Rwanda's economy remains resilient despite regional headwinds

Rwanda's economy has maintained its growth momentum in 2023, despite facing external and internal negative shocks. The strong growth momentum is expected to continue in 2024 which will be led by increasing investments in the construction and tourism sub-sectors and the recovery of the agricultural sector. CNBC Africa's Derrick Muhangi spoke to Thierry Kalisa, Chief Economist of National Bank of Rwanda for more.

Fri, 22 Mar 2024 10:10:05 GMT

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Rwanda's GDP growth for 2023 exceeded expectations at 8.2%, driven by robust performances in the tourism, service, and construction sectors.
The economy is projected to sustain its momentum in 2024, with a growth rate of around 6.6%, supported by investments in key sectors like tourism, construction, and agriculture.
Rwanda's financial stability remains strong, with the country's debt situation considered sustainable due to a high percentage of concessional debt.

Rwanda's economy has defied external and internal obstacles to maintain its growth trajectory in 2023, showing the resilience and potential of the country's economic landscape. The Chief Economist of the National Bank of Rwanda, Thierry Kalisa, discussed the robust economic performance in a recent interview with CNBC Africa's Derrick Muhangi. According to Kalisa, the GDP numbers for the past year exceeded expectations, with a growth rate of 8.2%, driven primarily by strong performances in the tourism and service sectors. Notably, the ICT-related services and the construction industry also played significant roles in fueling economic activity. The rebound in agriculture in the latter part of the year contributed to the overall positive growth trend. Looking ahead to 2024, Kalisa foresees continued growth momentum, with projections indicating a growth rate of around 6.6%. The outlook remains optimistic, with investments in construction, tourism, and agriculture set to drive the economic expansion. Despite regional challenges, including the aftermath of the war in Ukraine, Rwanda has managed to maintain stability in key economic indicators. Inflation rates are within the central bank's targets, and growth projections for the region are encouraging. The country's debt situation, characterized by a high percentage of concessional debt, is deemed sustainable by international institutions like the IMF and the World Bank. This favorable debt profile positions Rwanda well compared to other nations in the region facing higher risks of debt distress. Financial stability in Rwanda's banking, insurance, and microfinance sectors remains robust, with indicators meeting regulatory standards. The central bank continues to monitor and assess potential risks to ensure the stability of the financial system. Overall, Rwanda's economic resilience, prudent debt management, and strong financial stability bode well for the country's continued growth and development.