Rwanda’s economic growth to drop slightly in FY 2015-16

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Rwanda’s Agricultural sector expected to grow

 

Rwanda’s economy is expected to grow by 6.5% in 2015 and 2016 respectively compared to 7 percent registered in 2014, the Minister of Finance Ambassador Claver Gatete has said.

The fiscal year FY 2015/16 is the 3rd year of the Second Economic Development and Poverty Reduction Strategy (EDPRS2) implementation and is expected to consolidate on economic performance of 2014.

This fiscal year the total grants are projected at Rwf 358.4 billion, 5.7% of GDP against Rwf 417.1Billion 7.3% of GDP in 2014/15, a reduction of Rwf 58.8 billion.

Rwf938.6 billion is expected to come from tax revenue whilst Rwf 99.5 billion will accrue from non-tax revenue.
Total domestic revenue collections are estimated to be Rwf 1,038.1 billion representing 17.5 % of GDP.

The total budget for fiscal year 2015/16 is projected at Rwf 1,768.3 billion representing 28.8 percent of GDP
Last year, domestic revenue was lower than expected, at Rwf 9.8 billion, a shortfall in tax revenue collections from Rwf416.1 billion projected for the period of July-December 2014 and budget execution was complicated by delayed donor disbursements due to shifting multilateral financing from grants to loans.

While presenting the draft budget paper, Gatete said reforms will entail addressing energy supply constraints and prioritization of infrastructure towards productive uses.

“Government will ensure fast implementation of private and public projects in industrial sector & promote thriving services” he said

The 2015-16 projections indicate that Rwanda’s imports in value terms are projected to increase by 7% in 2015 and decline by 2% in 2016 due to implementation of delayed projects in 2015.

While exports in 2015 are projected to grow in value terms by 6% percent rising from US$ 723.1 million in 2014 to US$ 764.4 million in 2015.

Inflation is projected to remain low and not exceed 3.5 percent by end 2015. In the medium term it is expected to be contained at 5 percent and agriculture is expected to grow by 5.2%, industry by 8.4, and services by 7.2
Growth in 2014/15 was driven by favorable agriculture output, lower oil prices and low inflation that favored trade & investment.

Apparently Rwanda’s performance was affected by donor grants amounted to 9.2% of GDP in 2013/14, declining to 7.3% of GDP in 2014/15 this time around it is projected to decline to 5.7% of GDP in 2015/2016.