Real estate propels service sector growth

The contribution of services sector to Rwanda’s economic growth last year was big, owing to real estate, a report by the National Institute of Statistics of Rwanda (NISR) released on Tuesday shows. Rwanda’s economic growth exceeded the previously projected 5.2 per cent to grow 6.1 per cent last year, a positive performance that was mostly driven by fourth quarter growth of 10.5 per cent. The economic growth was mostly driven by agriculture, industry, and services which contributed 31 per cent, 16 per cent, and 46 per cent, respectively. Data from the National Institute of Statistics of Rwanda indicate that services that drove the economy last year include trade and transport, hotels and restaurants, information and communication, as well as financial services. Other key services include real estate activities, professional, scientific and technical activities, administrative and support service activities, public administration and defence, compulsory social security, education, human health and social work activities, as well as cultural and domestic services. In a breakdown, real estate services such as individual homes occupancy or sales on homes occupancy grew by 5 per cent in 2017, putting the share of real estate to the entire national GDP at 8 per cent. The second biggest contribution to the services sector is occupied by wholesale and retail trade while the third involves public administration, cultural and domestic services, as well as administrative and support service activities such as clearing agencies, tour operators, and auditing services. In the economic growth last year, hotel services grew by 10 per cent, while transport grew by 11 per cent mostly driven by air transport expansion and related services. In an interview, Jean Claude Mwizerwa, the acting director of economic statistics department at NISR, also said the share of real estate services to services sector last year was appreciable. National Institute of Statistics of Rwanda figures indicated that in the year 2017 the country’s Gross Domestic Product (GDP) was estimated at Rwf7,597 billion up from Rwf6,672 billion in 2016. The contribution posted by the services sector to the country’s economy last year is commendable and well in line with the Government of Rwanda’s goal to build a service based economy, according to Léonard Rugwabiza, the chief economist at the Ministry of Finance and Economic Planning. Talking to The New Times yesterday, Rugwabiza explained that the growth in hotel services is linked to the country’s budding tourism sector and he projected that hotel services will continue to grow as Rwanda continues to receive guests. “Hotel services growth means that tourism is also growing. The more efforts we put in growing our tourism sector, the more hotel business will grow,” he said in an interview. Rugwabiza said that the projection is for the services sector to keep growing in the country. “It is what we want as Rwanda and in the future it should grow to 50 per cent of Gross Domestic Product (GDP). We want Rwanda to be a service-based economy,” Rugwabiza said. editorial@newtimes.co.rw

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Real estate propels service sector growth