in the region.

Meanwhile, with regional GDP growth projected at 5.2 per cent yearly in 2015-16, from 4.6 per cent in 2014, Africa is forecast to remain one of the world’s three fastest growing regions and to maintain its impressive 20 years of continuous expansion.

According to Francisco Ferreira, the World Bank’s Chief Economist for Africa, downside risks that require enhanced preparedness include rising fiscal deficits in a number of countries; economic fallouts from the activities of terrorist groups such as Boko Haram and Al-Shabaab and, most urgently, the onslaught of the Ebola epidemic in West Africa.

Ebola and its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states of Guinea, Liberia and Sierra Leone.

Output shares of manufacturing and agriculture are declining across the region despite extractive industries in the natural resources sector and a surging services industry propelling Africa’s growth.

Growth trends

Despite headwinds, medium-term growth prospects for Sub-Saharan Africa remain favourable.Regional Gross Domestic Product (GDP) growth is projected to increase at a rate of 5.2 per cent during 2015–16 from 4.6 per cent in 2014, and to rise to 5.3 per cent in 2017.

"Nearly two decades of strong growth is transforming Africa’s economies, but the structural change is not what the world expected. The majority of Africa’s jobs continues to be in agriculture and is surging into services but not into industry and manufacturing,” says Punam Chuhan-Pole, a World Bank Lead Economist for Africa and co-author of Africa’s Pulse.

The good news is that in Africa, the growth in agriculture and the services sector has been more effective in reducing poverty than growth in industry. In the rest of the world, by contrast, industry and services have a larger impact on reducing poverty.