The global economy has actually not yet recovered from
recession which means economic activity and international trade is low.
Investors are reluctant to invest in new projects and countries can’t earn much
from their exports as demand on the intentional market is weak.
The IMF continues to revise its World Economic growth
forecasts downwards and currently stands at 3.5% from 3.9% in 2011. Though
growth for the first quarter of the year surprised with 3.6%, serious economic
tensions continue to bog down global commerce with and European banking woes
hurting investor confidence even more.

The USA’s economy that grew by 2.0% in first quarter only
managed slightly more than 1.5% in the second quarter; Japan grew by 1.6% from
4.7% in the first quarter while the Euro-zone only managed growth of 0.5% in
the second quarter. The UK is in recess with the country only growing at 0.8%.
Europe, Asia and of course the US are the leading buyers of
Rwanda’s traditional exports and their woes would naturally slow us down but
that has not been the case.
For starters, the economy grew by 7.7% precisely what was
projected for the fiscal year-that can only mean that whatever system we are
using, it’s working.
According to Claver Gatete, the Central Bank Governor, BNR
recorded an 11.1% increase in the composite index for non-agriculture economic
activity (CIEA)
The CIEA simply means all economic activities in the country
that don’t relate to agriculture.
Gatete says the country’s industry and service sectors
registered growth of their turnovers with 21.7% and 24.4% respectively.
Industry and service sector are the leading source of jobs and therefore key to
the health of an economy.
As expected, the value of most of Rwanda’s exports reduced
this generally to weak global demand. The value of tea exports fell by 7.7% as
well as volumes which reduced by 10.7%. Minerals also took in the blow
registering a 4.5% reduction in value and 0.5% in volume.
However, Rwanda’s fortunes were saved by growth in both
value and volume of coffee exports at 48% and 51.8% respectively leading to the
overall exports’ value growth of 25.1% contributed by the growth in volume of
61.9%. Other exports grew by 64.6% in value and 63.4 % in volume
salvaging Rwanda’s fortunes in the process.
Inflation levels have further gone down to in the
neighborhood of 5%, the banking industry, which is the pulse of the country’s
financial sector has too completed the first half of 2012 on a high with their
balance sheet increasing by 21.9%, Capital Adequacy Ratio (CAR) increased by
25.5% way above BNR’s target of 15%.
Micro-Finances too did well realizing an asset growth of
22.2% and total deposits and loans amounted to RWF 30.2 billion and RWF10
billion respectively.
Concerning inflation, Rwanda has delighted in the news that
inflation levels have generally reduced in EA partner states with Kenya hitting
single digits, Uganda and Tanzania also showing progress. Rwanda’s own
inflation levels were measured at 5.9%.
Gatete attributes the regional success in containing
inflation levels to better agriculture production and tight monetary and fiscal
policies that have seen inflation steadily drop since November 2011 after
With falling oil prices falling, the current inflation is
projected to fall further.


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