IGIHE

Category: Economy

  • Rwanda’s GDP grows by 6.3% in second quarter of 2023

    During the second quarter, the service sector contributed 45% of GDP, agriculture contributed 27%, industry contributed 20%, while net direct taxes accounted for 7%. The agriculture sector did not exhibit any growth when compared to the second quarter of 2022. Within agriculture, export crops increased by 2%, buoyed by a 14% increase in tea production, although coffee production decreased by 11%. The production of food crops decreased by 3% due to a lower harvest in Season A of 2023 compared to Season A of 2022.

    The industry sector grew by 6%, contributing 1.1 percentage points to the overall GDP growth. Within the industry, mining and quarrying activities increased by 7%, manufacturing activities grew by 8%, while construction activities increased by 4%.

    The growth in manufacturing is primarily attributed to a 9% increase in food processing, a 6% increase in the manufacturing of metal products, machinery, and equipment, a 14% increase in the manufacturing of chemicals, rubber, and plastic products, a 32% increase in the manufacturing of wood and paper printing, and a 9% increase in the manufacturing of non-metallic minerals. However, manufacturing of beverages decreased by 2%.

    The service sector increased by 10%, contributing 4.8 percentage points to overall GDP growth. Within services, wholesale and retail trade increased by 6%, while transport services increased by 8%.

    Among other services, hotel and restaurant services increased by 7%, information and communication services increased by 37%, financial services increased by 5%, professional, scientific, and technical activities increased by 1%, real estate activities increased by 2%, while education services increased by 28%, public administration increased by 21%, and health services increased by 7%.

    In the second quarter of 2023, total final consumption expenditure increased by 3%, with household final consumption decreasing by 4%, while government final consumption increased by 31%. Exports of goods and services increased by 23%, while imports of goods and services decreased by 4%. Gross Capital Formation decreased by 9%.

    The bird view of Kigali Special Economic Zone in Masoro. The growth in manufacturing is primarily attributed to a 9% increase in food processing.

  • Rwanda’s inflation increases by 12.3 percent in August 2023

    In August 2023, the category of ‘Food and non-alcoholic beverages’ witnessed a substantial annual increase of 24.6 percent, along with a monthly rise of 1.8 percent.

    Meanwhile, ‘Alcoholic beverages, tobacco, and narcotics’ registered a 12.2 percent annual increase but saw a 1 percent decrease on a monthly basis. Transport costs increased by 7 percent annually and by 2.5 percent on a monthly scale.

    The data also revealed that “local products” experienced a 13.3 percent annual increase and a 0.6 percent monthly increase. On the other hand, the prices of “imported products” rose by 9.3 percent annually and by 1.5 percent monthly.

    Prices for “fresh products” surged by 29.8 percent year-on-year and 2.7 percent month-on-month.

    Meanwhile, “energy” prices increased by 3.2 percent annually and 0.3 percent on a monthly basis.

    The “general Index excluding fresh products and energy” also saw an increase of 8.4 percent on an annual basis, with a 0.3 percent monthly increment.

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  • BNR increases lending rate to 7.5 percent

    The decision was reached during the quarterly meeting of the Monetary Policy Committee and Financial Stability Committee held this week.

    The meeting determines the lending rate at which commercial banks will borrow money over the next three months.

    Also known as the key repo rate, the lending rate is the fee at which the Central Bank lends to commercial banks.

    It is used by monetary authorities to control inflation.

    In February, the base lending rate had been increased to 7% from 6.5%. The rate was maintained in May 2023 prior to the new development.

    According to the Central Bank Governor, John Rwangombwa, the repo rate has been increased in consideration of several uncertainties and aim to maintain a downward trend of inflation.

    He further stated that the repo rate has been on rise over the past one and half years, from 4% to the current 7.5% but expressed optimism for decreased rates.

