Rwanda’s economy has maintained a steady growth of 7.4% thanks to a booming service industry which rose by 22.4% from 12.6% in the first quarter.
Central Bank Governor, John Rwangombwa said private sector financing grew by 47.8% from 12.4% of 2013 in the same period.
Central bank Chief Economist, Dr. Thomas Kagabo, attributes said liquidity into commercial banks was a major tool that allowed them to lend more and remain stable.
Meanwhile all construction projects that had been put on complete hold at the end of 2013, have contributed 8%. Manufacturing made a turnover of 13.1%.
Rwanda is experiencing growth while recovering from a meltdown that dragged the economy to 4.7% in 2013 due to earlier financial aid cuts.
Governor Rwangombwa said the growth trend is expected continue despite his earlier projection of a 6% growth.
However, despite the positive growth, Rwanda faces a staggering trade imbalance due to increased imports; valued at 75.4% from 72.5% in the same period in 2013.
Revenues from minerals dropped sharply as a result of a fall in global prices and international blockade of African minerals to global markets.
Revenues from major minerals Coltan, Cassiterite and Wolfram drop by 18.6%. Coltan was slapped the sharpest decline of 30.5%, fetching only $41.7m.
Inflation, despite the 1.9% depreciation of local currency against the dollar remained below 5%.
Agriculture that employs 70% of the population, remains an untapped. Rwangombwa said the sector continues to suffer from minimal financing due to its risky nature. “There is money but agriculture projects are risky…banks are only interested in bankable projects.”
He said efforts to revamp cooperatives (SACCOs) will help increase financing in the sector, especially in mechanized farming.
Rwanda’s coffee export volumes declined by 31.2% blamed on bad weather in the fourth quarter of 2013 coupled with low levels of stock, 2,560T at the end of 2013 compared to 3,262T during the end of 2012. Tea prices this year dropped from $2.85/Kg in January to $2.12/Kg in June leading to contraction of value of tea exports by 10.2% despite a rise of 5.1% in volume.
The decline in tea prices was attributed to a surge in tea supply at the Mombasa auction in Kenya, where 71% of Rwanda’s tea competed with tens of other tea growing countries.
By Patrick Bigabo