News Column

Over Five Percent Growth for Rwanda

September 1, 2014

The Rwanda economic growth rate for 2014 is forecasted at 5.7% with a rise to 6.6% in 2015.

This is the gist of the latest World Bank Rwanda Economic Update report that was launched last week at Hotel Mille Colline.

"Rwanda's growth rate for the past years has been impressive and what is needed now is a significant structural transformation of the economy from one that is characterized by a large public sector to private investment," Carolyn Turk World Bank Country Manager for Rwanda said.

She said this would minimize current vulnerabilities in the economy and enable the country to sustain its high growth rates into the next decade.

Rwanda's economic growth faced a setback in 2013 falling to 4.7% which is the lowest growth since 2003 according to the report and this was because of aids shortfall in 2012 which resulted to delays in budget expenditure.

Because of a strongly developed services sector growth of Rwanda picked up rising to 7.4% in the first quarter of 2014.

"We are hopeful that growth in 2014 will be higher than that in 2013 and this is because of the turnovers in services and industries that have picked up," Toru Nishiuchi, World bank economist and co-author of the report said.

He said the lagged effect of the aid shortfall to the economy was extended to the second half of 2013 which affected both private and public sector activities but there was signs of recovery in 2014.

World Bank this time looks at mining sector as one sector that can help Rwanda achieve its development plans if fully developed.

"Investment in mining in the past few years has contributed to an increase in mineral exports which accounted for 40% of total goods exports in 2013," Nishiuchi said.

Mining in Rwanda is currently on small-scale but the sector still contributes to national development.

This is why the government aims at changing this sector to a semi-industrial sector.

This report indicates that production capacity of landlocked country's mining sector has progressively increased with export earnings reaching $225million in 2013.

Rachel Perks, WB Mining specialist and co-author of the report said the sector has contributed to job creation and foreign direct investment.

"Mining will help the country create more off- farm jobs which is one important pillar of the government EDPRS2," she said.

This sector has created over 33.000 jobs and again it pays more as compared to other jobs in rural areas.

To increase on volumes of minerals from the country, different strategies have been developed by the government.

"The duration of getting licenses has been reduced, legal framework on mining has been changed, management of the mining licenses among others have been addressed," Michael Biryabarema said.

"Government of Rwanda over the past 3 years has been putting in about Euro2million in attracting hot tracks and mineral prospection to do mineral evaluation so as to attract more investors to the sector helping it contribute more to national development," he said.

"Government again aims at looking at efficiency of mineral production so quality minerals can be produced which will help it reach its targets of EDPRS2," Biryaberama said.

Rwanda government aims at achieving $400million by 2017 from $160million achieved in 2012 and this will be so if challenges faced in the mining sector are addressed.

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Source: AllAfrica

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