Govt looks to inter-sector linkages to spur growth

The government is counting on strong inter-sector linkages to spur economic growth, increase household incomes and reduce poverty levels. Amb. Claver Gatete, the minister for finance and economic planning, highlighted the strategy, yesterday, in Kigali during release of last year’s gross domestic product (GDP) figures. The minister said the strategy will have a multiplier effect on the country’s economic growth rate levels. The country’s economy grew by 6.9 per cent in 2015 down from 7 per cent registered in 2014, according to the figures released by the National Institute of statistics of Rwanda (NISR). Economic activity in 2015 remained sound and impressive despite the global economic slowdown, according to the figures. For example, Rwanda’s GDP was estimated at Rwf5.837 trillion in 2015, up from Rwf5.395 trillion in 2014. The services sector continued to lead the impressive growth, contributing 47 per cent to the national GDP compared to 33 per cent contribution from the agriculture sector and only 14 per cent shares, which came from the industry. Yusuf Murangwa, NISR’s director-general, who presented the figures at a joint media conference with Amb. Gatete, said both the service sector and the industry grew by 7 perc ent to keep the economy stable. Sector contribution Analysis of individual sector contribution to GDP growth shows that the services sector led the pack, followed by the agriculture and industry sectors, respectively. According to Murangwa, in 2015 export crops growth was rescored at 13 per cent and were mainly boosted by coffee whose output increased by about 11 per cent. Equally, growth in the industry sector was largely inspired by a 10 per cent increase in the construction sector.However, mining and quarrying activities dropped by 9 per cent, both in quantity and value. “In real terms, 2015 estimates, calculated based on 2011 prices, indicate that GDP was 6.9 per cent, which is slightly lower than the projected 7 per cent,” said Murangwa. The latest figures echo earlier projection that indicated a slowdown in economic growth emanating from global economic shocks. Murangwa addresses the media in Kigali yesterday. (Timothy Kisambira) The Rwanda Economic Update Report, released by the World Bank, last month, projected the country’s economy will grow by at least 6.8 per cent this year and rebound to 7.2 per cent in 2017. The report warned of the dangers and threats of a slowdown in both Chinese and European economies, and a decline in international commodity prices, particularly that of oil and minerals, will have on emerging economies like Rwanda. Linking sectors However, as a counter measure, Minister Gatete said government will continue to create strong linkages between the country’s agriculture sector and industry to ensure economic sustainability. More efforts and resources will be invested to ensure value addition to enhance the country’s competitiveness in regional and global markets. To increase industry’s contribution to GDP, Robert Bayigamba, the chairperson of Rwanda Manufacturers’ Association, told The New Times in an earlier interview that there was need to promote consumption of Made-in-Rwanda products to spur the sector’s growth. The Made-in-Rwanda concept was a key topic at the just-concluded 13th National Leadership Retreat and it has since generated a lot of enthusiasm from both policy-makers and sector players who now view this campaign as the best alternative to correcting country’s trade books. The government is also pondering ways to reduce the cost of production so that the private sector can become more competitive and drive economic growth to a double digit figure of 11.5 per cent by 2018. According to the second Economic Development and Poverty Reduction Strategy, government targets to increase growth in the agriculture sector from current 5 per cent to more than 8.5 per cent in the next two years. editorial@newtimes.co.rw

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Govt looks to inter-sector linkages to spur growth