Rwanda’s Economy is projected to grow by 7.2 percent in 2014, surpassing last year’s performance. This was revealed during the release of the fifth edition of Rwanda Economic Update report by World Bank on Thursday.

The main contributor of the projected growth will be capital and production supported by strong government reforms. In 2013 the economy grew by 5.9 percent and 5.7 percent in the first and second quarters respectively, before registering a 6 percent growth in the third quarter.

The slow growth compares poorly with 7.7 per cent growth rate of 2012. The slow growth was attributed to aid shocks experienced in 2013. According to the report, the main driver of growth in 2013 was exports while imports slightly reduced.

The country also experienced a lower fiscal deficit than had been projected mainly due to strong tax collection and the Euro bond. According to Kampeta Sayinzoga, the Permanent Secretary and Secretary to Treasury at the Ministry of Finance the slow economic growth during the third quarter of 2013 provide a strong case for the second Economic Development and Poverty Reduction Strategy (EDPRS2) to be fast-tracked.

“We are working hard to boost our reserves and build the capacity of the exports sector to raise the country’s foreign reserves,” Sayinzoga said.

The report recognised that Rwanda has shown a track record of good macro-economic management during the difficult periods such as economic crisis and aid suspensions. This was manifested by Sanghi Apurva, a World Bank economist who noted that “There is a more impressive performance of macroeconomic policy in Africa, especially Rwanda. We are confident that high income growth, strong fiscal buffers and increased capital formation will be a bright spot for Rwanda”. He urged the country to position itself to tap into the opportunities emerging from the growing Chinese and European economies through export promotion and diversification.

(Rwanda Aims for 7% Economic Growth Rate in 2014) – 30 Jan 2014