KIGALI - Despite a looming global financial downturn, Rwanda’s economy showed resilience, growing at an average of nine percent in the first half of 2009.
Finance and Economic Planning Minister, James Musoni, said the economy grew by 10 percent in the first quarter of 2009 driven mainly by both an expanding industrial base and a good crop yield.
In the second quarter, the economy grew by 8 percent largely due to better agricultural output. On average, this means that first half GDP growth stood at 9 percent.
“If this global crisis had not occurred, we were on target to gain a double digit growth for this financial year,” Musoni told The New Times.
Musoni was speaking after unveiling new economic data produced by the National Institute of Statistics of Rwanda (NISR) yesterday.
The statistics showed that inflation was contained at single digit of 5 percent as of August compared to 22 percent at the beginning of the year.
The data also showed per capita incomes for individual Rwandans had grown above $500 in the fist half of the year, from $492 in 2008. Musoni was optimistic that by the end of this year, per capital incomes will stand at $520.
The Finance minister attributed good performance in the agricultural sector to the on-going programs on crop intensification, land consolidation, fertiliser application, introduction of good variety of seeds and an intensified terracing exercise.
Despite the on-going economic meltdown, Musoni said Rwanda’s economy is partly saved by the good fiscal and monetary tools it implemented as mitigating factors.
“We adopted two important strategies; the fiscal policy strategy, where we prioritised and increased our expenditure, and the monetary policy where we injected liquidity into the banks to enable them lend long-term.’
The Finance Minister said that despite a decline in exports, investments and high inflation rates worldwide due to increasing prices, Rwanda has been able to control the effect of the shocks, thanks to economic monitoring and good fiscal and monetary policies.
Major exports from the country including tea, coffee and minerals reduced by an overall 20 percent, but surprisingly, the tourism industry managed to maintain a steady foreign exchange inflow.
Musoni added that in the next few months, the economy will be largely boosted by a global economic recovery as well as a budding construction industry, huge investments in the infrastructure sector and massive construction projects which will create thousands of jobs.
Also expected to boost the economic growth is the Vision 2020 Umurenge to support low income citizens while a reforming banking sector will increase credit access.
Musoni predicted a bright performance in the second half