    “We expect to see this continued reduction in inflation and return to our band of 2 to 8 percent [in fact around 5 percent] in 2024. If nothing else happens or unexpectedly happens, from our projections, we don’t expect any further increase going forward,” disclosed Rwangombwa.

    Central Bank Governor, John Rwangombwa presenting outcomes of the quarterly Monetary Policy and Financial Stability Committee Meeting.

  • Rwanda’s inflation rises by 11.9 percent

    According to the figures released today, ‘Food and non-alcoholic beverages’ saw a 22.8 percent increase on an annual basis and a marginal 0.1 percent increase on a monthly basis.

    ‘Alcoholic beverages, tobacco, and narcotics’ rose by 14.3 percent on an annual basis and dropped by 2.3 percent on a monthly basis. Transport experienced a 5.8 percent annual increase and a 1.5 percent monthly increase.

    The data also indicate that “local products” had a 13 percent increase on an annual basis and a slight 0.4 percent decrease on a monthly basis, while the prices of “imported products” went up by 8.4 percent annually and by 1.4 percent on a monthly basis.

    The prices of “fresh products” surged by 27.4 percent on an annual basis but decreased by 1.4 percent on a monthly basis.

    Among other categories, the prices of “energy” showed a 3.8 percent annual increase and a 2.2 percent decrease on a monthly basis.

    The prices of the “general Index excluding fresh products and energy” rose by 8.5 percent on an annual basis and increased by 0.7 percent on a monthly basis.

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  • Rwanda generates US$362 million from mineral exports in second quarter of 2023, gold tops

    A standout performer throughout the quarter was undeniably gold, which took the lead as the top revenue generator.

    In April alone, Rwanda exported 1,506 kilograms of gold, bringing in an impressive US$ 97,553,111. The momentum continued into May, with 1,520 kilograms of gold worth US$ 99,039,329 being exported. However, the true highlight was June, when Rwanda exported 1,670 kilograms of gold valued at a staggering US$106,100,444. Combining these figures, the cumulative revenue from gold for the entire quarter reached an astonishing US$302,692,884.

    Cassiterite, a vital mineral in Rwanda’s mining industry, also made a substantial impact on the country’s mineral export earnings. In April, it generated 388,818 kilograms, amounting to US$ 6,210,054. Though May witnessed a slight decline in production, with 341,533 kilograms valued at US$ 5,202,418, June saw a surge in performance, as Rwanda exported 413,804 kilograms worth US$ 7,400,529. The cumulative revenue from Cassiterite for the entire quarter stood at an impressive US$18,813,001.

    Coltan, another valuable mineral, showed steady growth throughout the quarter. In April, Rwanda exported 133,828 kilograms, resulting in revenue worth US$6,296,903. The following month, May, witnessed a notable increase in both volume and value, with 198,787 kilograms worth US$ 9,587,723 exported. In June, Coltan exports reached their peak, with 254,400 kilograms worth US$ 11,930,212. The combined earnings from Coltan in the second quarter amounted to US$ 27,814,838.

    Wolfram, also known as tungsten, demonstrated a remarkable upward trajectory in export revenue. In April, Rwanda exported 120,920 kilograms, generating US$ 1,574,123. The subsequent month saw a considerable jump, with 246,920 kilograms worth US$ 3,335,391 exported. By June, Wolfram’s performance peaked, recording 267,595 kilograms worth US$ 3,579,145. Over the entire quarter, Wolfram contributed US$ 8,488,659 to Rwanda’s mineral export revenue.

    Besides these major minerals, “Other Minerals” also made a valuable contribution to Rwanda’s export revenue. In April, Rwanda exported 514,820 kilograms, generating US$ 1,233,420. May showed an increase in volume, with 1,357,729 kilograms worth US$ 1,327,094 exported. By June, the volume of “Other Minerals” reached 2,394,688 kilograms, resulting in revenue worth US$ 1,998,947. Over the entire quarter, “Other Minerals” contributed US$4,559,461 to Rwanda’s export earnings.

