Rwanda’s economy grew 8.6 per cent in 2018 with the Gross Domestic Product now estimated at Rwf8,189 billion, up from Rwf7,600 billion in 2017, official figures released yesterday show.
A new report by the National Institute of Statistics of Rwanda (NISR) indicates that last year the economy expanded more than the initial projection of 7.2 per cent by the International Monetary Fund (IMF).
The strong growth arguably provides a hint on where the economy is heading despite trade tensions and economic slowdown globally.
The 8.6 per cent growth rate was achieved on the back of 10.4 per cent growth witnessed during the first quarter of 2018, 6.8 per cent during the second quarter, 7.7 per cent for the third quarter, and 9.6 per cent for the fourth quarter.
A better-than-expected performance propelled the country’s economy, with the GDP per capita now at $787, up from $774 the previous year.
According to NISR director-general Yusuf Murangwa, the strong growth was largely down to the good performance of key sectors, such as services and agriculture, as well as a rebound witnessed in such sectors as construction, and wholesale and retail.
“This time around, almost all sectors performed well. For example, in the fourth quarter we saw construction growing by 10 per cent,” he said.
In 2017, Murangwa said, “we indicated that big projects were being finalised, and expected a slowdown in construction. I remember at some point the sector growth was negative, but it is now recovering.”
The agriculture sector posted a robust 6 per cent growth rate, industry grew by 10 per cent, while services grew 9 per cent.
Growth in agriculture was mainly attributed to the 3 per cent increase in the harvest of food crops during seasons B and C in 2018, as well as livestock and livestock products that grew by 14 per cent in the same period.
Agriculture, which includes food and export crops, forestry, fishing and livestock and livestock products, contributed a significant 29 per cent to the GDP, only behind the services sector at 48 per cent.
Food crops, however, decreased by 4 per cent, while exports grew 10 per cent.
Generally, imports of goods and services increased by 9 per cent (at 2014 prices) with exports of goods and services increasing by 1 per cent in the year 2018.
The 12 per cent growth rate of the industry sector witnessed during the fourth quarter of 2018 was mainly boosted by construction activities which grew by 20 per cent, and manufacturing which grew by 13 per cent.
Under the manufacturing sector, food processing increased by 10 per cent, locally-made products such as textiles and leather increased by 26 per cent thanks in large part to the Made-in-Rwanda policy, manufacturing of metal products increased by 38 per cent, while non-metallic products increased by 15 per cent.
Government officials and independent economists are in agreement that the Made-in-Rwanda policy has started paying off.
“The growth shows that such policies have started bearing fruit,” Teddy Kaberuka, an economist based in Kigali told The New Times.
In the service sector, transport grew by 16 per cent boosted by air transport, which increased by 36 per cent, figures show.
Wholesale and retail trade grew by 14 per cent, hotel and restaurant 11 per cent, financial services 12 per cent, Information and Communication Technology 14 per cent, while public administration services grew by 27 per cent.
The improved growth in wholesale and retail – which had slowed down in 2017 – points to growing purchasing power of the population, Murangwa said.
The growth in hotel and restaurant was in part due to growing conference tourism, experts say.
Government has been aggressively promoting the sector and, as a result, Rwanda’s standing as a conference destination is growing by the day, bringing in more and more visitors.
Uzziel Ndagijimana, the Finance and Economic Planning minister, told journalists that government is eager to maintain the growth trend through 2019, revealing that a team of IMF experts were in Rwanda conducting analysis for this year’s projected economic growth.
Based on a three-year projection, the economy is estimated to grow 7.8 per cent in 2019. The IMF is expected to determine whether to maintain this projection or not, after fresh analysis.
Going forward, economist Kaberuka sees growth being on a positive trend.
“Definitely there could be adjustments based on current market situation, but there would be no big change,” he noted.