Rwanda exports rise as trade deficit narrows
Rwanda’s exports accelerated in the first half of this year, driven by Government’s efforts to support the Made-in-Rwanda agenda as well as good performance of non-traditional exports, helping to bridge the country’s trade deficit.
National Bank of Rwanda statistics, which were released yesterday, show that Rwanda generated $463.16 million from exports in the first six months of 2018, up from $375.91 million in the same period last year.
The improvement was also attributed to a positive international economic outlook characterised by better prices.
Traditional exports such as coffee, tea, minerals and pyrethrum grew by 28.7 raking in $150.29 million compared to $116.74 million in 2017.
Of the traditional exports, minerals registered the largest growth, driven by good prices on the international market.
Coffee prices also improved from $2.66 per kilogramme to $2.76 per kilogramme as exporters are now exporting fully washed coffee.
However, tea prices on the international market slumped by 2.3 per cent. Local exporters increased supply to offset possible losses. Tea exports generated $51.09 million.
Non-traditional exports such as milling products, minerals (Coltan, cassiterite and wolfram), iron and steel as well as flowers grew by 19.1 per cent.
The improvement was largely driven by milling industry which raked in $33.8 million as production by local stakeholders as well as increased demand from DRC.
Exports of flowers, mainly to the Netherlands, also grew, owing to new investments that boosted production.
Government incentives to support the Made-in-Rwanda initiative drove growth of textiles by 158.8 per cent.
Imports also rose by 7 per cent in the first half of the year to $1,127.4 million as volumes grew by 18.2 per cent.
The Governor of the Central Bank, John Rwangombwa, said that diversification and value addition of local exports has seen a shift from the dominance of traditional exports from 62.1 per cent in 2013 to 32.4 per cent in 2018.
The largest volume of imports was intermediary goods, at 44.8 per cent, followed by consumer goods, and energy and lubricants and lubricants.
Intermediary goods were driven by demand in food industries, chemical and other inputs. Imports of cement rose by 11.3 per cent in volume as local producer CIMERWA had cut supply between March and April for maintenance.
The growth of imports is a positive development as Rwanda Revenue Authority is set to register a growth in import duty receipts which had slumped for the last two years.
The developments saw trade deficit narrow by 2 per cent in the first half compared to the corresponding period of 2017 to $664.21 million.
The tourism sector raked in an estimated $87.03 million in the first quarter of 2018 and is expected to grow further this year.
Central Bank projections show that inflation will be contained below five per cent throughout the year following favourable weather conditions.