By:Igihe.com Reporter
A Monetary Policy and Financial Stability Statement released recently by the central bank indicates that there has been an increase in Rwanda’s exports and imports both in volume and value in this year’s first half.
According the 34-pages statement, exports and imports are key indicators of economic activities that have contributed to the country’s economic growth and believed to keep it stable despite the prevailing uncertainties in the regional economy.
The region has faced Fuel and food inflation and prolonged drought that have drastically reduced production.
“Export volume and value recorded a significant increase of 58.2% and 48.1% respectively while imports volume and value increased by respectively by 13.2% and 14.6%,” the statement reads in parts.
However, despite the strong increase in exports, the trade deficit deteriorated to US $ 587.5 million against US $ 543.7 million recorded at end of June 2010. However,the coverage of imports by exports has increased to 20.9% end June 2011 from 16.2% end June 2010.
It is believed that when informal cross border trade is included, this coverage rate of imports by exports rises to 25%.
The main Rwanda export commodities remain the traditional ones such as coffee, tea and minerals representing 72% of total export values during the first half of 2011.
The monetary policy and financial stability statement released and distributed by central bank (National Bank of Rwanda),indicates that Tea exports recorded good performance with an increase of 4.1% in volume from 12,811 tons in January-June 2010 to 13,331 tons in January-June 2011 and an increase of 10.1% of value.
The mining sector has also contributed to growth both in economy and increase in exports as it continues to grow till this first half of 2011 recording an increase of 54% to 163.2 % in value reaching USD 72.5 million from USD 27 million respectively due to a significant increase in global prices by more than 70% in average.
Non-traditional export products have also shown a good performance, mainly due to the increase in export of live animals, vegetables, mineral water, beer, cosmetics products and textile products.
It is indicated that major part of these non-traditional exports went to DR Congo and Burundi except handcrafts that are mainly exported to developed countries like USA and UK.
Rwanda’s informal trade balance is said to be overall in surplus dominated by DR Congo on export side and Uganda on import side.
Rwanda’s import products are dominated by agriculture and animal products while imports are dominated by products such as maize flour, sugar, onion, banana for cooking, ground nuts, soap products, cleaning products, cement to mention but a few.
Rwanda’s total trade value with its neighboring countries recorded an increase from US $ 278 million to US $ 567.5 million in 2010, driven mainly by imports.
On the other hand this year’s imports seem to have slowed down due to a decline in imports of cereals and vegetables resulting from the drought that affected the region, and the increase in the domestic production.
It has been projected that Rwanda’s economy is likely to rise beyond the initial projection despite the expected adverse impact of rising fuel and food prices.
According to the IMF estimates of June 2011, the global economy continues its recovery process led by emerging and developing countries while developed countries, economic activity remain sluggish.
This year the global economy is expected to grow by 4.3% down from 5.1% in 2010 and in developed countries, economic growth is projected at 2.2% while in the emerging and developing economies it is expected to reach 6.6%, as compared to 3.0% and 7.4% respectively in 2010.
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