    Gold took the lead as the top revenue generator in the second quarter of 2023.

  • Sudanese gov’t rejects deployment of any foreign troops on its soil

    “The government of Sudan reaffirms its rejection of the deployment of foreign forces in Sudan and will consider them aggressors,” Sudan’s Foreign Ministry said in a statement.

    The ministry expressed astonishment over the statements by Ethiopian Prime Minister Abiy Ahmed Ali, who said there was a vacuum in the state leadership in Sudan.

    “The government of Sudan considers such statements as an infringement on Sudan’s sovereignty, which is unacceptable,” the Sudanese Foreign Ministry said.

    “Sudan has notified the IGAD that disrespect for member states’ opinions will make Sudan reconsider the feasibility of its membership in the organization,” it added.

    On Monday, a meeting of the IGAD quartet committee was held in Ethiopia’s capital Addis Ababa to discuss the implementation of the IGAD roadmap for peace in Sudan.

    The Sudanese army delegation boycotted the meeting in protest against Kenya’s chairmanship of the quartet committee, which also includes Ethiopia, Djibouti and South Sudan, while Sudan’s paramilitary Rapid Support Forces (RSF) welcomed the meeting.

    The Sudanese government has been calling for a change in the committee’s chairmanship since the IGAD summit in Djibouti in June, citing Kenyan President William Ruto’s lack of “impartiality” in the ongoing crisis, Sudan’s Foreign Ministry said in a statement on Monday.

    In a communique issued at the end of the one-day meeting, the IGAD quartet group urged the Sudanese warring parties to agree on an “unconditional and indefinite” cease-fire.

    It also decided to request the convening of the East Africa Standby Force (EASF) summit to consider the possible deployment of the EASF to protect civilians and ensure humanitarian access.

    At the 14th ordinary session of the IGAD Assembly of Heads of State and Government in Djibouti on June 12, an initiative was adopted, including a roadmap for resolving the Sudanese conflict.

    The roadmap outlined the establishment of a quartet committee chaired by Kenya to oversee the Sudanese issue, organize face-to-face meetings between the Sudanese warring factions, and initiate an inclusive process toward a political settlement within three weeks.

    Sudan has been witnessing deadly clashes between the army and the RSF across the country since April 15, which have so far left over 3,000 people killed and 6,000 others injured, according to the Sudanese Health Ministry.

    More than 2.8 million people in Sudan have been displaced by the violence, including 2.2 million internally displaced, according to UN estimates.

    Presidential protection guards from South Sudan's People Defence Force (SSPDF) stand in a formation at their training site. (Photo by Reuters)

  • Rwanda’s inflation increases by 13.7 percent

    In June 2023, Food and non-alcoholic beverages increased by 26.2 percent on annual basis and increased by 0.5 percent on monthly basis.

    ‘Alcoholic beverages, tobacco and narcotics’ increased by 22.7 percent on annual basis and increased by 1.4 percent on monthly basis. Restaurants and hotels increased by 10.7 percent on annual basis and decreased by 0.5 percent on monthly basis.

    The data from NISR also show the “local products” increased by 15.4 percent on annual change and increased by 0.3 percent on monthly basis, while prices of the “imported products” increased by 8.6 percent on annual basis and increased by 0.8 percent on monthly basis.

    The prices of the “fresh products” increased by 34.9 percent on annual change and was stable on monthly basis.

    Among others, prices of the “energy” increased by 4.9 percent on annual change and decreased by 0.3 percent on monthly basis.

    The prices of the “general Index excluding fresh products and energy” increased by 9 percent on annual change and increased by 0.6 percent on monthly basis.

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  • Rwanda’s economy grows by 9.02%

    Yusuf Murangwa, the Director General of NISR, emphasized the importance of translating this 9.03% growth into improved livelihoods for Rwandans.

