Consolidating economic growth gains vital

Last week, the Ministry of Finance and Economic Planning released the country’s growth report. According to the report, the Rwandan economy grew by eight per cent in 2012, exceeding the earlier projection of 7.7 per cent.

Last week, the Ministry of Finance and Economic Planning released the country’s growth report.

According to the report, the Rwandan economy grew by eight per cent in 2012, exceeding the earlier projection of 7.7 per cent.  

This is a big achievement given the numerous uncertainties presented by aid cuts and the weak global economy.

The growth was boosted by the booming services sector that grew by 12 per cent and contributed 45 per cent of the GDP, agriculture which added 33 per cent as well as the industrial sector that contributed 16 per cent of GDP.

In the report, the finance minister said 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.

This is obviously a positive step that not only shows a clear work plan but also clear focus.

The challenge will however be on how to execute this good work plan.

Besides, there is need to maintain an environment that will spur local investment and boost the country’s exports to create jobs.

Before laying out these plans, the ministry through its technocrats, should plan for anticipated and unanticipated challenges.

Developing countries like Rwanda need to prioritise domestic productivity and also exercise prudence in the country’s fiscal and monetary policy management in order to consolidate economic growth gains, as the World Bank noted in its latest Global Economics Prospects.

As the World Bank noted, the world economy remains fragile. This calls for raising of the growth potential of economies among developing countries like Rwanda as well as strengthening buffers to check external risks.

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