How Rwanda attained the 7.7 pc economic growth rate

The country’s general economic environment was characterised by several upward and downward spirals that were nonetheless kept within control limits.Growth and development was normal, but most importantly, Rwanda maintained its position as a leading investment-friendly destination in Africa.The New Times highlights some of the key events that drove the economy last year.GDP and inflation fight on despite uncertaintiesThe economy continued to witness strong resilience with a real Growth Domestic Product of 7.3 per cent in the third quarter of 2012, despite global shocks that persisted throughout the year.Although this was a drop from 9.9 per cent in the first quarter, the Central Bank reported that despite the global economic crisis which pushed government expenditure and import receipts higher, the economy continued to perform normally buoyed by cross border trade and a healthy services industry.There was also a significant decrease of 1.3 per cent from the agriculture sector’s contribution to GDP growth, citing poor climatic conditions during the year.The Rwandan Franc did not look good either due to increased importation which did not correspond with exportation levels.This coupled with several aid cuts from major donors contributed to the depreciation of the Rwandan Franc against the dollar by 4.5 per cent between December 2011 and mid-December 2012.Intervention from the Central Bank by floating dollars on the foreign exchange market ensured that the Franc regained its stability; thus inflation declined from 8.3 per cent in December 2011 to 4.6 per cent in November 2012.MTN fined Rwf3m everyday for poor servicesThe year 2012 was a bittersweet one for the telecoms sector. With the entry ofAirtel, it meant that the duopoly between MTN and Tigo was over, but network failure from MTN also meant that most subscribers spent the year going through hard times.As a result, in September, MTN was fined Rwf3 million per day for its poor services and network failure by the Rwanda Utilities Regulatory Agency, a fine the company would have to contend with until the problem is fixed.MTN subscribers, both mobile and internet users, had constantly appealed to the regulator, expressing frustration over network ineficiencies that affected their daily businesses.Rwanda ranked third in global business reportDespite a challenging year economically, Rwanda regained its place among the top elite business-friendly destinations. It was named the third easiest place to do business in Sub- Saharan Africa, after Mauritius and South Africa by the World Bank Doing Business Report.Released in October 2012, the report ranked Rwanda 52nd out of 185 countries, retaining its reputation as the best business destination in eastern and central Africa region.Overall, the country registered significant improvement, particularly with regard to enforcing contracts where it came 39th as well as access to electricity, emerging 49th.Despite the short term economic shocks, the report indicated that Rwanda is still a favourite destination for investment.Two airlines open routes to KigaliSouth African Airways and Qatar Airways added Rwanda to the list of their destinations last year and currently operate flights in and out of the country.The aviation industry thus maintained its attractiveness, equalling 2011 where two new airlines - Turkish Airways and Emirates Airlines - were also registered.Rwandair also kept pace by rejuvenating its fleet with two new aircrafts from Bombardier Aerospace in Canada.With high traffic flows and over 200 flights per week entertained at the Kigali International Airport, it is only a matter of time before more airlines begin schedules to Kigali.This serves as reason why Bugesera Airport will come in handy once its construction sets pace.Two new factories openedLast year, a new cassava processing factory in Kinazi, Ruhango District, Southern Province started operations.Opened in April by President Kagame, the Rwf6b establishment has the capacity to process 144 tonnes of cassava with an output of 45 tonnes of flour per day.While in the past, cassava was just eaten raw, roasted or boiled, the new factory comes with value addition to farmers produce, and improves their competitiveness on the international market.Secondly, the President also unveiled the East African Granite Industries (EAGI) – the largest granite factory in the region.Built on 72 hectares in Nyagatare district in the eastern province, the US$ 15 million factory employs over 1,000 workers and also cuts the importation of granite construction materials.

National

How Rwanda attained the 7.7 pc economic growth rate