Economy expands by Rwf224bn in Q1 of 2017

Rwanda’s Economy grew by Rwf224 billion in the first quarter of 2017, thanks mainly to the service industry which outperformed other sectors. According to the National Institute of Statistics of Rwanda (NISR) quarterly report, released yesterday, the country’s GDP at current market prices was estimated at Rwf1,817 billion, up from Rwf1,593 billion in the same quarter of 2016. This reflects a GDP growth of about 1.7 per cent during the quarter. Yusuf Murangwa, the NISR’s director-general, said the growth in the service industry was mainly due to performance in hotels and restaurant activities which grew by 17 per cent. The services sector grew by 4 per cent and contributed 46 per cent to the national economy. This was followed by agriculture, the country’s economic backbone, which grew by 3 per cent, contributing 32 per cent to the national basket. “Growth in this sector [agriculture], which employs more than 72 per cent of the population, was largely driven by a robust production of food crops, especially during the first season of the year (season A),” Murangwa said. Export crops fetched Rwf31 billion, less than the Rwf40 billion earned in the last quarter of 2016. Overall, export crops decreased by 24 per cent mainly due to the decrease in production of coffee and tea.’ Industry declines The growth of the industry sector declined by 1 per cent, contributing 15 per cent to the national economy. This is largely attributed to a reduction in construction activities which dropped by almost 7 per cent. However, manufacturing activities buoyed by the Made-in-Rwanda campaign, grew by 7 per cent, boosted by food processing, which increased by 13 per cent and production of chemicals, rubber and plastics that rose by 28 per cent. Meanwhile, real estate activities increased by 8 per cent, while administration and support services activities increased by 25 per cent. The Government’s final consumption was 15 per cent of GDP, with Gross Capital Formation estimated to be 25 per cent of GDP. Govt confident about the targets The Government remains buoyant that the country will achieve the projected 6.2 economic growth rate by the end of the year despite a sluggish start in the first quarter. Finance and Economic Planning minister Claver Gatete attributed the sluggish start to a reduction in construction activities and is hopeful of a better growth rate during the second quarter of the year. “We are going back to analyse the statistics and look at policies and where we can improve to keep the economy resilient; we are also confident of stronger growth going forward,” the Minister said. Next steps Economists have called on stakeholders to invest more in modern agriculture to give the sector the much needed boost. Leonard Rugwabiza, the chief economist at the Ministry of Finance, said investing in agriculture while promoting locally-made products will help the economy remain sound and stable. Recently the International Monetary Fund (IMF) projected Rwanda’s economy to grow by 6.2 per cent in 2017, recovering from a slight dip in 2016 where it grew by 5.9 per cent. In their second review of Rwanda’s Policy Support Instrument, the IMF projected that the economic growth would be accelerated this year largely by recovery of the agricultural sector, growth in exports, and reduction in the trade deficit. editorial@newtimes.co.rw

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Economy expands by Rwf224bn in Q1 of 2017