Rwanda records strong economic growth in 2021

Wpid Money Growth

Rwanda has recorded strong economic growth in 2021 compared to previous year, the World Bank said in the 18th Rwanda economic update report released on Wednesday, in the Rwandan capital city Kigali.

Rwanda GDP increased in the first nine months of the year by 11.1 percent, reflecting a broad-based recovery from the 2020 recession, said the report.

Industrial production expanded by 16.5 percent. Favorable weather led to a 6.8 percent rise in agricultural output, and the easing of mobility restrictions contributed to a 11.1 percent rise in services, with hospitality-related services starting to recover in the second quarter, it added.

While GDP is close to the pre-pandemic level, the employment to population ratio (aged 16 and above) is 8 percent below and the unemployment rate more than 13 percentage points above levels at the beginning of 2020, said the report.

According to the report, one reason for lagging employment recovery is that more rapid growth in part reflects the shift of workers to higher-productivity jobs, including manufacturing and construction, rather than across-the-board increases in firm output.

Employment conditions have deteriorated strongly for women, with the female unemployment rate now 13.6 percentage points higher and male unemployment rate 7.7 percentage points higher than in the first quarter 2020, it said.

The report said that the traditional exports, including coffee and tea, increased by about 35 percent in the first nine months of 2021 and tourism also improved compared to the same period a year ago.

Imports recovered with more rapid growth in domestic demand, but at a slower pace than exports did, said the report, it added.

The World Bank predicted that the Rwanda GDP is expected to moderate over the next two years.

Services growth is expected to accelerate with a recovery in international tourism, while industrial activity should firm up with government support through the “Manufacture and Build to Recover Program,” said the report.

Inflation is anticipated to rise with increases in global demand, commodity prices and domestic economic activity, but remain within the National Bank of Rwanda target range.

The report recommended that regional integration offers significant benefits for Rwanda, including greater potential for scale economies, opportunities for learning to export and produce higher-quality goods, and cooperation to improve trade facilitation.

Rwanda’s economy growth shrank to 2.3 percent for the financial year 2019-2020 from 8.8 percent recorded the year before, as the COVID-19 outbreak dealt a huge blow to the country’s economic activities.

Last year, Rwanda predicted its economy to grow at 5.1 percent in 2021. Enditem

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