EAC partner states face a decline in economic growth
RwandAir’s aeroplanes at Kigali International Airport. Rwanda plans to invest in its national carrier to boost its tourism sector. PHOTO | FILE
By ALLAN OLINGO, The EastAfrican
IN SUMMARY
- Rwanda remains the only regional economy on course, with private sector–led growth being its biggest GDP contributor.
- Rwanda's service sector has pushed the country’s first quarter GDP growth to 7.5 per cent, even as the manufacturing and agriculture sectors in the region, which registered a decline, pulled down the overall growth numbers of the bloc’s economies.
Rwanda's service sector has pushed the country’s first quarter GDP growth to 7.5 per cent, even as the manufacturing and agriculture sectors in the region, which registered a decline, pulled down the overall growth numbers of the bloc’s economies.
The economies had predicted a rise in their growth rates but poor performance by several key sectors is putting this in doubt. Rwanda remains the only regional economy on course, with private sector–led growth being its biggest GDP contributor.
Yusuf Murangwa, director-general of Rwanda’s National Institute of Statistics, said that the country’s GDP grew by 7.6 per cent in the first quarter of this year.
“We have seen an average growth of 10 per cent in the trade, education, finance, insurance, transport and communications sectors,” said Mr Murangwa.
The government has been keen on attracting investment in the tourism, ICT and insurance sectors. By 2014, ICT services exports had hit the $4 million mark and are expected to register $11 million by the end of this year.
Rwanda is also investing in RwandAir to boost tourism earnings, its key foreign exchange earner. It aims to expand the sector’s annual turnover from the current $46 million to more than $350 million by 2018.
Tanzania saw a negative performance in the agriculture, mining and manufacturing sectors slowing its economy. The economy grow by 6.5 per cent in the first quarter of this year from a high of 8.6 per cent in the first quarter of 2014.
According to Tanzania’s National Bureau of Statistics, mining saw the biggest drop, of 19 per cent in the first quarter of this year. Last year, Tanzania earned more than $4.3 billion from its mineral resources, as they make up over 52 per cent of the country’s sources of foreign exchange.
Tanzania is a key exporter of gold, diamond, iron ore and tanzanite among other minerals.
Tanzania had forecast a growth in the economy of 7.4 per cent this year from the 7.2 per cent recorded in 2014, based on expected strong performances by the agriculture, construction and manufacturing sectors, which all recorded a drop in growth in the first quarter of this year.
Kenya saw its economy expand in the first quarter of the year, with the Kenya National Bureau of Statistics, noting that all the sectors — with the exception of the tourism and manufacturing sectors — recorded positive growth.
Kenya Tourism Board data shows that international arrivals dropped to 347,458 in the first half of the year, compared with 428,585 in the same period last year.
IN SUMMARY
- Rwanda remains the only regional economy on course, with private sector–led growth being its biggest GDP contributor.
- Rwanda's service sector has pushed the country’s first quarter GDP growth to 7.5 per cent, even as the manufacturing and agriculture sectors in the region, which registered a decline, pulled down the overall growth numbers of the bloc’s economies.
The country’s construction sector was the best performing with a growth of 11.3 per cent recorded in the first quarter of the year compared with a growth of 7.6 per cent in the same period in 2014.
Growth projections
In Uganda, the depreciation of the shilling, coupled with rising inflation, is expected to slow down growth projections this year. The Uganda shilling registered a 36.8 per cent drop against the dollar this year, the biggest decline in the region.
Bank of Uganda governor Emmanuel Tumusiime-Mutebile said they have reduced the forecast for economic growth this year from 5.8 per cent to 5.4 per cent, citing inflationary pressure, a weak shilling and an increase in interest rates.
