Rwanda economy shows signs of upswing

Rwanda's economy is showing strong signs of recovery in 2017, outpacing the growth of the previous year. Despite a commodities slump that affected Sub Saharan Africa in 2016, Rwanda managed to grow by an impressive 5.9 per cent. Ted Kaberuka, an Economist, shared his insights on the current state of the economy, highlighting the positive trends seen in productivity, agriculture, and export numbers. Comparing 2017 to the previous year, Kaberuka noted significant improvements across various sectors. Productivity levels in agriculture and commodities are on the rise, leading to an expected increase in the prices of primary goods at a slower pace than before. Export numbers are projected to soar higher this year, fueled by the improved performance of the agriculture sector. Additionally, the depreciation of the currency is anticipated to be much lower compared to the previous year, indicating a healthier economy overall. Kaberuka emphasized the crucial role of agriculture in managing inflation rates. He explained that the production levels of agricultural commodities play a significant role in influencing inflation in the country. A boost in agriculture productivity can lead to lower inflation rates, as agricultural products contribute significantly to the overall inflation. While there are other factors at play in driving inflation, such as fuel prices, Kaberuka stressed the importance of focusing on improving agriculture productivity to effectively manage inflation. Addressing concerns about the impact of fuel prices on inflation, Kaberuka pointed out that the contribution of fuel prices to overall inflation is relatively small in Rwanda compared to other commodities, particularly those from the agriculture sector. Despite fuel prices hovering below $50 a barrel on average last year, the effect on inflation remains minimal due to the limited consumption of fuel in Rwanda's economy. Kaberuka highlighted the difference in consumption patterns between Rwanda and larger economies, where fuel is a major driver of inflation. Overall, Kaberuka expressed optimism about Rwanda's economic recovery in 2017, citing positive indicators in productivity, agriculture, export numbers, and inflation rates. The country's focus on enhancing agriculture productivity is seen as a key factor in sustaining the current economic growth trajectory, with potential for further improvements in the coming months.