Rwanda’s economy grew by 8.9% in 2024

Rwanda has seen a remarkable economic growth of 8.9 per cent in 2024, attributed to the impressive performance in both services and agriculture sectors. In a recent interview with CNBC Africa, Thierry Kalisa, Chief Economist at the National Bank of Rwanda, shed light on the key drivers of this growth and the strategies in place to sustain it. Kalisa highlighted the significant contribution of the services sector, with around half of the GDP coming from trade services, ICT services, tourism, and financial services. Additionally, the industry sector demonstrated robust performance due to construction activities and manufacturing. Notably, the agriculture sector, which faced challenges in previous years, excelled in 2024, further boosting the economy. In terms of inflation management, Kalisa emphasized the Central Bank's focus on striking a balance between controlling inflation and supporting economic growth, particularly amidst ongoing geopolitical tensions. The Central Bank took measures such as increasing rates and tightening monetary policy to address high inflation in 2022 and 2023. Efforts were also directed towards supporting agriculture production to stabilize food prices. Kalisa stressed that maintaining stable inflation is crucial for sustained long-term economic growth in alignment with the National Strategy for Transformation and Vision 2050. Despite potential risks from geopolitical tensions, the Central Bank remains optimistic, with inflation projected to stay within the 2 to 8 per cent range. Looking ahead, Kalisa highlighted Rwanda's strong foreign exchange reserves, which provide buffers against external shocks. The reserves, equivalent to 5.4 months of import cover, exceed the benchmark of 4 months, indicating resilience against economic uncertainties. Addressing exchange rate volatility, Kalisa emphasized the importance of balancing trade deficits through increasing exports. While trade deficits grew by 5% in 2024, the pace was slower due to growth in exports. Efforts under the National Strategy for Transformation aim to boost exports of both goods and services, ultimately stabilizing the trade deficit and easing pressure on the exchange rate. Kalisa expressed confidence that Rwanda is on the right path towards sustainable economic growth and stability, despite external challenges.