5 January 2013

Rwanda: Investments, Exports Top Economic Growth

Foreign investments and exports are among the top performers in 2012 showing a positive outlook for the economy despite global shocks that characterised the whole year, pushing the country's trade deficit up further.

According to Francois Kanimba, the Minister of Trade and Industry, there was an increase in investments and exports which posted a positive outlook making the economy resilient last year.

"There is an increase in trade receipts with our neighbors mainly Democratic Republic of Congo," he said during the ministry's accountability day on Thursday.

Rwanda's total exports receipts including tourism were US$678 million, an increase of 22 per cent from 2011 with total merchandise trade growing up to US$2.47 billion between January and October 2012.

Merchandise exports from both formal and informal trade accounted for US$ 467 million and imports US$ 1,801 billion up 25.85per centand 14 per cent respectively over the same period in 2011.

On the other hand, total investments accounted for US$ 1,100 million with total foreign investments totaling US$556 million, joint ventures fetched US$339 million, foreign investment only collected US$217 million while local investments collected US$544 million.

"We have also seen 31 Local Investment Groups(LIGs) with a total planned investment of Rwf70billion of which about 50 per cent are ongoing investments," Kanimba said.

Company Registration, according to Minister Kanimba, reached a record level in 2012 with 9,031 companies registered as of December, an increase of 42per cent from 2011. The turnover of industries increased by 33.9 per cent compared to the same period in 2011, reaching Rwf 195 billion from January to November last year.

The increase in exports was driven by primary products, value-added products which have been growing since 2011 in agro processing, light manufacturing mainly construction materials and re- exportation to the region.

"Our products can now compete favourably in both regional and international markets due to our intensified efforts to certify our products with standards required in these markets," Mark Cyubahiro, Director General Rwanda Bureau of Standards, told Business Times.

However, despite an increase in exports, the country registered an increase in import receipts by 14 per cent, up from US$1.5 billion in 2011 to US$1.8 billion in 2012 pushing the country's trade deficit to around US$ 1.3 billion.

But experts say that an increase in import receipts was favoured by high importation of machinery, mainly in agricultural and telecoms which was driven by new investments, thus triggering an increase in performance in the services and industry sectors.

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