Rwanda's Gross Domestic Product (GDP) grew by 8.2 per cent to Rwf 16,355 billion in 2023, boosted largely by the services sector, the National Institute of Statistics of Rwanda (NISR) said on Monday, March 11.

The services sector grew by 11 per cent and accounted for 44 per cent of the total GDP due to the good performance in information and communication activities, air transport sector, as well as hotels and restaurants, all of which improved 39 per cent, 29 per cent, and 18 per cent, respectively.

"We see increased activity in both calling and internet usage, which are the primary drivers behind the growth [in information and communication activities]. In previous years, growth was primarily spurred by investment,” Yusuf Murangwa, NISR Director General said at a press conference.

The industry and agriculture sectors grew by 10 per cent and 2 per cent, respectively. The industry sector accounted for 22 per cent of the GDP, while agriculture contributed 27 per cent to the economy.

According to the latest statistics from NISR, manufacturing recorded improved performance at 11 per cent and construction activities increased by 12 per cent.

Growth in manufacturing was fueled by a 14 per cent increase in food processing activities, a 20 per cent surge in textiles, clothing, and leather goods production, a 21 per cent rise in chemicals, rubber, and plastic products, and a 19 per cent increase in wood, paper, and printing.

The agricultural performance was primarily driven by a 7 per cent increase in livestock and livestock products. However, production of export crops decreased by 4 per cent, mainly due to lower output in tea and coffee.

The Minister of Finance and Economic Planning Uzziel Ndagijimana told reporters that the poor agricultural performance was due to adverse climate conditions. However, he said that the Government targets to invest more resources to increase production of tea, introduce new varieties of tea, and ensure competitive prices in the market.

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GDP is a key metric used to measure the economic performance of a country. It represents the total value of all goods and services produced within a country's borders over a specific period of time, typically annually or quarterly.

The economic growth seen in 2023 is higher than the government had initially projected.

The Ministry of Finance and Economic Planning had forecast the economy to grow at 6.2 per cent in 2023.

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Despite the improved economic performance, the Minister expressed concern over the growing depreciation of the Rwandan franc against major foreign currencies, the trend he said is linked to Rwanda’s external trade imbalance.

"Last year's droughts and floods resulted in reduced food production, further driving up food imports. The dollar deficit has increased, exerting pressure on forex demand, which contributed to the depreciation of the Rwandan franc," he noted.

Last week, the Rwandan Franc depreciated a marginal 0.2 per cent against the US Dollar to close at Frw 1,285.3 from Frw 1,282.4 the previous week, taking the year-to-date depreciation to 1.7 per cent.

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