Government revises GDP to 5.7 percent from recent projections
Rwanda’s Minister of Finance and Economic planning has called for the Group of 20 industrialised and developing nations (G20) to honour their aid commitments, when they meet in London.
The G20 summit that is meeting in London on the 2nd of April is expected to discuss necessary steps of ending the global economic crisis.
James Musoni told The New Times on Monday that the G20 solutions must also serve to address Africa’s problems, particularly Rwanda whose mining sector has been affected by the global economic downturn.
As a result of the economic recession, Musoni said that Rwanda’s Gross Domestic Product (GDP) growth has been revised to 5.7 percent from the Economic Development and Poverty Reduction Strategy (EDPRS) projection of 7.2 percent in 2009.
This is 5.4 percent less GDP growth Rwanda attained last year.
“Remittances are also not coming in as expected,” the Minister said without stating the margins by which they have fallen.
He suggested that Africa’s commercial banks should be facilitated by donors in order to help them extend lending to development projects.
The summit comes when the World Trade Organisation (WTO) economists early last week projected that global exports will drop down by roughly 9 percent in volume terms in 2009. It is the biggest contraction since the World War II.
The WTO economists said that in developing countries, which are not so dependent on trade for growth, exports will shrink by some two to three percent in 2009.
Musoni said that the balance of payment for African nations is expected to drop considerably as a result of reduced trade volumes, caused by the current global recession.
“They (G20) should extend grants to cover the deficit,” he added.
As a result of the downturn in the global economy, experts have predicted that development aid flow to Africa is likely decline. Moreover, African leaders will be hoping that their rich counterparts honour their commitments.
“Some countries have indicated that they are not capable of meeting these commitments,” South Africa’s Minister of Finance Trevor Manuel told journalists after he and other African leaders met British Premier Gordon Brown early this month.
Brown is expected to transmit Africa’s message during the summit.
Ethiopian Prime Minister Meles Zenawi said that the critical issues, African countries wanted addressed were additional funds and ease of access to those funds.
Zenawi, who will attend as the Chairman of the New Partnership for Africa’s Development (NEPAD) suggests that Africa be given a stimulus package in the region of $50 billion.
The G-20 is made up of 19 world biggest economies including Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia and Italy.
They also include Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America, and also the European Union who is represented by the rotating Council presidency and the European Central Bank.