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Select Economic and Financial Indicators2014201520162017e2018f
Real GDP (% change)7.68.95.95.26.5
GDP (USD bn)8.08.38.48.99.4
Inflation (average)1.82.55.74.94.7
Fiscal Balance (% GDP)-4.0-2.8-3.8-5.3-4.5
Broad Money (% change, end period)18.821.17.613.013.2
Population (mn)11.0011.2711.5511.8412.13
Exports (USD bn)1.31.51.61.81.9
Imports (USD bn)2.72.93.13.03.2
Current Account Balance (% GDP)-11.8-13.4-14.9-8.8-10.0
FX Reserves (USD bn, end period)0.90.91.10.91.0
Exchange Rate (average)685.67718.95785.54837.74861.02

Economic Outlook

Economic Outlook

Real GDP: Economic growth in 2018 should recover from the slowdown over the past two years, as improved rainfall underpins an expansion in agricultural output (30% of GDP) after the drought-induced slump in 2016 and early 2017. Furthermore, following the start of work on the Bugesera International Airport, construction activity (7% of GDP) should continue to record robust growth. In addition, recent emphasis on boosting domestic manufacturing under the ‘Made in Rwanda’ initiative should create headroom for growth in industrial output, while continued progress on increased business tourism will be aided by the completion of the Kigali Convention Centre in 2016. In all we estimate an uplift in real GDP growth to 6.5%.

Inflation: The improvement in rainfall and completion of several irrigation projects in Eastern Rwanda should help stabilise food prices on account of an improved food harvest. Furthermore, inflationary pressures will be contained by a broadly stable RWF. Thus, while higher oil prices in will cause monthly inflation to pick up over 2018 (from 0.7% y/y in December 2017), average inflation for the year is expected to be contained below the 2017 average of 4.9%.

Fiscal balance: The Paul Kagame government intends to continue its expansionary fiscal stance as it continues to implement its RWF2.094trn budget for 2017/2018 (a 7% increase over the previous fiscal year). The increase in spending reflects higher capital outlay with funding for the construction of the Bugesera International Airport, as well as last year’s presidential election. In the 2018 calendar year, revenues are expected to increase, amid a recovery in tea export revenues on improved rainfall and higher mining receipts as commodity prices trend higher. Over 2018, we see stronger revenues and fiscal consolidation, post the election-induced uplift in expenditure, as providing scope for a lower fiscal deficit.

Current account: Better weather conditions should underpin higher exports of tea (12% of exports) and coffee (10% of exports), and a rebound in commodity prices may bolster mining exports (25% of exports). Nonetheless, rising oil prices on petrol imports, and higher capital imports to fund the public works outlay point to a wider current account deficit in 2018 (around 10% of GDP) relative to 2017 (8.8%).

Risks

Given the role of agriculture in economic activity, adverse weather shocks, in particular, re-emergence of arid conditions pose downside risks to output growth and inflation. In addition, the regional political environment (particularly given tense political climates in DRC and Burundi) poses risks to Rwanda’s security and growth outlook.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange rate structure

RegimeManaged Float
TargetNo target, but NBR intervenes at the margins of the market to smooth temporary volatility.
Type of interventionVia spot market
Convertible currency?No
Market participantsn/a
Source: Bloomberg, IMF, and Ecobank Research

FX

FX ProductsSpotForwardsNon-deliverable ForwardsOptionsSwaps
On offerYesNoNoNoNo
Daily trading volume (USD mn)n/an/a
Average trade size (USD mn)n/a
Average spreadn/a
Trading hoursLimited
Settlement cycleT+2
FX Market StructureOfficial exchange rate is the weighted average calculated from a previous FX interbank market transaction and an intervention transaction buy the NBR. The NBR applies a margin of +/-0.8% to the official rate to derive a customer rate.
Non-resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowNo restrictionsn/a
Financial flowSome restrictions on the import and export of capital
Resident FX RegulationsSpotForwardsNon-deliverable ForwardsOptionsSwaps
Trade and FDI flowNo restrictionsn/a
Financial flowSome restrictions on the import and export of capital
Source: Bloomberg, IMF, and Ecobank Research

