The total value of goods and services produced in the economy between April and June amounted to more than Rwf1.4 trillion, an increment of Rwf7bn on what was recorded in the same period last year, new figures from the National Institute of Statistics Rwanda (NISR) shows.

Yusuf Murangwa, the director-general of NISR, said the new numbers mean the country’s Gross Domestic Product (GDP) grew by 7 per cent between April and June, which is the second quarter.

"The services sector contributed 47 per cent of the GDP, agriculture sector 33 per cent, with the industry sector accounting for 14 per cent. Six per cent is attributed to adjustment in taxes without subsidies on products,” Murangwa said.

The NISR chief was speaking at a joint news briefing with Finance and Economic Planning minister Claver Gatete at the ministry headquarters in Kigali yesterday.

In the first quarter of the year (January to March), GDP grew by 7.6 per cent.

Although the 7 per cent growth in the second quarter is 0.6 per cent short of what was posted in the first quarter, it is still higher than the 6.1 per cent recorded in the second quarter of 2014, just as well as it is higher than the annual 6.5 per cent growth projected by the government for 2015.

Last year, the economy grew by 7 per cent higher than the 6 per cent that had been projected.

With growth in the first and second quarters of the year already well above the government’s projections, Minister Gatete said discussions with International Monetary Fund (IMF) will determine whether to revise the projections upwards or leave them unchanged.

"This trend already gives us an idea of how we are faring but it’s something we will discuss with IMF counterparts who will be here next month. After the meeting, we will announce our projections regarding where we will be in terms of GDP rate by the end of the year,” Gatete said.

Services drive growth

As has been the case in the recent past, the services sector led growth in the second quarter after it grew by 6 per cent to contribute 3.1 percentage points to the total 7 per cent GDP expansion.

Growth in agriculture sector was 5 per cent and contributed 1.7 percentage points to the overall GDP, while activities in the industry sector grew by 10 per cent to contribute 1.5 percentage points.

Agriculture’s 5 per cent growth in the second quarter is 3 per cent short of the annual growth projected for the sector under the second Economic Development and Poverty Reduction Strategy (EDPRS II).

However, both Gatete and Murangwa expressed confidence in the sector, pointing to its 33 per cent contribution to general GDP as "good enough.”

Gatete also scoffed at the idea of establishing an agricultural bank to help farmers circumvent high interest loans from commercial banks, saying such an initiative would not address the issue of risk and credit worthiness of borrowers.

Meanwhile, the figures also indicated that Rwanda’s exports in the second quarter increased by 6 per cent, while imports increased by 8 per cent to crown a generally productive period for the economy.

However, the 6 per cent growth for exports is still too low compared to the 28 per cent target growth envisaged for the sector under EDPRS II.

According to the Ministry of Trade and Industry, Rwanda’s exports have been increasing at an annual average of about 20 per cent over the last five years but remains short of the 28 per cent target growth.

The government attributes the recent depreciation of the national currency to the country’s unfavourable balance of payments whereby total earnings from the exports are outweighed by what is paid out for imports.

As a result, government has recently established an Export Guarantee Fund to help support national exports development in a bid to, in the long run, reduce the current trade payment deficit.

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