Rwanda’s economy continues to grow at sustained pace

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Rwanda’s economy continues

Traditional exports such as coffee contributed 58.8 percent of the total export receipts in the

first half of 2013

Rwanda’s economy remains resilient and continues to grow at a sustained pace as exports increase significantly despite a decline is some international commodity prices.

According to the Ministry of Finance, growth in the first quarter of 2013 was mainly driven by industry and agriculture which grew at 14.3 percent and 5.5 percent respectively.

This is attributed mainly to construction industry which registered 23.5 percent growth while good performance in agriculture production was due to an impressive harvest in 2013 season A, which increased by 7.8 percent compared to 4.4 percent in the same period of 2012.

“Improved economic activities in the second quarter of 2013 were supported by the banking sector which granted loans amounting to Rwf122.9 billion compared to Rwf97.6 billion in the first quarter. This is explained by increased government spending after development partners released aid and grants,” read a Monetary Policy and Financial Statement presented on Tuesday.

In the first half of 2013 both imports and exports increased in value and volume. Export value amounted to $289.92 million representing a growth of 46.3 percent compared to the first half of 2012 while its volume increased by 27.1 percent.

Traditional exports such as coffee, tea as well as some minerals contributed 58.8 percent of the total export receipts in the first half of 2013.

Despite a decline of 5.5 percent in tea value exports in the first half of 2013, overall traditional exports pulled in $166.8 million compared to $110.2 million in the same period last year, representing 51.4 percent increase.

However, continuous dominance of traditional exports makes the export sector vulnerable to factors such as weather conditions and fluctuation of international prices.

Rwanda registered a positive cross border trade balance of $48.88 million in informal cross border trade, after informal exports increased by 10.2 percent amounting to $56.26 million from $51.04 million recorded in the first half of 2012. Informal imports decreased by 10.5 percent from $10.48 million to $ 9.39 million in the same period.

Informal cross border exports were dominated by transaction with the Democratic Republic of Congo (DRC) which accounted for 82 percent of total exports while imports were mainly from Uganda which accounts for 56 percent share.

Despite impressive increase in exports in terms of value and volume, negative balance of payment continues to be a challenge. So far exports cover only 25.5 percent of imports up from 19 percent in 2012.

 

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About the author

Ashley Stuart is the Editor (English) for RwandaEye. She has worked as the lead project manager for Dunkirk Business Consultancy and is an authority on Foreign Markets. She is the major contributor of English articles for RwandaEye.

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