FI

Primary MarketTreasury billsTreasury notesTreasury bondsCentral Bank billsOMOs
IssuerGovernmentn/aGovernmentn/a
End useGovernment financingGovernment financing
Maturity structure28- to 364-days2- to 15-yrs
CouponZeroFixed
Coupon paymentsn/aSemi-annual
Secondary Market
Daily trading volumeLimited tradingn/a
Average trade sizeLimited trading
Settlement cycleT+2
Ecobank local affiliate contact details:
Ecobank Rwanda, Plot 314 Avenue de la Paix, Kigali
Tel: +250 788 16 10 00
Source: Bloomberg, IMF, and Ecobank Research

FI Primary Market information

FI Primary Market information

Rwanda Debt2014201520162017e2018f
Government debt (% GDP)29.133.437.640.242.1
Sub-Sahara average44.552.656.155.655.8
External debt (official creditors, % GDP)22.826.934.437.038.9
Sub-Sahara average25.530.231.932.933.2
External public debt stock (USD bn)1.82.22.93.33.7
Share of total sub-Sahara debt (%)0.70.91.01.01.0
Source: IMF and World Bank

Commodity and trade information

Commodity and trade information

Hydrocarbon & mineral production

Rwanda has a small mining sector producing ores of tin, coltan and tungsten for the global market. The country produced 4,116 tonnes of tin ore and 1,154 tonnes of tungsten in 2016. However, output of other minerals is unclear given the high level of smuggling of conflict minerals from neighbouring countries (notably the DRC) into Rwanda. The USA’s AB Minerals plans to open Africa’s first coltan processing plant in Rwanda which is intended to process coltan from the wider region. Rwanda also produced 2 tonnes of gold in 2016.

Rwanda has no known hydrocarbon reserves.

Soft commodity production

Agricultural production in Rwanda is focused on output of staple crops for domestic consumption, with relatively low output of cash crops for export. Rwanda is a small producer of Arabica coffee, with output of 240,000 60-kg bags in 2016/17 (April-March). Although Rwanda is a marginal producer of coffee, it has attracted a loyal following from specialty buyers for its Bourbon variety of Arabica beans (known for its chocolaty flavour), earning the country a niche in the lucrative specialty market, which now represents one third of Rwanda’s coffee outturn. Rwanda is also a small producer of black tea with estimated output of 19,000 tonnes in 2016, 80% of which is sold via the Mombasa tea auction.

Trade flows

Imports

Rwanda’s imports totalled US$2.1bn in 2016. Rwanda is entirely dependent on imports of capital and consumer goods, as well as industrial raw materials. The country imported machinery, vehicles and electronics together worth US$565mn in 2016, reflecting the underdevelopment of its local manufacturing sector. The country also imported US$242mn worth of iron & steel, cement and plastics for the industrial sector, as well as US$86mn worth of pharmaceuticals. Food imports were relatively modest, led by cereals (US$87mn), sugar (US$61mn) and palm oil (US$57mn).

Exports

Rwanda’s exports totalled US$622mn in 2016. Re-exports of petroleum products to neighbouring countries, worth US$108mn in 2016, were the most valuable export. Rwanda also re-exported US$50mn worth of cereal & flour and US$15mn worth of machinery. The most valuable mineral exports were gold (US$80mn) and metal ores (coltan, tin & tungsten) which together were worth US$86mn. The largest soft commodity exports were tea (US$74mn) and coffee (US$60mn).

  • Flag
  • Population
    12.13M
  • Area
    26,338 sq km
  • Capital
    Kigali
  • Largest city
    Kigali
  • Official language
    Kinyarwanda,French, Swahili and English
  • Major languages
    Kinyarwanda,French, Swahili and English
  • Currency
    Rwanda Franc

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