Economic diversification has kept growth rate strong - WB

Rwanda is among the countries that have registered economic progress by specialising in non-traditional exports, a new World Bank report states.

Rwanda is among the countries that have registered economic progress by specialising in non-traditional exports, a new World Bank report states.

The report titled; Africa’s Pulse, established that non-traditional exports, particularly vegetables and beverages, have been the benchmark for the country’s economic progress.

This analysis is backed by the 2014 Index by African Centre for Economic Transformation which names Benin and Rwanda among countries that are progressing at a faster rate.

The achievements can be linked to several business reforms and policies undertaken by the government to improve the country’s competitiveness.

“Our mandate is to continue coordinating reforms while learning from economies that are doing better than us. We are also consultating with experts from across the world on how we can further improve on our competitiveness,” Karim Tushabe, the coordinator of Doing Business Reforms unit at the Rwanda Development Board (RDB), said.

According to the new report, diversification has benefited the lower income earners, who are mostly involved in agriculture, and these account for about 80 per cent of the total households in the country.

Nonetheless, there has been an increase in the fraction of households engaged in the services sector at all segments of the distribution.

“Labour mobility from agriculture to services, and complementarities between the two sectors, could have contributed to the declining poverty levels in the country,” the report states.

Since 2006, Rwanda’s growth and development has been cemented in many pro-poor programmes, such as G’irinka, One Laptop per Child, and Nine Years Basic Education Policy, and, according to the report, this is reflected in a higher elasticity of poverty reduction of -1.25 between 2001 and 2012.

“This latter period also coincided with a period of rapidly increasing agricultural productivity and production, as well as diversification into off farm activities, rapidly falling fertility rates, and rising remittances,” the report states.

“Agriculture is the backbone of the Rwandan economy. Although the share of agriculture in GDP fell from 45 per cent in 2001 to 34 per cent in 2011, agriculture remains the primary occupation for over 70 per cent of working Rwandans. Along with boosting agricultural performance, increasing rural income diversification will help sustain the pace of poverty reduction and economic growth,” it adds.

Generally, the bi-annual report forecasts that Africa’s growth may exceed five per cent in 2015 and 2016, although Ebola and terrorism could pose a major concern.

It further shows that African economies continue to expand at a moderately rapid pace, with regional GDP growth projected to increase to 5.2 per cent annually between 2015 and 2016 from 4.6 per cent in 2014.


Have Your SayLeave a comment