Modern services driving Rwanda growth – World Bank Report

m_Modern services driving Rwanda growth – World Bank Report

Rwanda’s growth is being pushed by modern services according to the attest World Bank Report

A new World Bank report has indicated that Rwanda is among the African countries that will experience a steady growth up to 5.2 percent in 2014 with a strong investment growth and household spending.

The report, Africa’s Pulse classified Rwanda and Ethiopia among the non-resource-rich countries, which experienced solid economic growth in 2013.

The report says that Rwanda is one of the countries where modern services exports recorded annual growth rates of over 10 percent between 2005 and 2012, starting from a low base of less than $40 million in services exported in 2005 to over twice that amount at almost $85 million by 2012.

Mauritius and Rwanda are said to have had rapid expansion in modern services due to increased activity in tradable business and financial services.

 “While Mauritius, Rwanda, and Tanzania have experienced a rapid increase in modern services, others like Kenya are also emerging as places where modern services are becoming drivers of growth and development.

This is exciting news for other African countries looking to expand into the globalized services business.” says Punam Chuhan-Pole, Lead Economist of the World Bank’s Africa Region, and author of Africa’s Pulse.

Makhtar Diop, the World Bank Group’s Vice President for Africa says that a number of African countries are now among the world’s fastest-growing countries as a result of sound macroeconomic reforms, and a significant opening into the continents opportunities for trade, investment, business, science and technology, and tourism in recent years.

Diop, however, says that “Poor physical infrastructure will continue to limit the region’s growth potential. Significantly more infrastructure spending is needed in most countries in the region if they are to achieve a lasting transformation of their economies.”

The report suggests that Sub-Saharan region’s infrastructure deficit is most acute in energy and roads and that across Africa, unreliable and expensive electricity supply and poor road conditions continue to impose high costs on business and intraregional trade.

Apparently, Rwanda’s growth has seen an improvement in doing business and making it easy to register a business and the country has been ranked in position 32 out of 189 countries in the latest World Bank data provided on Doing Business 2014

The Fitch Ratings 2013 report predicted that Rwanda has to maintain peace and stability and success succession plans in the country’s leadership to be able to cushion the effects of the world economic crunch and perform well economically.

Fitch Ratings say that political stability should prevail and President Paul Kagame’s leadership and the sense of stability highlight the importance of an orderly succession after 2017.

Under Kagame’s leadership Rwanda has witnessed tremendous transformation after the country was destroyed during 1994 genocide against the Tutsi.

The country has witness continued rapid and inclusive real GDP growth, at 8% in 2012 and 8.3% on average since 2005 and at least 1million Rwandans have moved above the poverty line.

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Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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