The progressive performance of the sector is expected to push Rwanda’s economic growth to about 10 percent this year.

While Rwanda’s economy has been regarded as one of the fastest growing in Africa the agricultural sector has been found to have played a significant role on the trend.

Agriculture being one of the six pillars of Rwanda’s Vision 2020, it aims at replacing subsistence farming with a fully commercialised sector by 2020.

In the past decade (1997-2007), the agriculture sector averaged 45 percent of the Gross Domestic Product (GDP) and generates nearly 75 percent of the foreign exchange earnings.

This year, the sector is making significant growth towards the Economic Development and Poverty Reduction Strategy (EDPRS).

According to the Ministry of Finance and Economic planning (MINECOFIN) first semester implementation report of EDPRS, agriculture has about 78 percent of policy action towards economic development and poverty reduction are on track.

According to a report, out of the nine intended actions for implementing the EDPRS, six were on-track and three still being watched by the line ministry.

The report says that, "On-track to be achieved are the completion of feasibility studies for at least 10 out of 34 sites  for watershed  management, an environmental management plan has also been developed.”

"Implementation of the crop-intensification strategy, the seed law has been developed, and a feasibility study for a tea factory has been conducted. In controlling animal diseases, an animal health strategy was completed and under implementation,” adds the report.

Yet to be achieved is the development of animal nutrition policy.

According to the report’s interpretation, agriculture is likely to meet all EDPRS targets by the end of 2008.

"This is a concern both for reasons of domestic accountability as well as for achieving benchmarks agreed with external partners,” the report says.

The report is based on the 2008 policy actions appearing in the EDPRS results and policy matrix assessment by MINECOFIN..

The progressive performance of the sector is expected to push Rwanda’s economic growth to about 10 percent this year.

The Central Bank Governor, Francois Kanimba is quoted to have said: "Agriculture is particularly strong and is growing at a minimum rate of 10 percent.”

The forecast 2008 growth rate figures are considerably higher than last year figure of 6 percent. According to Kanimba the performance of other sectors such as manufacturing and service will also be a crucial in attaining the growth.

Manufacturing and service have averaged higher than 10 percent growth over the last five years.

Rwanda’s rich fertile soils give it an enormous opportunity for the development of the agricultural industry.

About 80 percent of the population depends on agriculture.

Currently, the country’s main agricultural exports are horticulture, tea and coffee and, to a lesser extent, pyrethrum extract.

However, the agriculture sector’s exports have been affected by the current financial global crisis.

Coffee one of the countries foreign exchange earners has seen its price drop in America by about 23 percent. A pound of coffee is selling for $1.17 (Rwf645.2) compared to $1.53 (Rwf843.7) per pound in the pre-crisis period.

About 20 percent of Rwanda’s coffee exports enter the American market. Owing to this effect, the country’s growth rate is likely to fall to 6-7 percent next year.

Kanimba said, "The current assumption we have for 2009 is a growth rate of 6-7 percent, not more.”

Ends