Rwanda set to evaluate economy every 3 years

Saturday October 25 2014

Farmers learn best practices from their peers at an agricultural exhibition in Kigali. PHOTO | FILE

Rwanda is set to start re-evaluating its economy every three years in order to obtain accurate data for planning amid rapid economic expansion. This puts the country ahead of its peers in East Africa that have recently embarked on rebasing after every five years.

Rwanda’s economy grew by 7.4 per cent in the first quarter of 2014 compared to 4.7 per cent registered in the same period in 2013, largely driven by the services sector, which contributed 48 per cent of the total GDP.

The country is now planning to rebase in 2016, as the government intensifies agricultural efforts to orient the economy to move towards services and industry by the year 2020 when it is targeting to achieve middle income status. 

This is intended to reduce the country’s dependency on agriculture whose contribution to GDP is currently estimated at 33 per cent as of 2013.   

READ: EAC States to rebase their economic data by 2015 end

“We have been doing it every five years but narrowing it to some of the best international developed standards to — we will be doing for three years,” said Claver Gatete, the Minister for Finance and Economic Planning.


“We found that during that period so many things change — now you find that, for instance, Information Communication Technology (ICT)  services is coming up in a very strong way, which it did not have some time back.”

Rwanda rebased its economic data last year to more than triple its Gross Domestic Product (GDP) per capita to $701 last year from $206 in 2002, despite having 44.90 per cent of the population of 11 million people — living in absolute poverty.

GDP expanded

The country’s GDP expanded to Rwf4,915 billion last year from Rwf3, 017 billion in 2009. While the service sector currently accounts for 47 per cent of GDP, the government is targeting to increase this to rise to 55 per cent in 2020 to make it the leading job creator in the economy.

“In the first quarter of this year — it (ICT) contributed 2 per cent of GDP, but when we went to the second quarter it contributed 3 per cent of GDP.

But these things were not there five years ago-now that is why it is very important to take into account the changes in terms of consumption patterns and this is why we are going to do it every 3 years,” Mr Gatete said. 

The government is keen to have accurate data to facilitate the country’s implementation of its second poverty eradication strategy — the Economic Development and Poverty Reduction Strategy (EDPRS2), in which it has ambitious target of double digit growth of 11.5 per cent and reducing poverty levels by at least 15 per cent - from 45 per cent to fewer than 30 per cent over the next five years.

The country’s target is to become a middle income economy by 2020 with $1240 GDP per capita.

“Our economy has been growing — with development that is taking place this is the time that we need to have accurate data and information,” Mr Gatete told The EastAfrican. “As we implement our second EDPRS — we need accurate numbers that are going to help in terms of decision making.”

This week one United Nations Rwanda offered government a grant (100 per cent) worth $7.2 million (approximately Rwf4.96 billion) to strengthen the capacity of national and sub-national institutions to generate data. 

The funds will specifically support capacity building for data production in socio-demographic and economic surveys including census, the comprehensive food security and vulnerability analysis and demographic and health survey.

It will also support integrated households living conditions survey among other sectors.