Nation Records a 130 Percent Growth in Exports

Berna Namata

16 May 2011

Nairobi — Rwanda’s export earnings increased by 130 per cent in the first quarter of this year compared with the same period last year as commodity prices recovered and efforts to diversify exports began to bear fruit.

Since last year, prices of traditional exports such as coffee, tea and minerals — which contribute more than 70 per cent of total export earnings — have been on an upward trend.

Tea prices hit a record high of $2.9 per kg while coffee prices were from $6.7- $9.1 per kg on average.

Statistics from the Rwanda Development Board indicate that in the first quarter of this year, total exports fetched $691.4 million compared with $30.4 million earned during the same period last year.

Total export earnings are projected to hit $376 million this year from $298.3 million in 2010.

“The increase is attributed to diversified export products in value and quantity as well as increased promotional activities such as support to companies to attend international trade fairs and promoting potential buyers,” said John Gara, chief executive officer of RDB.

Mr Gara said that the improved performance of exports would help reduce the trade deficit, currently estimated at 14.2 per cent of GDP.

In the first quarter of this year, imports increased by 24 per cent compared with the same period last year, from $259.7 million to $328.8 million.

In 2010, while exports grew by 27 per cent, the import bill increased by 14.7 per cent.

However, Rwanda is a net importer from the EAC with imports from the region representing a third of the overall imports. The only country with which Rwanda has a largely positive trade balance is Burundi, although this represents less than one per cent of Rwanda’s trade.

Central Bank statistics indicate that total trade volumes between 2006 and 2010 more than doubled, from $278 million to $600 million, mainly driven by imports which comprise machinery and equipment, steel, petroleum products, cement, construction materials, motor vehicles, textiles and foodstuffs.

Rwanda’s external current account deficit including grants worsened from $378 million in 2009, to $407 million in 2010 mainly due to trade imbalance and service deficits, statistics from the National Bank of Rwanda indicate.

The import bill is projected to hit $1,1400 million in 2011 and further to $1579 million by 2015 due to implementation of ongoing strategic investment projects and the associated requirement of capital goods for these projects.

The government’s strategic investments that will require heavy importation of capital goods include the ongoing construction of the world-class Kigali Convention Centre, which will include a five-star hotel, and construction of a world class airport at Bugesera, expected to commence next year.

However, Mr Gara noted that the trade deficit will be addressed by the recently approved National Export Strategy which provides a five-year framework for boosting exports.

In particular, under the strategy, the short and medium term targeted sectors are increasing production and value addition of traditional export sectors of tourism, tea, coffee and mining.

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