Rwanda to continue with prudent monetary policy amid strong economic growth

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“Our monetary policy and financial statement normally attracts many people so we had a full house listening to what the performance of the economy has been and what are the prospects going forward,” governor of the National Bank of Rwanda John Rwangombwa told CNBC Africa on Tuesday.

“On the monetary policy point of view, we work closely with our colleagues on the fiscal side. That coordination between the monetary policy and the fiscal side is very key and that has helped to really synergise our efforts to grow our economy, so we’ve maintained a prudent monetary policy stance over the past year,” said Rwangombwa.

Rwanda’s GDP growth is projected at 7.5 per cent, which is buoyed by off the charts exports. The Rwanda Stock exchange index is up 40 per cent for the year to date.

The companies listed on the stock exchange continue to do well and despite the global and internal challenges faced by the Rwanda economy last year, growth projections remain positive. The country’ stock exchange is among the youngest in the continent, having been founded in 2011.

The oil prices do however have an effect on Rwanda’s inflation as oil is one of the country’s biggest imports. Any increase in the oil price would therefore affect different parts of the East African nation’s economy.

When you look at our inflation basket, oil and food means a lot and any negative or positive change there has a direct impact on our economy,” Rwangombwa explained.

According to the World Bank’s 2013 Africa Competitiveness Report, Rwanda ranks among the top 40 countries in terms of general governance indicators, openness to investment, ease of hiring foreign labour, and the availability of trade finance.

The report gives a detailed competitiveness profile of 38 African countries as well as common challenges such as the infrastructure deficit and regional integration.

Rwanda is also 15th in terms of high levels of physical security when compared with Latin American countries, followed by Senegal at 38th and Botswana at 39th. Rwanda is currently ranked 63rd out of 144 countries in the bank’s global competitiveness index.

Rwanda’s main export products are tea, coffee, and mineral products such as tin ores, niobium, tungsten, and chromium, which accounted for 88 per cent of the country’s exports in 2012.