A large increase in exports this year is expected to narrow Rwanda’s widening trade gap, underlining strong recovery of the economy from the external shocks of the financial crisis.
Latest official figures from the central bank show that during the first 9 months of 2010, Rwanda’s exports increased by 30.5 percent and 3.6 percent in value and volume, respectively.
This is in contrast to a significant decline of 29 percent recorded in value last year during the same period.
In an interview with Business Times on Monday, John Rwangombwa, the Finance Minister said that export value has been largely boosted by overall improvement in commodity prices on international markets.
“We had good investments in coffee and we are seeing the results now. We have also seen an increase in tea,” he said, referring to the two commodities as the key drivers of improved export performance.
Coffee, tea and minerals remain dominant in the country’s exports, accounting for 67.9 percent of the total export earnings in the first nine months this year.
Tea exports have continued to perform better in both value and volume, increasing by 20.9 percent and 18 percent respectively mainly as a result of high international prices that rose from an average of $2.50 per kg to $2.56 per Kg.
The Minister said the national export diversification strategy, which will be unveiled next month will help improve exports needed to close in the huge trade gap.
The strategy will focus on increasing the value added of existing export sectors and developing new products and services.
He pointed out the recent agribusiness forum that focused on promoting horticulture and the tea sectors as part of the wider efforts to boost exports.
“This is one area where we expect to see increased exports and tourism where we are making big investments.” he added.
The central bank forecasts that this year the balance of payment will narrow with moderate deficit of $9.4 million from a surplus of $144.8 million in 2009.
However, the mining sector underperformed as its exports value slightly increased by 1.9 percent while volume fell by 16.5 percent on average. This poor performance is attributed to declining in demand on international markets for most of minerals.
According to the central bank, imports value has seen a moderate increase this year of 2.9 percent compared to last year during period under review. This increase is attributed to 12.8 percent increase in imported energy, 12.3 percent consumer goods and 9.8 percent increase intermediate goods as capital goods declined by 16 percent in value.
Last year exports fetched $193 million about $74 million lower than 2008 performance due to weaker global demand as well as low domestic production.