Rwanda registered a strong economic recovery since last year. However, unemployment remains a major issue for moderate productivity jobs, according to the latest Rwanda Economic Update by World Bank Group. The report, released on February 2, was issued by the global institution with an aim of boosting regional integration in the post-Covid era. It indicates that Rwanda’s Gross Domestic Product (GDP) increased by 11.1 per cent in the first nine months of 2021, reflecting a broad-based recovery from the 2020 recession. This is due to the expansion of industrial production which grew by 16.5 per cent and agricultural output which rose to 6.8 percent in the same year, while traditional exports (coffee, tea, cassiterite, wolfram, and coltan) increased by about 35 per cent in the first nine months of 2021. In 2020, according to the National Bank of Rwanda, the economy fell by 3.4 percent, representing the first economic slump since 1994. The factor for such an economic slump is the Covid-19 pandemic, including measures to control it, such as lockdowns that sharply reduced economic activities in 2020. However, the economy was projected to grow by 10.2 per cent in 2021, after being revised from what was initially 5.1 per cent. Despite the significant financial packages such as the Economic Recovery Fund, which were sunk into different sectors, the report observed that that the level of unemployment continued to slump, women being the most affected. “While the GDP got close to the pre-pandemic level, the unemployment rate remained more than 13 percentage points above levels at the beginning of 2020, with female employment deteriorating,” the report states. The female unemployment rate is now at 13.6 per cent higher and male unemployment rate 7.7 per cent higher than in the first quarter of 2020, it notes. “This reflects women’s greater participation in the more slowly growing agricultural sector and lesser participation in the more rapidly growing manufacturing and construction sectors.” Rolande Pryce, World Bank Country Manager said; “While the current recovery shows that Rwanda’s robust fiscal and medical responses to the crisis have had a notable impact on the economy, the government will need to continue its efforts to promote a more broad-based recovery that extends benefits to rural areas and protects the wellbeing of the most vulnerable members of society, including women.” Boosting regional trade According to the report, Rwanda has benefited from regional cooperation to reduce drastically the cost of trade in recent years on both Central and Northern corridors, thus greatly facilitating its access to international markets. However, “persistent security concerns among East Africa Community members, leading to temporary border closures, create uncertainties that impede trade and Rwanda’s potential as a regional logistic hub,” it added. Calvin Djiofack, World Bank’s Senior Economist for Rwanda said that Rwanda has yet to fully achieve its trade potential with regional partners, “notably, due to a relatively narrow export product base, discriminatory non-tariff barriers within the region, and persistent regional trade infrastructure gaps.”
