Rwanda’s economy should grow by 7 percent this year, accelerating from around 5.5 percent growth in 2009, as mineral exports and the construction sector pick up, the finance and economic planning minister said.
“The projection we have for 2010 is 7 percent. We see better performance on the world economy,” John Rwangombwa, who replaced James Musoni as finance minister in December, told Reuters.
“So the challenges we had of reduced exports, especially from minerals, are expected to revert. We expect to see better performance in the construction area which also had a decline last year.”
“Our preliminary result, for the overall economic performance in 2009 is 5.5 percent. This is attributed to the performance in agriculture,” he said.
That is higher than a central bank projection last month that the central African economy grew by between 3.5 and 5.0 % in 2009, slowing from 11.2 % growth in 2008, and an average of 7-8 % over the last decade.
The Rwandan economy is being rebuilt after the 1994 genocide of 800 000 ethnic Tutsis and politically moderate Hutus.
The government has focused on restructuring the tea and coffee industries and the financial system, while investing in energy, transport and telecommunications infrastructure.
The nascent mining sector declined 40 % last year but Rwangombwa said the agricultural sector grew 10.4 % thanks to good climate conditions and a government programme to increase productivity.
“This was mainly due to government policy that aims to increase agricultural production so that fertilisers are abundantly imported and distributed to farmers on subsidized prices,” he said.
The government’s programme to boost the use of fertilisers to make land more fertile for production was applied to 20 % of the land and this would double to 40 % this year.
“The results for this are expected to be yielded in March and June if the rains aren’t disruptive,” Rwangombwa said.
The global financial crisis hit Rwanda’s external trade last year. Exports, including minerals, fell 29 % by value due mainly to low global prices, while import volumes continued to increase.
According to central bank statistics, major mineral exports in 2009 totalled $54.58 million representing 28 % of total export earnings, while coffee and tea raked in $85.53 million, or 44 % of exports.
Minerals had surpassed tea and coffee as the main foreign exchange earner until the industry was affected by the global financial crisis in 2008.
Last year, metals tin, coltan and wolfram were the third, fourth and fifth top earners of foreign revenue after coffee and tea respectively.