    He stated, “Economic growth should translate into better lives of Rwandans. Their growth signifies their hard work and increased profits. When retail businesses thrive, it reflects the overall growth of Rwandans. The 17% growth in wholesale and retail trade is especially commendable.”

    Agricultural activities witnessed a 1% growth, contributing 0.2 percentage points to the overall GDP growth. Within the agricultural sector, the production of food crops experienced a decrease of 3%, while the production of export crops increased by 25%.

    Industrial activities expanded by 9% and contributed 1.7 percentage points to GDP growth.

    Construction activities increased by 1%, mining and quarrying by 15%, and manufacturing activities by 16%. The growth in the manufacturing sector was driven by a 22% increase in food processing, a 26% increase in the manufacturing of metal products, machinery, and equipment, a 37% increase in the manufacturing of chemicals, rubber, and plastic products, an 18% increase in the manufacturing of wood and paper printing, and a 7% increase in the manufacturing of non-metallic minerals.

    The service sector experienced a robust growth of 13%. Within this sector, wholesale and retail trade increased by 17%, transport activities by 19%, hotel and restaurant industry by 42%, financial services by 12%, telecommunication services by 43%, professional and scientific services declined by 6%, public administration services increased by 7%, and education services by 13%.

    However, health services recorded a negative growth of 3% following a high growth of 22% in the same quarter of 2022.

    Dr. Uzziel Ndagijimana, the Minister of Finance and Economic Planning, expressed optimism about the future, stating that the figures suggest a continued reduction in market prices in the coming days.

    Yusuf Murangwa, the Director General of NISR, emphasized the importance of translating the 9.02 % growth into improved livelihoods for Rwandans.Dr. Uzziel Ndagijimana, the Minister of Finance and Economic Planning, expressed optimism for decreased inflation.minecofin_2-2-b343d.jpg

  • National budget increases to Rwf5,030.1 billion

    The rise in spending will fuel ongoing economic recovery, support climate change mitigation as well as finance key investments in education, healthcare, ICT, agriculture and infrastructure through the National Strategy for Transformation.

    “The budget reflects Government’s economic resilience efforts in the face of global shocks. Government will continue to prioritize fiscal consolidation, ease inflation and invest in agriculture, scale up social protection coverage; improve the quality of education, create employment opportunities and support micro, small, medium and large enterprises affected by COVID-19 through the enhanced Economic Recovery Fund and Manufacture and Build to Recover Program”, Minister Ndagijimana told Parliamentarians.

    Key changes in the 2023/2024 Budget

    Estimated total resources for the fiscal year 2023/24 will amount to Rwf5,030.1 billion. The proposed budget is comprised of Rwf2,956.1 billion of domestic revenue which represents 63% of the total budget, external grants of Rwf652.1 billion representing 13% of the entire budget and external loans will amounting to Rwf1,225.1 billion or 24% of the total budget

    Total expenditure in the fiscal year 2023/24 is projected at Rwf5,030.1 billion. This figure is made up of recurrent expenditure of Rwf2,902.3 billion representing 57.7% and development expenditure of Rwf2,127.7 billion representing 42.3%.

    Key allocations in line with the National Strategy for Transformation

    Prioritization in resource allocation to various sectors has been guided by critical considerations that enhance NST1 delivery, economic recovery plan interventions, prioritization of ongoing projects, emphasis on transformation and sustainability as well as resilience to social economic shocks. In this regard, Government will allocate Rwf2.8 trillion (about 55.9% of the entire budget) to the Economic Transformation Pillar.

    These resources will scale-up agriculture productivity, create jobs, support private sector development and strengthen climate change adaptation and mitigation measures. It will also increase access to electricity and clean water, support urbanization and settlement, improve the national road network, scale up adoption of ICT, and implement agriculture de-risking and financing facility.

