Rwanda’s trade deficit significantly in the first six months of 2017 by over 25 per cent compared to the corresponding period last year, new data shows.
According to the latest monetary policy and financial stability statement, the gap between import and export in the first half of the year stood at $671.2 million compared to $902.3 million in the same period last year.
The narrowing of the trade deficit can be attributed to a number of factors, including recovery of international commodity prices which has boosted the performance of exports.
The statement, presented yesterday by central bank governor John Rwangombwa, shows that formal exports grew by 39.8 per cent.
Formal imports also declined by about 10.6 per cent largely due to increased consumption of locally-made products under the Made-in-Rwanda campaign.
According to Rwangombwa, total exports increased in value in the first half of the year to $375.92 million compared to the same period last year where they fetched $268.93 million.
Traditional exports, which include tea, coffee, minerals, pyrethrum as well as hides and skins, raked in $116.56 million in the first half of the year compared to $98.97 million last year.
In the bracket, the mining sector (coltan, cassiterite and wolfram) contributed the largest growth as their export value grew form $40.73 million in the first half of last year to $48.25 million this year.
Non-traditional exports, which in Rwanda are dominated by other minerals (other than coltan, cassiterite and wolfram), milling products and other manufactured products increased by 95.2 per cent in value and 30 per cent in volume.
Imports dropped by about 10.6 per cent to $1,047.1 million this year from $1,171.3 million in the first half of 2016.
Underpinning good performance
Rwangombwa said the drop in imports was partly due to the completion of large infrastructure projects as well as a result of the positive impact of the Made-in-Rwanda campaign.
For instance, cement imports dropped by 10.9 per cent following an increase of production by CIMERWA from 134,001 tonnes to 162,351 tonnes in the first half of this year.
Fertiliser imports also dropped as a local firm, Agro-processing Trust Company, went operational improve the efficiency of distribution and management of the commodity.
Trade with East African member states went up in the first half of the year to about $72.2 million from $66.6 million last year as exports to Kenya and Uganda grew.
Main exports to EAC countries include tea through the Mombasa Auction, petroleum products to various airlines at the Kigali International Airport as well as Burundi, Sorghum to Uganda and raw skins and hide.
Rwanda, in turn, imported goods worth about $221.6 million from EAC member countries.
Francois Kanimba, who was until yesterday, the Minister for Trade and Industry, attributed the reduction of the trade deficit to contribution of the increased production and consumption of locally-made goods.
He said the increased contribution of non-traditional exports to receipts was a positive trend and it showed signs of exports diversification.
Commenting on the state of the economy, Rwangombwa said improvement of global demand is expected to lead to an increase in Rwanda’s export revenue as well as easing inflation to around 5 per cent by the end of the year.