Rwanda’s economy grew by 7.9% in quarter one of 2022

Rwandas gross domestic product (GDP) increased by 7.9 per cent to Rwf3,025 billion (over Rwf3 trillion) in the first quarter of 2022, up from Rwf2,588 billion in the same quarter of last year. This is according figures released by the National Institute of Statistics of Rwanda (NISR) on Thursday, June 16. Three key contributors to growth in the first three months of 2022 are services with 47 per cent, agriculture with 23 per cent, and Industry 22 per cent, while net direct taxes accounted for the remaining 8 per cent. Meanwhile, agriculture sector output grew by just 1 per cent and contributed 0.6 percentage points to overall GDP growth. Ivan Murenzi, the Deputy Director-General of NISR said that just like the rest of the world, Rwanda’s economy continues to encounter shocks triggered by the Covid-19 pandemic which started in 2020. He said that measures that were put in place to fight the pandemic including vaccination, have contributed to the economic recovery, indicating that with that, the country’s GDP registered an annual growth 10.9 per cent in 2021 [of course from a low base – a GDP fall of 3.4 per cent in 2020]. “So you would say that trajectory of GDP recovery has continued on into 2022, despite still the existence of those challenges of remnants of the Covid pandemic, plus as we know, the effects of Russia-Ukraine war and the China zero Covid policy which has also caused the supply chain disruptions,” he said. “Those are the things still happening. However, the recovery is also happening,” he said. Agriculture modest growth Within the agriculture sector, the production of food crops decreased by 1 per cent due to the production of cereals and vegetables that dropped by 4 per cent and 9 per cent respectively. Still, the production of export crops decreased by 14 per cent, as a result of a 41 per cent decline in coffee production. However, the production of tea increased by 3 per cent. Industry sector performance For the industry sector, industrial activities grew by 10 per cent and contributed 1.86 percentage points to GDP growth. The main contributors in this sector were construction activities which grew by 6 per cent and manufacturing activities which went up by 11 per cent. The growth in manufacturing activities was thanks to an increase of 6 per cent in food processing, 12 per cent increase in the production of beverages, 20 per cent in the manufacturing of wood, paper and printing products, 19 per cent in production of chemicals and plastic products and 22 per cent in textiles and leather products. Again, there was an increase of 36 per cent in the manufacturing of non-metallic mineral products (mainly cement). Also, mining and quarrying activities rose by 16 per cent. Service sector continue to lead economic growth For the service sector, its output increased by 11 per cent. Within this sector, information and communication services rose by 17 per cent, professional, scientific and technical activities increased by 5 per cent, real estate activities increased by 5 per cent while education grew by 2 per cent. Moreover, human health and social work activities increased by 22 percent, hotel and restaurant services rose by 80 per cent following a decrease of 34 per cent in Q1 2022 due to effects of the Covid-19 pandemic), administrative and support services grew by 6 per cent and public administration and defense; compulsory social security went up by 7 per cent. Financial services activities grew by 13 per cent, while health and social work activities increased by 22 per cent. Overall, economy to grow by 6% The Minister of Finance and Economic Planning, Uzziel Ndagijimana observed it is expected that Rwanda’s economy will grow by 6% in the entire 2022, indicating that the country revised downwards its economic growth forecast for this year from the initial 7.2% because of the Russia-Ukraine war shock. It is to note that the Russia-Ukraine war has had a far-reaching impact on the global economy, including the disruption of the supply chain of commodities such as energy and foodstuffs like wheat and cooking oil as the two countries are major suppliers of such items, yet the war has affected their trade.

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Rwanda’s economy grew by 7.9% in quarter one of 2022