Rwanda's export earnings up despite low global prices
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Rwanda’s exports performed relatively better in both value and volumes last year compared to the previous year, the central bank says in its Monetary Policy And Financial Stability Statement released on Tuesday.
The country’s total export receipts increased by 4.7 per cent in value to $599.8 million (Rwf428.9 billion) from $573 million (Rwf409.7 billion) in 2013, while volumes increased by 5.1 per cent.
However, the increase was not big enough to narrow the country’s trade deficit with the import bill going up by 6.8 and 3.7 per cent in terms of volume and value, respectively.
John Rwangombwa, the National Bank of Rwanda (BNR) governor, said the big import expenditure widened the trade deficit by 7.5 per cent to around $1.8 billion, up from about $1.7 billion.
The country’s import cover also declined marginally to 25 per cent or 4.6 months of import cover, from 25.5 per cent in 2013, but the governor said there was no cause for alarm.
“We are comfortable with 4.6 months import cover since this is above our target of just above four months. We don’t expect the reserves to go below that, and neither do we expect any big challenges going forward,” said Rwangombwa.
He said the central bank is working with other government institutions to close the trade deficit by boosting exports of products such as horticulture; as well as investing in import substitution to increase domestic production of products that account for the bulk of imports, such as cement.
UN resident co-ordinator, Lamin Manneh, noted that the widening current account deficit is a big challenge, especially with the current poor performance of the Rwanda franc against the US dollar.
Rwangombwa said coffee performed well last year, buoyed by good prices on the global market, despite the low export volumes. The price of coffee was at $3.74 over the reporting period, up from $2.75 in 2013.
Rwanda exported a total of 15,970 tonnes of coffee worth $59.68 million over the reporting, up from $54.9 million in 2013, when 19,990 tonnes of coffee were exported.
Total mineral export earnings dropped by almost 10 per cent to $203.32 million (about Rwf145.4 billion) last year, from $225.7 million (about Rwf161.4 billion) in the same period in 2013.
However, cassiterite receipts increased by over $10 million to $71.95 million, from $61.07 million in 2013. This was despite the drop in cassiterite prices, which declined from $12.48 to $12.08. Over 5,950 tonnes of cassiterite were exported during the period, up from 4,900 tonnes in 2013.
David Bensusan, the Minerals Supply Africa chief executive officer, said mineral sector was affected by slow global economic growth and low prices on the international market. He was, however, optimistic that with improvement in the global economic arena, mineral prices would improve.
Both coltan and wolfram revenues declined; coltan fetching $104.8 million compared to $134.57 million recorded in 2013, while wolfram export earnings slowed to $26.59 million during the period from $30.05 million.
Tea exports declined from $55.48 million (about Rwf39.7 billion) in 2013 to $51.76 million (Rwf37.01 billion) last year, representing a 6.7 per cent drop in revenue.
Minerals and tea are some of Rwanda’s top foreign exchange earners. Rwangombwa attributed their poor performance to declining global commodity prices.
He said Pyrethrum shed a massive 54 per cent in revenue, from $3.98 million in 2013 to $1.83 million last year.
The crop’s export volumes declined from 30 tonnes to 10 tonnes over the reporting period.
Hides and skins raked in $14.22 million last year compared to $16.02 million in 2013.