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Rwanda projected to retain top spot in East Africa’s economic growth

By Wycliffe Nyamasege
On 17 June 2024 at 11:43

Rwanda is projected to retain its top spot as the fastest-growing economy in East Africa, with growth rates of 7.6 percent in 2024 and 7.8 percent in 2025, according to the latest World Bank Global Economic Prospects report.

Rwanda, covering 26,338 square kilometers and home to about 13 million people, has recorded tremendous growth over the last three decades since the 1994 Genocide against the Tutsis, which left the nation on its knees. Last year, the country achieved a remarkable growth rate of 8.2 percent, reaching a GDP of $35 billion.

According to the World Bank, strong growth is expected to continue in the construction and manufacturing sectors in Rwanda, while agricultural production is forecast to rebound following two years of weak performance. Gains recorded in the tourism sector are also expected to contribute to the country’s growth.

The World Bank report further indicates that Uganda and the Democratic Republic of Congo (DRC), ranked second, are projected to grow at a rate of 6.0 percent in 2024, followed by Tanzania and Kenya at 5.4 and 5.0 percent, respectively.

Uganda’s economic growth has been attributed to investments in the oil sector, with the country also set to benefit from increased global tourism. Kenya, which boasts the biggest economy in the region, is expected to see its economy grow by 5.3 percent, with the World Bank attributing the growth to a strengthened macroeconomic framework and regained access to international financial markets.

Burundi, also a member of the East African Community (EAC), is expected to record a growth rate of 3.8 percent, with Somalia slightly behind at 3.7 percent. South Sudan is ranked the lowest, with a growth rate of 2 percent.

Risks

While acknowledging the positive trends, the World Bank warned of several potential risks to the economic outlook.

“Risks to the outlook are tilted to the downside. Downside risks include increasing global geopolitical tensions, especially an escalation of conflict in the Middle East; a further deterioration in regional political stability; increased frequency and intensity of adverse weather events; higher-than-expected inflation; a sharper-than-expected economic slowdown in China; and increased government debt distress, especially if elevated public debt cannot be stabilized or new sources of financing do not become available,” the report reads in part.

On the continental level, after a sluggish year in 2023, Sub-Saharan Africa’s economic outlook is brightening. The region is projected to experience an acceleration in growth, rising from 3 percent in 2023 to 3.5 percent in 2024. This momentum is expected to continue, with growth averaging around 4 percent annually in 2025 and 2026. This positive shift is driven by easing inflation.

According to the National Bank of Rwanda, the country achieved a remarkable growth rate of 8.2 percent, reaching a GDP of $35 billion in 2023.

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