Finance Minister Yusuf Murangwa
Rwanda Gross Domestic Product (GDP), for the first quarter of 2025, is a robust 7.8%. But how does the figure reflect the man or woman on the street, farm, office, in short, what does it mean for Rwanda, to individual Rwandans?
Although there is the odd decrease, the operative clause in the GDP growth figures, announced by the Ministry of Finance and Economic Planning (MINECOFIN), in collaboration with the National Institute of Statistics (NISR), is “increased by…”
In the first quarter of this year, GDP was estimated at Frw 5,255billion, just under $4billion, up from Frw 4,486billion, the previous year, just over $3billion.
All sectors of the economy showed an increase, leaving mining and quarrying rather lonely as the only area to show a decrease, at 3%. Even there however, the sector can justifiably interpret the decrease as encouraging news. The decrease is in fact, in large measure due to the sector consolidating the processing of the raw materials, before export, rather than a decrease in activity.
The all important agriculture sector registered a modest increase of 2%, although food crops production decreased by 1%. Production of export crops however, grew by 3%.
Industry and services tied at 9%. Perhaps some of the most impressive growth figures were in manufacturing, with the manufacture of metal products, machinery and equipment, up by 22%, manufacture of chemicals, rubber and plastic, up by 15%, manufacture of wood products, paper and printing grew by 10%, food processing by 2%, with textile, clothing and the particularly growth area of leather proucts, up 4%.
The service sector was up by 9%, with the information and communications sub sector performing especially well, with an increase of 19%.
All together, these activities in these and many other sectors, put GDP at 7.8%, a figure that matters because it reflects a promise of a rise in the living standard of Rwandans in general. A high rate of growth means increased economic activity, which means increased employment, which in turn means a better standard of living for people.
It is common for individuals to look at figures, like GDP growth, consider their own individual situation, and perhaps feel that the figure has little if any effect on their particular situation.
This would however miss the admittedly invisible thread that links the individual to the overall economy. The same individual would notice a fall in their living standards, if the rate of growth were to fall year on year, rather than rise. In otherwords, GDP is not only linked to GDP per capita, the average income per person, the latter rises out of the former.
The rate of GDP growth is also essential for Rwanda’s development ambition, as outlined in the National Strategy for Transformation, 1 and 11, (NST1 and NST11). As the country enters the second year of NST11, to develop at the desired pace, Rwanda aims to maintain a growth rate of 9.3%. This is an ambitious target, but one which in the past has been surpassed, and can therefore be equalled.
More indepth analysis of what these figures will mean for the country’s economy continues.
