The service sector is expected to return to faster growth this year on account of increased government spending in the sector, a senior official has said.

The sector is also projected to grow faster and reach 7.6 percent in the Financial Year 2010/2011 after under performing last year with only 4.3 percent growth down from 11.5 percent in 2008.

This was mainly due to the fall in global demand and tightened banking system credit conditions.

In an exclusive interview with Business Times on Tuesday, John Rwangombwa, the Minister of Finance and Economic planning said the sector is expected to rebound to growth this year following strategic investments by government. Government plans to increase spending by 9 percent in the Financial Year 2010/11.

"The investment we are making in the airline, airport, the hotels, convention centre; all this will have to create the enabling environment for increasing our tourism receipts. Looking at the performance of tourism over the past years -it has doubled and we expect to see that continuing,” he said.

Rwangombwa observed that while government is focusing on improving exports, tourism is projected to be the highest revenue earner for Rwanda.

Government expects to generate $206 million from tourism this year, up from $174 million last year. The sector is project to generate $237 million in 2011.

The recovery of the sector will also be boosted by a rebound in economic activity and increased financing for sub-sectors and increased investment in telecommunication.

With the forthcoming construction of a new airport in Bugesera that conforms to international standards, Rwangombwa said the airport will have the capacity to turn the country into an East and Central African gateway.

"We are making significant investments to ensure that this new airport is serviced by a strong national air carrier.   Rwandair will provide much needed links for high-value exports and business as well as leisure travelers.”

Strategic investments in the sector include the ongoing construction of convention center together with a five star hotel that is expected to be open for business by end of 2011.

Government is also in the process of deploying the 2,300km of fiber cable that will connect over 230 institutions in all districts and all Rwandan boarders with the main cities.

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