As the curtains slowly fall on 2016, Business Times will be bringing you some of the key events that characterised the year in the remaining weeks. We will chronicle both the lows and ups that shaped the local economy and bring you expert projections for the coming year, in all sectors that span the business environment. Today, Business Times’ Peterson Tumwebaze looks at a general economy and some of the milestones recorded over the year.

With just over three weeks to draw curtains on 2016, analysts are saying it has been "challenging, but successful year”. Though key milestones were recorded, 2016 has been yet another difficult year that fell short of expectations on some fronts.

The local economy has registered somewhat impressive performance compared to most countries on the continent and globally, growing by 7.3 per cent in the first quarter before slowing down to 5.4 per cent in the second quarter. According to the National Institute of Statistics of Rwanda (NISR), the performance in both Q1 and Q2 was driven by high growth in the industrial sector of 10 per cent, and services and agriculture sectors, which grew by 7 per cent each.

The World Bank had, at the beginning of the year, projected the country’s economy to grow by 6.8 per cent this year, and rebound in 2017 to 7.2 per cent.

However, many experts are now projecting the country could grow by 6 per cent this year, from 6.9 per cent recorded in 2015. The International Monetary Fund (IMF) says Rwanda’s economy will expand 6 per cent despite the turbulent global economic times.

"Growth projections for the year remain at 6 per cent which is one of the highest in sub-Saharan Africa. We expect growth to be driven by services activity with somewhat lower growth in agriculture due to the recent drought and lower growth in industrial and construction activities following the end of several large projects,” Laure Redifer, the IMF team leader, said in a recent interview with The New Times.

According to EDPRS II, Rwanda is targets 11.5 per cent annual growth rate. Therefore, it will require more than efforts from all the stakeholders to achieve this goal. This will also depend on how the country responds to the global economic shocks.

The central bank has attributed the slowdown in growth to the global economic volatility and low commodity prices that weighed down Rwanda’s external trade receipts. John Rwangombwa, the National Bank of Rwanda (BNR) chief, had in the previous monetary policy and financial stability statements stressed the dangers and threats paused by the slowdown of the Chinese and European economies, as well as decline in international commodity prices, particularly minerals. Rwangombwa expressed the concerns on Rwanda’s low export earnings this year, which have affected the forex market, besides eating into the country’s import cover.

Despite these challenges, the central bank says 2017 will be the turning point, noting that government has invested a lot of money in export-oriented firms which should boost export earnings and help reduce the country’s expanding trade deficit going forward. So what were the big developments and deals recorded in the past 11 or so months of 2016?

Mega deals of 2016

Though 2016 has been a tough year, there were key developments and deals that should impact events and the economy next year, thanks to their trickledown effect. This will help keep the Rwanda economy buoyant and stable despite the continued volatility in the global economic arena.

Morocco deals

Perhaps the year will be remembered for the deals both government of Rwanda and the Kingdom of Morocco signed to fast-track economic development. Overall, Rwanda and the Kingdom of Morocco signed 19 agreements in a bid to strengthen bilateral ties and create opportunities for citizens of the two nations. Both countries agreed to co-operate in the fields of finance, investments and private sector development, among others, and signed the deals to kick-start the partnership.

Microfinance support

The two countries signed an agreement on Microfinance Partnership and on the launch of Africa Mutual Growth Investment Fund. Through Attawfiq Microfinance Foundation and Atlantic Microfinance for Africa, the two countries agreed to set up a micro-finance programme providing credit to project holders and microenterprise operators. The Africa Mutual Growth Investment Fund is expected to be established in Rwanda and will have a capacity of $300 million dedicated to East Africa with the first phase of $50 million dedicated to Rwanda.

The other beneficiary from the landmark deal was Rwanda Development Board which signed six deals with Moroccan officials in a number of areas, including reciprocal promotion and protection of investments, partnership agreement in the field of tourism and the establishment of a pharmaceutical industry in Rwanda by Cooper Pharma. The plant, which is expected to open in 2019, will produce beta-lactam antibiotics with the aim of improving access to quality and affordable medicines for Rwandans.

The two countries also intend to partner in the development and promotion of economic zones in Rwanda through infrastructure development and construction and supporting logistics and transportation services, as well as engineering and construction sectors.

The private sector bodies of the two countries also signed an agreement for the establishment of the Morocco-Rwanda Business Council that aims at deepening economic relations and strengthening business opportunities.

In addition, the Rwanda Energy Group signed a memorandum of understanding on the development of renewable energy with Morocco. The deal aims at strengthening the institutional framework for the development of renewable energy in capacity and industrial development. Palmerie Development Group, a Moroccan firm, will partner with Development Bank of Rwanda to develop 5,000 affordable houses estimated at $68 million.

Rwanda and Morocco agreements to support agric

More so, both Rwanda and the Kingdom of Morocco signed bilateral agreements to support the agriculture sector, share expertise in areas of water management, agriculture finance, crop insurance, horticulture, animal health and production. Other areas included soil mapping and testing, irrigation, as well as fertiliser manufacturing and blending.

