The government has set an ambitious target of rebounding economic growth to 8 percent of real Gross Domestic Product (GDP) next year, up from this year’s overall economic growth projections that are expected to be in the range of 4 to 5 percent.
According to the Ministry of Finance and Planning, the economy should get back on track to achieve impressive growth figures as the global recession which led to a general slow down in the economy this year is coming to an end.
“This year we have not been able to achieve our target because of the financial crisis. But the economy should perform much better next year as global financial crisis is coming to an end, our economy will fully recover,” John Rwangombwa, the Minister of Finance told Business Times on Tuesday.
Rwangombwa also noted that government has put in place strategies to fast track economic growth including facilitating the financial sector to be able to release resources to the economy.
During the first half of this year, credit to the private sector declined by 3.6 percent to Rwf329.4 billion.
“More resources will stimulate the service sector which did not do well this year,” he said.
Due to the effect of the external shocks of the global financial crisis on the economy, overall economic growth this year was earlier projected to fall to 5.3 and 7 percent from 11.2 percent registered last year.
The conservative estimates in the Gross Domestic Product (GDP) growth rates are a result of the slowdown in the manufacturing and service industries.
The Finance Minister also mentioned that emphasis will also be put on modernization of agriculture through crop intensification program.
Large projects will focus on prevention of soil erosion, land management and irrigation. It will also increase access to the market through feeder roads management.
In the second quarter of this year, the economy grew by eight percent, largely due to better agricultural output. In 2010 government will also focus on reducing the growing balance of payment deficit.
The value of exports (mainly commodity) for this year also declined in the range of 29 percent from January to October as compared to the same period last year.
However, imports increased by 24 percent in value and volume in the third quarter of 2009 on account of a rise in imports of consumer goods, fuel and capital goods.
“We already have an export promotion strategy to increase exports.
For imports we are looking at supporting local industries that can produce goods locally such as construction materials,” Rwangombwa said.
While per capita incomes for individual Rwandans in the first half of this year has to grow to $ 492 from $236 in 2000, for 2010 the target is to maintain it at least $ 400.