Economy projected to grow by 6 percent in 2014

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According to the monetary policy statement read out by the Governor of the National bank of Rwanda John Rwangobwa this Wednesday morning, economy growth rate is projected to be at 6 percent by the end of the current financial year.

Rwanda’s economy has grown by over 8 percent but growth in 2013 slowed down to 4.7 percent as aid cuts took their effect on the country’s economy.

But the recovery path is set to be led by the services sector as GDP grew by 7.4 percent in the first quarter of this year compared to the past fiscal year.

The sector realized the biggest growth with 8 percent in the 1st half 2014, followed by agriculture and industry growing by 5 and 9 percent respectively from a previous 6 and 13 percent in 2013.

The trade deficit gap continued to widen in the first half of 2014 due to increased imports without corresponding increase in exports as more Rwandans import items such as vehicles and foodstuffs.

Despite this all this the cover rate of Rwanda’s imports by exports in 1st half of 2014 decelerated to 24.6 percent from 27.5 percent achieved in the same period last year, but exports to neighbouring East African countries significantly increased to US$97.8 million from US$70.7 million in same period last year

The microfinance sector recorded a positive performance with 14.5 percent asset growth from end December 2013 to end June 2014

There was also an increase in the mining sector with 14.2 percent increase in volume but decreased 18.6 percent in value due to a sharp fall in prices of the country’s principle mineral coltan.

Experts believe the government’s set targets are achievable but warned on the much dependence on the service sector, “the government should diversify more into other sectors to enable balanced growth,” said Eric Kareba an investment banker.

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Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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