    Social Transformation

    Under the social transformation pillar, Government will allocate about Rwf1.5 trillion (approximately 30.4% of the entire budget). The budget share will be spent on improving quality and access to health and education, eradicate extreme poverty through scaling up of social protection programs, improve nutrition through early detection, provision of fortified foods and scaling of early childhood development facilities. The funds will also promote family and gender, sports and culture as well as disaster management through enhancing disaster preparedness, response and recovery.

    Transformational Governance

    Under the transformational governance pillar, Government plans to spend Rwf690.1 billion (about 13.7 % of the total budget). This allocation will focus on promotion of quality service delivery across public and private sectors, good governance and transformational leadership, strengthening public finance management, strengthening justice, law and order, maintaining peace and security and strengthening crime prevention as well as supporting international cooperation through strengthening economic diplomacy.

    With regard to internal or external factors that may affect Rwanda’s operating economic environment, such as drought or decrease in global commodity prices that may affect the country’s export prices, Government plans to closely monitor such developments and take necessary measures to ensure full implementation of Rwanda’s economic program.

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  • Rwanda registered 45.7 percent increase in FDIs in 2021

    Amidst favorable investment conditions and the strategic use of both debt and equity instruments, Rwanda witnessed an 8.5 percent rise in FDI stocks, reaching an impressive $2.9 billion. This remarkable growth in FDI encompasses various foreign investments, including FDIs, portfolio investments, and other forms of capital.

    Highlighting the source countries, Mauritius emerged as the top contributor, accounting for a significant 30.5 percent of FDI, primarily focused on the financial, ICT, manufacturing, and electricity sectors. Following closely is India, with a notable 17.9 percent investment in construction, and China with 17.6 percent invested in the tourism and manufacturing sectors.

    Major FDI stocks also originated from countries such as Kenya, South Africa, and the USA, showcasing Rwanda’s attractiveness to a wide range of global investors.

    FDIs remain the driving force behind Rwanda’s foreign private capital investments, demonstrating a remarkable recovery from $386.4 million in 2020 to a substantial $543.8 million in 2021, marking a 40.7 percent increase. The report states, “The rise in FPC inflows can be attributed to the recovery of economic activities from the poor performance induced by the COVID-19 pandemic in 2020.” Remarkably, Rwanda’s total FPC stock stood at a commendable $4.1 billion by the end of 2021.

    While acknowledging the challenges faced globally, including the Russia-Ukraine conflict and the enduring impact of the COVID-19 pandemic, the report sheds light on Rwanda’s resilience. Despite these obstacles, the country experienced a significant boost in return on investment (ROI), soaring to 11.8 percent in 2021, surpassing the global average of 9.7 percent. Rwanda’s ability to thrive in the face of adversity highlights its strong economic foundation and promising investment climate.

    In contrast to global trends, Africa’s FDI flows amounted to $83 billion in 2021, doubling the figures from 2020 and accounting for an impressive 5.2 percent of global FDI. Rwanda’s outstanding performance in this landscape speaks volumes about the country’s potential as a prime investment destination.

    In his introductory statement; Central Bank Governor, John Rwangombwa, emphasized the significance of the FPC census report for the Government of Rwanda, stating that it plays a vital role in shaping policy measures that attract FDI and enhance the business environment.

    Undeterred by economic challenges, Rwanda remains steadfast in its commitment to promote diverse FDI opportunities.

    This commitment is exemplified by programs like the Manufacture and Build to Recover initiative, which has already generated $1.2 billion worth of investments. With the launch of its second phase in March 2023, Rwanda aims to attract a staggering $2.5 billion in investments across priority sectors, including manufacturing, infrastructure, energy, agriculture, agro-processing, and ICT.

    Rwanda’s remarkable FDI growth story serves as an inspiration to the world, defying global challenges and positioning itself as an enticing investment hub. With a thriving economy and promising returns, Rwanda stands tall as an exemplar of resilience and opportunity in the international business landscape.

    The bird's-eye view of Kigali Special Economic Zone. Rwanda registered 45.7 percent increase in FDIs in 2021.