Rwanda’s export earnings in the first half of this year dropped by 32 percent as import bills rose by 26.9 percent to give a trade deficit of $532 million (Rwf300.7b) or 13.59 percent.
According to statistics released last week by the National Bank of Rwanda (NBR), export receipts amounted to $83.68 million (Rwf47.2b) in the first six months of 2009 compared to $123.02 million (Rwf26.5b) in the same period last year.
All main exports recorded significant declines in value, except tea.
The decline in Rwanda’s net exports has been attributed to the global financial crisis which impacted prices and reduced demand while the upward trend of imports was a result of falling prices on the international market.
“However, there is a slowdown trend in imports since the second quarter of 2009, meaning that the observed increase in the first quarter 2009 can be related to end 2008 orders when the economic activity was still booming,” the monetary policy statement reads.
In the period under review, tea revenue earnings showed a slight increase of 1.2 percent to Rwf22.95 up from Rwf22.66m, becoming Rwanda’s top export revenue earner. The Central Bank said this was due to an improvement in prices which rose to $2.29 per kg from $2.08 last year.
The mining sector is the most affected with a decline in value of more than 40 percent, reflecting a fall in prices of tin by 37.6 percent, Coltan 30.1 percent and 7.1 percent.
Coffee exports also underperformed, with a respective decrease of 21.1 percent in value and 13 percent in volume, in comparison with the first half of 2008 as the average price decreased by 9.3 percent, from $2.45 per Kg to $2.22 per Kg.
The decrease in volume is due to the fact that processing started a bit late in all provinces except in the Western Province, due to the delay in coffee campaign financing.
However, OCIR Café, Rwanda’s coffee authority says the perspectives of coffee exports during the remaining period this year are expected to improve by 10 percent.
As a key indicator of economic performance, total turnovers recorded by large companies in industry and services sectors recorded an annual increase of only 7.68 percent and 4.68 percent during the first half of 2009 respectively.
Rwanda’s economic growth in 2009 is expected to fall below earlier projections of 5.3 percent if the current liquidity constraints in the banking system persist.
Kampeta Sayinzoga, Director of Macroeconomic Policy Unit in Ministry of Finance and Economic Planning said although cost of imports may fall, Rwanda’s ability to fund them. She said that less consumption of imports will reduce tax revenue as well.
Government forecasts show that foreign exchange receipts, Foreign Direct Investments (FDI), remittances and tourism will decline due to the global financial crisis while domestic investments will decline as credit becomes harder to obtain.