Agriculture sector performance continues to be the main booster of the Rwanda economy, according to information availed by officials in the financial sector.
Francios Kanimba the Governor of Central Bank said recently that performance in the country’s agricultural performance continues to constitute the important stabilising factor of inflation in the country.
The governor also told stakeholder while presenting the ‘Monetary Policy and Financial Stability’ statement the National Bank of Rwanda (BNR) is working with other stakeholders to reform the management of the Agriculture Guarantee Facility to make it more suitable and accessible by farmers and other Small and Medium Enterprises (SMEs) operating in agri-business.
Rwanda’s economic growth declined significantly from 11.2 percent recorded in 2008 to 5.5 percent in 2009. However the agriculture sector performed well in 2009 growing at 10.4 percent. Officials said it was boosted by favourable weather conditions and government Green Revolution Program.
Despite the low growth rate achieved in 2009, the policy statement indicated that inflation has significantly declined, backed by good performance in food production, decline in worldwide consumer goods’ prices.
John Rwangombwa the Minister of Finance and Economic Planning attributed the growth in agriculture to the crop intensification programme that started in 2007 which enhanced land consolidation and the continued use of fertilisers.
”This programme is applied on 20 percent of available land and will be increased to 40 percent of the land, something which is expected to have an impact on growth in 2010. We are going to see the results in the season of March to June, if the rains wont be disruptive,” Rwangombwa said.
The policy presented said that in the year 2009, there was a sharp increase in both value volume in fertilisers with respective growth rates of 61.52 percent and 212.04 percent.
This was mainly attributed to the government’s policy that aims at increasing agricultural production so that fertilisers are abundantly imported and distributed to farmers on subsidized prices.
Kanimba added that, ”With its contribution to the achievement of the BNR monetary policy of maintaining low and stable inflation, Central Bank policies will support institutions aimed at increasing financing to the agriculture sector and related activities such as agro-processing and distribution.”
The governor also added that BNR is in discussion with several banks including Rwanda Development Bank (BRD) and Banque Populaire (BPR) to identify the constraints to agriculture lending.
”The results of these consultations will help BNR to restructure its facilities to improve incentives for agricultural lending.
They will also be used to advise government on policy actions to be taken to address the supply side constraints especially agricultural supply chain,” Kanimba said.
The results of the BNR policy statement survey indicate that Rwanda’s exports mainly food products in neighbouring countries increased as the crop intensification program generated significant production volume for some crops like cassava and maize.
This prompted him to call for the strengthening of the crop intensification program to take advantage of market opportunities in the region.