Rwanda’s trade deficit widens by 8 percent

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Rwanda’s trade deficit widens by 8 percent

The country’s merchandise trade deficit continued to widen further by 8 percent in 2014 compared to the previous year 2013 with import bills growing   bigger compared export bill.

The deficit   grew to US$ 1.7 billion by end of December 2014 up from US$ 1.5 billion in the same period in 2013 despite a growth in the annual export cover for imports that grew by 21 percent in 2009 to 29 percent in 2014.

According to  the Ministry of Trade and industry statistics, the  country’s  total   merchandise  trade  fetched US$3.1 billion 2014 representing an increase of  6.3 percent  compared to  the previous year  2013.

In the same period under review  exports  from both  formal and  informal  trade increased  by 4.3 percent  to  Us$701.1 million while  imports on the other hand also grew  by 6.9 percent   to US$2.4 billion  compared to  2013.

The  export  bill  was facilitated  by an  increase  in non-traditional exports that increased   to 16 percent    in 2014  from 15 percent  of  total  exports  and  re- exports share to the total export  bill  increasing  to 24 percent   in 2014 from  20 percent in 2013.

“The strong   growth   in re-exports   was due to   the re-export of machines, engines and petroleum products,” said Francois Kanimba, Minister of trade and industry

Despite an increase in  coffee  receipts  that  grew  by  36 percent    thus leading  to  an overall increase in  export value by   8.7 percent, traditional   exports   fell  by 4.1 percent which  was driven  by  a  fall  in tea    prices  that  dropped   by  13.5 percent.

The Minister said that  the  primary destination for the country’s formal  exports was Europe followed  east Africa region  increasing the trading share in 2014 compared to  2013  by 41 percent  from 35 percent  and  21 percent from 20 percent  respectively.

Moreover, Mineral   exports  which  were a major contributor  to  total export  bill  in  2013  fell by  6.6 percent   in  2014  which  was  as a  result of  a  to  22.1 percent decrease in value  of coltan exports  which affected  its prices negatively leading to a fall in prices of  17 percent .

Interestingly, Minister Kanimba says  that  the country’s exports  of   gold and iron ores    increased  pushing up   the  exports of  other  minerals  apart  from  casseterite, wolfram and  coltan  by  1543.4 percent  to  US$8 million in  2014.

On the hand, import  bill  was pushed up  by  an  increase  in  intermediary   goods that   went  up  12 percentwhich ass  a result  of  an increase  in demand of  chemical  industrial products  which  increase d by 36 percent, capital  and consumer goods increased  by 8percent  and 5 percent respectively.

Nevertheless,   the   imports   of energy and lubricant decreased slightly by 1 percent, thanks to the recent drop in   crude oil  prices globally while informal  imports  increased  strongly  by 22 percent .

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About the author

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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