Rwanda’s economy shrinks by 24% during second quarter of 2020 due to COVID-19

On 24 November 2020 at 12:45

Rwanda’s economy has decreased by 24.1% during the second quarter of 2020 compared to 2019 due to effects of COVID-19 as per figures from the Ministry of Finance and Economic Planning (MINECOFIN).

The Minister of Finance and Economic Planning, Dr Uzziel Ndagijimana revealed this yesterday as he presented state of national budget and economy to the general assembly of parliamentarians.

Figures show that Rwanda’s economy in 2019 respectively grew by 12.3%, 10.9%, and 8.4% in the second, third and fourth quarters.

Unlike last year’s figures, Rwanda registered 3.6% growth in the first quarter of 2020 and plummeted by 12.4% in the second quarter translating into 24.1% decrease compared to similar quarter in 2019.

Dr Ndagijimana attributed the shortfall to imposed countrywide lockdown halting many activities.

“Covid-19 effects were deeper during the second quarter from April until June including the period of lockdown spent at home putting many on standstill. This resulted into economic downfall in all sectors,” he said.

Transport, commerce, education, construction, export, hotels, restaurants and agriculture are among sectors critically affected by Covid-19.

Dr Ndagijimana explained that reopening of activities and current situation gives hope for economic recovery and expressed optimism that the country might return to normalcy if the current pace is not withheld.

“The current situation is promising as we are gradually progressing after lockdown. We are still performing below zero but moving forward. This is a good indication giving optimism for recovery,” he said.

Covid-19 has also affected employment in no smaller part. The labour force survey conducted every three months shows that jobs decreased from 3,568,934 in February to 31, 9914 in May when Covid-19 was still fresh. This translates into 10% decrease in jobs.

The latest figures in August show that jobs have increased to 3,667,611 exceeding the numbers before the first case of Covid-19 was confirmed in Rwanda.
Overall, employment was increased by 3% across all sectors of the labour force from February until August 2020.

Ndagijimana explained that international trade was also affected seen in the decrease of imports and exports which are currently on the way to recovery.

Figures from the International Monetary Fund (IMF) show that the world’s economy slumped by 4.4% due to Covid-19 but projected to grow by 5.2% in 2021 if the pandemic is less intense.

The Minister of Finance and Economic Planning, Dr Ndagijimana Uzziel presenting state of national budget and economy to parliamentarians.