Rwandan economic growth to shrink

June 3, 2009

, NAIROBI, June 3 – The International Monetary Fund on Tuesday said Rwanda\’s economic growth, which has been one of the fastest in Africa, will shrink by half this year due the global financial crisis.

"The global economic and financial crisis is now beginning to impact Rwanda," said the IMF in a statement after an 11-day mission to the central African country.

The country\’s gross domestic product (GDP) is expected to grow by about 5.3 percent in 2009 and 2010, compared with robust 11.2 percent growth in 2008, the IMF said.

Rwanda, a tiny landlocked country rocked by one of the world\’s worst genocides in recent decades, has been hailed as a model of post-conflict recovery.

An estimated 800,000 Tutsis and moderate Hutus were massacred over 100 days of genocide in 1994.

The IMF team said the global economic meltdown "will likely result in falling exports, smaller foreign direct investment inflows, and lower tax revenues" for the country of 10 million people.

Rwanda\’s primary foreign exchange earners are coffee and tea.

But growth in agriculture in general is expected to partly help offset the slowdown in other sectors such as construction and mining.

According to the World Bank, agriculture accounts for slightly under 40 percent of GDP and the sector is the single largest employer, providing jobs to more than 80 percent of the population.

Inflation, which stood at 22 percent by end of last year, is projected to slow to a single digit by year end due to lower prices on imports and domestic food and an easing of domestic demand pressures.

The inflation rate is expected to decline to single digits in the second half of 2009, the IMF said.


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