Rwanda’s GDP grew 9.2% in Q1 2023

Rwanda's economy witnessed a significant 9.2 per cent growth in the first quarter of 2023, driven primarily by robust performances in the services and industry sectors. According to the Minister of Finance and Economic Planning, Uzziel Ndagijimana, the services sector experienced a remarkable 13 per cent growth, propelled by activities such as wholesale and retail trade, hospitality, financial services, telecommunications, and transport. Particularly noteworthy was the 28 per cent surge in air transport, indicating a rejuvenation in the aviation industry. This growth in the services sector can be attributed to the government's strategic emphasis on its development in recent years. On the other hand, the industry sector posted a solid 9 per cent growth, led by manufacturing and mining activities. However, agriculture, which employs over 70 per cent of the population, lagged behind with just a 1 per cent uptick due to adverse climate conditions like droughts and floods. These climatic challenges have also contributed to excessive food inflation, although recent statistics show a declining trend over the past six months. Food inflation, which stood at 54 per cent in December, has dropped to around 25 per cent, while average inflation decreased from 21 per cent to 14 per cent during the same period. Minister Ndagijimana anticipates average inflation to further decline to approximately 7.8 per cent by year-end. Despite the positive growth trajectory in several sectors, agriculture remains a concern and efforts are underway to combat climate change effects through investments in irrigation schemes and soil protection initiatives. The government is committed to doubling irrigation coverage and implementing comprehensive climate action plans to safeguard the sector's future amidst environmental challenges. Moreover, proposed reforms in taxation, particularly the waiver of Value Added Tax (VAT) on essential goods like aircraft and processed foods, aim to stimulate growth and mitigate inflation impact. These reforms are part of a broader strategy to enhance revenue collection without unduly burdening taxpayers, balancing fiscal objectives with economic growth prospects. By addressing sector-specific disparities and implementing proactive measures to counter climate risks, Rwanda seeks to sustain its economic momentum and ensure inclusive development across industries.