Bugesera International Airport finally gets support

However, it was not a Moroccan affair, Rwanda was able to ink other big money deals that are expected to play a key role in the local economy going forward. For instance, works on Bugesera International Airport kicked off, thanks to a deal with a European developer.

The development of Bugesera International Airport has been on the books for years, but government, finally, signed a deal with a Portuguese firm to take over construction of the mega project.

The airport, according to Minister for Infrastructure James Musoni, is expected to be completed by 2018. The investor will invest more than $418 million during the first phase of the project, which is expected to deliver a facility of international standards with capacity to handle about 1.7 million passengers every year.

Housing deal to promote green development

The government promotes the concept of green economy and sustainable growth. So, Rwanda and Singapore signed a deal, where Singaporeans will equip Rwandans in green construction and other practices that promote sustainable and environmental-friendly housing.

As part of the agreement Rwandans will learn how to economise building materials, such as cement and steel, in order to effectively reduce the cost and time required to complete a housing project without compromising the durability and design of the structure.

All buildings constructed using this approach will be certified to show that they are environmentally-friendly. This, according to officials, will allow such facilities, including hotels and residential houses, to attract clients who are eco-conscious.

Cross-border trade

Meanwhile, an agreement that is tipped to increase agro-exports between Rwanda and the DR Congo was signed by farmer groups from both countries. Experts say the deal will ease trade and help open new markets for local produce

The bilateral trading agreement signed between Private Sector Federation’s Chamber of Farmers and Congolese Farmers-Concessioners Association for Development ensures Rwanda of access to the huge DRC market.

According to the agreement, the two parties will co-operate in promoting cross-border trade by identifying and sharing market opportunities for agriculture produce. It was also agreed that the two parties share expertise and involve in joint investment to enhance trade.

Mining industry gets timely shot in arm

In what was seen as an effort to boost mining activities in the country both Rwanda and Oman-based firm signed a $39 million mining deal that could turn around mining business in the country in the coming years.

The government signed three large-scale mining agreements with Tri Metals Mining (Rwanda) Limited to undertake mining operations in Bisesero, Karongi District. With an estimated project value of $39 million, Tri Metals will carry out mining operations to extract mainly cassiterite (tin), niobo-tantalite (tantalum and niobium) and wolframite (tungsten) in the Bisesero concessions in the Western Province.

The country’s mining sector got another boost when the government and a US firm agreed to facilitate direct sales in the US market.

AVX Corporation agreed to facilitate direct sales, a move that will eliminate middlemen in the mineral supply chain. The deal with the world’s biggest consumer of coltan and largest manufacturer of tantalum components for electronics industry, was inked in mid-2016. Under the deal, the country’s minerals, especially coltan, will be directly exported to the US-based AVX Corporation.

Off grid solutions

Meanwhile, YUMN an international lender agreed to finance the construction of an 80MW peat power plant with at least $350 Million. The mega plant will be located in Mamba sector, Gisagara District in Southern Province. YUMN ltd signed the financing documents with the core lenders such as Africa Finance Corporation, Finnfund, PTA Bank, Afrexim Bank, Development Bank of Rwanda and Exim Bank of India respectively.

According to the Ministry of Infrastructure, the project comes as another commendable step towards achieving economic goals and improving the socio-economic status of Rwandans as outlined in the country’s development blueprint.

Another firm to invest Rwf37 billion in lighting up rural homes, finally, signed an agreement with Rwanda Energy Group at the beginning of the year to kick-start the project. The project is expected to connect at least 250,000 households. Ignite Power Ltd, a Mauritian firm engaged in large-scale deployment of clean energy solutions in Africa agreed to invest more than $50 million (about Rwf37 billion) into off-grid power solutions for the next five years.

The deal provides a framework for large-scale deployment of solar electric systems across rural communities in Rwanda. It also allows beneficiaries a two-year grace period to pay for the acquired solar systems.

Rwf157 billion EU energy support

To boost energy production generation and distribution, the Government and the European Union, signed a financing agreement worth €177 million (about Rwf157 billion) to support the energy sector for the next five years.

The financing agreement was the first of a series to be signed in the coming months as part of a €460 million programme of EU grant financial assistance to Rwanda agreed in 2015. The money will help Government improve the supply, transmission and distribution of electricity in Rwanda.

More funding to power sector

In what could enable the country extend electricity to more Rwandan homes, government and the Federal Republic of Germany, signed a bilateral agreement worth €15 million (about Rwf13 billion) to support energy supply in the country. The project will also benefit other countries in the Great Lakes region. The grant is expected to help boost construction of Ruzizi III hydropower project and contribute to improving energy supply in Rwanda, and in the Great Lakes region to foster socio-economic development.

More strides were made on to the country’s energy generation and distribution capacity during 2016. Rwanda’s installed power generation capacity increased to about 190MW, from 185MW in 2015. This is against a target of 563MW by 2018. Going into 2017, government will aim to increase connectivity to more than households to meet its target of extending power to 70 per cent of the total population. This, however, requires strong public and private sector partnerships.