Rwanda recorded strong growth in export earnings in 2021 thanks to the rebound of business activity from the Covid-19 pandemic as well as the rise in global commodity prices and improvement of trade in the region.

The central bank said on Tuesday that last year the country generated $1,531 million from exports, a rise of 8.8 per cent from $1,407.5 million in 2020 when export revenues contracted.

Merchandise exports gained the most as they raked in $1,167.8 million for the country compared to $761.3 million in 2020, central bank governor, John Rwangombwa, disclosed as he presented the monetary policy and financial stability report. The report also highlights the status of the economy.

Delegates follow the presentation of the Monetary Policy and Financial Stability Statement for 2021 on March 29, 2022. Dan Nsengiyumva

In the period under review, traditional exports— coffee, tea, minerals— grew by 41.1 per cent, non-traditional exports — manufactured products and horticulture 56.7 per cent, re-exports by 49.2 per cent as informal cross border exports increased by a staggering152.7 per cent.

Most of Rwanda’s exports (48 per cent) are shipped to African countries with DR Congo, which, on March 29, officially joined the East African Community (EAC), as the main destination. 41 per cent of Rwanda’s exports go to Asia.

The rebound in exports also reflects the good performance of the manufacturing and horticulture industries.

Traditional exports generated $330 million on account of growth in mineral revenues, which increased by 79.7 per cent, coffee 45.2 per cent and tea by 7.3 per cent, the report shows.

Participants interact during the presentation of the Monetary Policy and Financial Stability Statement for 2021 on March 29, 2022. Dan Nsengiyumva

Vegetables, fruits, flowers, agro-processing, and locally manufactured products increased by 56.7 per cent, fetching $275.8 million.

"The upward trend for non-traditional exports registered over the last few years is a reflection of (the) impact from the Made in Rwanda programme, which records an improvement from the supply chain disruptions caused by the Covid-19 pandemic,” the reports says.

Re-exports mainly composed of petroleum products, foodstuffs, vehicles, machinery, and electronics, rose by 49.2 per cent to $469.5 million in 2021.

On the other hand, Rwanda spent $3,201 million on merchandise imports in 2021, an increase of 16.5 per cent as the country shipped in more inputs to support growing domestic industrial production. 

Overall, the import bill rose by 5.8 per cent to $3,569.3 million.

The Presentation of the report took place in Kigali on Tuesday, March 29 

The trade deficit widened by 3.7 per cent, which shows that Rwanda’s imports still outpace exports.

In 2021, Rwanda spent $881.1 million on the importation of intermediary goods categorised into industrial products, construction materials and fertilisers.

The imports of construction materials excluding cement increased by 22.2 per cent, the report says, pointing out that cement imports declined by 6.4 per cent owing to the rise in domestic production.

Economic outlook in the midst of the Russia-Ukraine war

In 2021, the economy grew by 10.9 per cent after a contraction of 3.4 per cent in 2020.

The central bank predicts that the economy will remain on the path of recovery in 2022 driven by ongoing government programs such as the Manufacture and Build to Recover, the continuous vaccine campaign and reopening of the economy.

However, this recovery is now being tested by fresh challenges brought about by the Russia-Ukraine war — posing an upside risk for Rwanda’s inflation, as well as additional pressures on the external sector, the Bank says.

"On the external sector, the war is likely to increase our import bill as commodity prices (especially energy) rise, putting pressure on the depreciation of the Rwandan Franc,” the Bank said in its forecast in which it also promised to continue monitoring domestic and global macroeconomic developments and take necessary actions to keep headline inflation at bay.

The central bank predicts inflation to oscillate between 2 and 8 per cent in the medium term with a benchmark of 5 per cent.