Economy grows 8 per cent

Rwanda’s economy braved uncertainties presented by aid cuts and the weak global economy to grow by eight per cent last year, exceeding the earlier projected target of 7.7 per cent.The growth was boosted by the booming services sector that grew 12 per cent and contributed 45 per cent of the GDP, agriculture, which added 33 per cent to the GDP even if it only grew three per cent, as well as industrial sector that grew by seven per cent, contributing 16 per cent of the GDP, the Ministry of Finance and Economic Planning and the National Institute of Statistics of Rwanda said in a joint statement yesterday.Overall, the country’s gross domestic product (GDP) at current prices was estimated to be Rwf4,363b (around $6.8b) in 2012, up from Rwf3,814b (around $6b) the previous year.There were fears that the economy would grow at a modest rate of 7.7 per cent last year due to the sovereign debt crisis in Europe and concerns about the fiscal cliff in the US, as well as suspension of budget support by some donors over allegations that Rwanda was supporting the eastern DR Congo-based M23 rebels.But the official final figures for last year indicated a strong economy and continued appetite for investors to pour in money.“This was a check on whether we are a stable economy,” finance minister Amb. Claver Gatete noted while commenting on the 2012 figures in comparison to the then economic context.“This shows that the economy is resilient. For us this is good news.”The figures have estimated the level of investment in the country in 2012 at 23 per cent, specifically noting “high levels of construction activity and imports of durable capital goods such as construction materials, cars, home appliances, consumer electronics and furniture.The level of investment in Rwanda, which economic statisticians have referred to as gross capital formation, was estimated at 21 per cent in 2011.The GDP per capita has also been estimated at $644 in 2012, up from $593 in 2011.Amb. Gatete said the figures were good news in the context of Rwanda’s vision to achieve a per capita income of $1,000 by the year 2020.“We find that actually, by 2017 we will have reached $1,001 per capita and, if we project up to 2020, we find that we are exceeding the initial projection,” Amb. Gatete.More stable economyThe finance minister said the government would focus on increasing the amount of capital that is available for investment and spending in the country over the next few years by scaling up the Rwanda Stock Exchange to have more companies listed and their shares traded to attract cash.The country’s commercial banks, insurance companies and pension funds, as well as Saccos will also be strengthened to build a more self-reliant economy, he added.Describing the potential of the country’s financial sector, Amb. Gatete said almost Rwf1.3 trillion was in assets for commercial banks, Rwf99b for the micro-finance sector, about Rwf235b for the insurance sector, and Rwf350b for the pension sector Amb. Gatete said the government was keen to make the financial sector more responsive to the country’s economic needs, especially the development of a strong private sector.“If you can help all those kind of assets, they can contribute and raise more resources to support economic development by lending to the private sector,” he explained.The government will also strengthen co-operation with the private sector through Public Private Partnerships (PPPs) to implement important economic projects.