Recent Developments & Prospects

Macroeconomic Policy

Fiscal Policy

Monetary Policy

Economic Cooperation, Regional Integration & Trade

Debt Policy

Economic & Political Governance

Private Sector

Financial Sector

Public Sector Management, Institutions & Reform

Natural Resource Management & Environment

Political Context

Social Context & Human Development

Building Human Resources

Poverty Reduction, Social Protection & Labour

Gender Equality

Thematic analysis: Structural transformation and natural resources

Authors: Edward Batte Sennoga, Amata Sangho Diabate

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  • Real GDP growth increased from 4.7% in 2013 to 7.0% in 2014, exceeding the programmed 6.0% and is projected to rise to 7.5% in both 2015 and 2016.
  • Twenty years after the Rwandan Genocide, the country has become a development success story and unity and reconciliation have been consolidated, strengthening good governance in the medium term.
  • Efforts to promote spatial inclusion are bearing fruit, with the share of rural households living in integrated and economically viable planned settlements increasing from 37.5% in 2012 to 53.0% in 2013/14.

Real GDP grew by 7.0% in 2014, higher than the initially projected 6.0% and the 4.7% recorded in 2013. Growth in industry slowed as a result of a downturn in mining, manufacturing and construction. Public and private investments and a recovery in agriculture and services are expected to continue driving growth in the short and medium term. A public investment programme in transport and energy infrastructure has been prioritised to ease transport and energy bottlenecks and bolster economic growth.

Headline inflation is projected to converge around the central bank’s medium-term 5% target in 2015 and 2016. Lower food and fuel prices are expected to continue contributing to the subdued inflationary pressures. The demand for capital, intermediate goods and fuel products to support the public investment programme is expected to remain strong in the short to medium term. Current account deficits are projected to persist in the near term as export earnings accounted for only 25% of imports in both 2013 and 2014.

Rwanda is predominantly rural, with 83.0% of the 10.5 million Rwandans living in rural areas. Nationally, 26.9% of household output is sold, but over 70.0% of the population is still engaged in subsistence farming. The Economic Development and Poverty Reduction Strategy 2 (EDPRS 2) 2013-18 calls for expanding targeted economic zones and transforming Rwanda’s logistics system to strategically grow and promote exports. Other measures include the Kivu-Belt Tourism Master Plan. Progress has been made promoting spatial inclusion, with the share of rural households living in integrated and economically viable planned settlements increasing from 37.5% in 2012 to 53.0% in 2013/14.

Table 1: Macroeconomic indicators

Real GDP growth4.777.57.5
Real GDP per capita growth24.34.84.9
CPI inflation4.223.85
Budget balance % GDP-5.2-4.3-5.2-3.6
Current account balance % GDP-7.1-11.8-11.1-8.9

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.