Growth outlook: Rwandan central bank optimistic

Friday March 10 2017


The Rwandan economy is forecast to remain strong in 2017 given the recovering commodity prices, expected good harvests and intensified efforts to tap into new markets.

John Rwangombwa, Governor of the National Bank of Rwanda, expects the 6 per cent growth rate of 2016 to be maintained in 2017.

Growth decelerated from 6.9 per cent in 2015 due to poor global commodity prices and low spending by big buyers.

“Most commodity prices started to recover in 2016 and are expected to continue rising in 2017. Oil prices are expected to increase, following Opec’s efforts to cut supply,” said Mr Rwangombwa last week while presenting the Monetary Policy and Financial Stability Statement for the past 12 months. 

Prices of Rwanda’s minerals are expected to rise, with the closure of mines in the Philippines, China, Australia, Ireland, Zimbabwe and South Africa.

The supply gap on the international markets has seen prices of tin recover, a reprieve for Rwanda, whose mineral exports value dropped from $225 million in 2013 to $86 million in 2016.


The fall in mineral prices has not only impacted miners but also the Treasury and investors. The sector also faces reduced earnings due to the cost of compliance with conflict mineral checks in the global markets.

Renewed optimism

There is renewed optimism with the recovery in prices. The price of cassiterite, which Rwanda produces alongside coltan and wolfram, averaged $9.81/kg in 2016, from $8.91/kg in 2015.

The government is looking to diversify exports to drive growth and reduce the trade deficit, which improved by 5.9 per cent in 2016 to $1.6 billion, from $1.7 billion in 2015. But the import bill still outstrips export receipts, exerting pressures on the franc, which depreciated against the US dollar by 9.7 per cent in 2016 compared with 7.6 per cent in 2015.

Mr Rwangombwa said the franc’s depreciation is expected to ease in 2017, with the expected improvement in Rwanda’s export receipts as commodity prices recover.

“Though the bill for oil imports is expected to remain high, the overall import bill is likely to decline following the increased domestic production of some items, such as cement, which previously required a lot of forex to import,” said Mr Rwangombwa.

Banks are expected to lend more to the private sector. Diane Karusisi, managing director of the Bank of Kigali, said with the export guarantee fund, lenders are now open to financing exports.