President Kagame Sees Growth – Focus on Banking, Mining, Construction

President Kagame Sees Growth - Focus on Banking, Mining, ConstructionEconomy may expand 6% in 2017 and 7% next year: Kagame

Growth supported by domestic demand, better commodity prices

The economic index for Rwanda is expected to see a fast paced growth this year and next as the outlook for industries including financial services, tourism and mining improves. Sectors like construction and infrastructure are the foundation for this acceleration.

Mr. Kagame said in an interview in Dubai that the pace of expansion is expected to increase to 7 percent next year from about 6 percent this year. That compares with 2016’s growth rate of 5.9 percent, which was a three-year low. Output has already increased in the second and third quarters after slowing last year when infrastructure projects were completed.

Mr. Kagame is optimistic “The driving sectors are services, financial services, tourism, they are all combined to make this high growth. We are seeing mining activity growing very fast. We are seeing agriculture making a very good contribution, construction has picked up again.”

The economy of Rwanda has expanded an average of more than 7 percent a year since Mr. Kagame took office in 2000. The 60-year-old leader’s rule of the East African nation was extended in August, after a 2015 referendum backed amending the constitution to remove a two-term limit. He has been credited with turning Rwanda into one of Africa’s top performers by cutting red tape and improving infrastructure. But there are critics to the same.

IMF Estimate

The International Monetary Fund estimates that growth in Rwanda will reach 7.5 percent by 2022, adding forecast of 6.8 percent in 2018.

Growth is also being supported by stronger domestic demand and improved prices for metals the country produces including tantalum, tin, tungsten and gold

As per sources, Rwanda has no immediate plans to tap international capital markets. It last raised $400 million in a Eurobond offering in 2013. A five-year Treasury bond for 10 billion francs ($11.7 million) on its local market was more than two times oversubscribed in August and had a 12.2 percent yield. The next issue will be a seven-year bond on Nov. 22.

Moody’s Investors Services rates Rwanda’s debt at B2, five levels below investment grade and cites the country’s “robust institutional framework” as an important credit strength. Economic growth is being buttressed by infrastructure projects including the construction of the $700 million Bugesera international airport in southern Rwanda.