Rwanda's growth rate slowed in 2016 and the first half of 2017 as a result of drought and the completion of large projects like the construction of Kigali Convention Centre but it is now set for a rebound.
The Minister for Finance and Economic Planning, Amb. Claver Gatete, made the revelation yesterday while briefing the Lower House about the state of the country's economy and execution of the National Budget.
Gatete said the economy began bouncing back in the second quarter of the year when it grew 4 per cent, while it had grown a paltry 1.7 per cent in the first quarter of 2017 and expressed optimism that growth will continue in the coming months.
"Second quarter (Q2) growth began turning around, and growth is expected to be stronger in the second half of the year," he told MPs in a presentation about the country's state of the economy.
For the 2017 year as a whole, the minister said that growth is expected to be around 5.2 per cent, which is lower than the previously projected 6.2 per cent for the year.
It is expected that growth will mainly be driven by agriculture, industries, and services.
In agriculture, he said, early indication for the completed Season B is that it has been good as shown by the decline of food prices while there is also signs of better harvest in tea and coffee as well as horticulture as exports of all of these goods have increased.
For industries, Gatete said construction is already recovering as a result of works on the proposed Bugesera International Airport while manufacturing is also growing as a result of Made-in-Rwanda campaign.
In services, he said, the immediate effect from phasing out use of imported second hand clothes is expected to ease while the growing events and conferences industry will impact growth of hotels and restaurants.
"The Government will continue to put in more efforts to achieve the economic growth of at least 7 per cent over the medium term as early signs show dynamism," the minister said.
He added that with the rebounding economy observed in the second and third quarter of the year and expected in the remaining months of the year and beyond, the Government remains hopeful that the Budget will be successfully executed.
The country is running on a Rwf2.09-trillion Budget for the current Financial Year 2017/18, which was designed under the theme of "Sustainable growth through infrastructure development and promotion of Made-in-Rwanda."
The Government has sought to invest heavily in infrastructure projects such as roads and airports, rolling out electricity in more areas, increasing clean water access in urban areas, and creating industrial parks upcountry, among other priorities.
"The Government is confident that it will fully implement the Budget and more efforts will also be put in monitoring project implementation," Gatete said.
The minister said that Budget Implementation for the last three months, from July-September 2017, was in line with economic performance and is on track.
But legislators pushed for more efforts in monitoring government projects and fast-tracking activities that are already funded in the national budget in order to maximise their intended results.
"Let's try to ensure that what we agree to do is done on time because it leads to losses when projects aren't implemented on time," said MP Juvenal Nkusi.
MP Jean Thierry Karemera advised government to increase efforts in monitoring the implementation of agriculture related projects given the importance of the sector for the country's economy.
"Our economy is still predominantly based on agriculture today but the sector has a lot of issues such as projects that are not effectively monitored and implemented," he said, explaining that if the trend is not reversed it may end up negatively affecting the economy.
The Chairperson of the parliamentary Standing Committee on Budget and National Patrimony, Constance Mukayuhi Rwaka, commended the Finance minister for briefing the House on the state of the economy and implementation of national budget and rooted for more sessions like that one every quarter in a fiscal year.
"If we can continue to get updates on time, it will help us in carrying out our oversight work," she said.
Under the country's law on state finances and property, which establishes principles and modalities for sound management of state finances and property, responsibilities for the minister of finance include informing the Lower House every quarter and whenever necessary on macroeconomic and budgetary developments.