Rwanda’s impressive agriculture performance in the first quarter of 2009 could translate into strong growth in the real sector, according to the African Development Bank (ADB) Economist.
The agriculture sector which grew by 6.5 percent between February and June is expected to provide multiple pathways out of poverty, Leonard Rugwabiza an economist told Business Times last week.
As a result, the economy recorded an average growth of nine percent in the first half of 2009 to some extent due to the expanding industrial base.
It is said that growth in agriculture is about four times more effective in reducing poverty than growth from outside the sector.
Citing a survey done by the ADB in 2001 where 60 percent of the population was found to be living under the poverty line, Rugwabiza argued that growth in agricultural production will push more Rwandans above the poverty line and accelerate economic growth.
“We did the same survey five years later (2006) and the number had reduced to 57 percent. This means you got a reduction of 2 percent in poverty,”
However Rugwabiza explained that the reduction of poverty rates registered was lower as the growth was mainly coming from the boom in construction and service sectors.
In nominal terms, the survey also found out that inequality in the country was increasing.
“This is how the inequality comes about - as in what is growing at the time of five years it was construction and services. We also had agriculture but not as much as last year,” he explained.
Rugwabiza said that while inequality has increased over years, it is a normal process of economic transition.
“What happens is that when a country is growing , especially due to a boom in construction services those who are benefiting are people in urban areas. So it’s not broad based. It’s more concentrated.”
He praised government for it Vision 2020 Umurenge programme, saying it is helping to reduce extreme poverty.
Latest data from the National Institute of Statistics (NISR) shows that per capita incomes for individual Rwandans had grown above $500 in the first half of the year, from $492 in 2008.
The Economist also underscored that rural poverty will decline with more investment in the agricultural sector.
“Most people feel promoting agriculture is putting a lot of money. No Some of the things – change the way you are doing things,” he said, stressing the need to diversify investment in agriculture through introduction of crop intensification and increasing extension services.
The good performance in the agricultural sector has been attributed to the on-going programs on crop intensification, land consolidation, fertilizer application, introduction of good variety of seeds and an intensified terracing exercise.