Service sector fuels economic growth

Activity among Rwanda’s tourism, banking, telecommunications and transport industries accelerated in the second quarter of this year, driving the country’s economic growth.According to the National Institute of Statistics of Rwanda (NISR), the economy expanded by 9.9 per cent in the months running through April to June compared to 6.1 per cent in the same period last year. Economic growth during this year’s second quarter is well above annual forecasts by government and the International Monetary Fund (IMF). Government projects an economic growth rate of 7.7 per cent this year compared to 8.6 per cent last year. With a growth rate of 14 per cent, the service sector was the main driver of the economy as transport, storage, communication expanded by 21 per cent. Whole sale and retail industries grew by 11 per cent while public administration grew by 22 per cent.The service sector makes up nearly half of Rwanda’s economy. Activities in the industry sector, which includes construction and manufacturing grew by 9 per cent, mainly driven by the construction which increased by 17 per cent, the statistics body said.Agriculture, which employs a greater part of Rwanda’s households, grew by just 4 per cent on account of a 4 per cent growth in food crop production. Exports crops production decreased by 17 per cent compared.“It is evident that these two sectors (services and Industry) are growing at a high rate,” central bank Governor Claver Gatete said, adding that this is a sign that the economy is going to grow as expected.Imports are estimated to have increased by 8 per cent while exports grew by 21 per cent even as the trade deficit remains so high Gatete says current indictors show that economic activities continue to record significant performance, especially with steady growth in credit to the private sector. Credit to the private sector stood at Rwf642 billion between January and august this year compared to 483.8 billion in the same period last year, according to figures from the central bank.