Rwanda is among the countries that posted a solid economic performance in 2013 despite limited natural resources and financial shocks, a new World Bank economic outlook report on sub-Saharan Africa has indicated.
According to the report, released in Washington DC, on Monday, sub-Saharan countries, including Rwanda, Mauritius, Ethiopia, Mali and Democratic Republic of Congo posted growth in export services, tourism, infrastructural investments and the service industry.
“In both Mauritius and Rwanda, rapid expansion in modern services led to increased activity in tradable business and financial services resulting into increased employment opportunities, and agriculture productivity,” the report says.
Meanwhile, economic growth rate on the continent is projected to reach 5.2 per cent in 2014, up from 4.7 per cent in 2013.
Capital flows to sub-Saharan Africa continued to rise, reaching an estimated 5.3 per cent of regional GDP in 2013, significantly above the developing-country average of 3.9 per cent.
Net foreign direct investment (FDI) inflows to the region grew by 16 per cent to a near-record $43 billion in 2013, boosted by new oil and gas discoveries in many African countries, the report indicated.
Inflation slowed in the region, growing at an annual rate of 6.3 per cent in 2013, compared with 10.7 per cent a year ago, thanks to the lower food and fuel international prices and the vibrancy of the tourism industry.
Finance minister Claver Gatete said Rwanda is working round the clock to ensure that the country’s economic growth rate picks up from last year’s 4.6 per cent.
“Maintaining macro-economic stability, ensuring increased agro productivity and attracting more foreign direct investments while supporting the private sector will facilitate rapid economic growth development,” Gatete told this paper.
He added that government is currently working with its development patterns and soon they will be issuing their economic performance projections.
Makhtar Diop, the World Bank Group vice-president for Africa, said investing more in high-quality university programmes, particularly applied sciences, technology, and engineering while keeping strong macro-economic policies could dramatically increase the region’s competitiveness, productivity and growth.
“Strategic reforms are needed to expand young people’s access to science-based education at both the country and regional level, and to ensure that they graduate with cutting-edge knowledge that is relevant to the needs of private sector employers,” Diop said in a statement.
Dr Thomas Kigabo, the chief economist of the National Bank of Rwanda, said the economy will perform better because of the central bank’s decision to keep its lending rate at 7 per cent and the ‘excellent’ monetary policy in place.
“We are already seeing positive results at least for the past few months, credit to the private sector is increasing, and we have managed to contain inflation levels below 5 per cent as part of our macro-economic policy,” Kigabo said.
Risks looking out for
A weaker market demand for metals and other key commodities, combined with increased supply, could lead to a sharper decline in commodity prices while a decline in Chinese market demand for minerals could make the situation worse, according to the report.
Increasing food prices, political uncertainties, especially in South Sudan, and Central African Republic are the key areas that require close attention by governments, the report warned.