Coffee exports boost Rwanda economy

KIGALI – Rwanda’s economy grew by 7,0 per cent in the first half of the year, thanks to increased coffee exports and growth in the construction sector, the government said late on Thursday.

Finance Minister Manasseh Nshuti said the tiny central African country was on track to reach gross domestic product (GDP) growth of eight per cent before year-end. He said he expected inflation to be kept below 10 per cent.We are targeting an average GDP growth of eight per cent and with the performance so far, we are certainly going to reach the mark,” Nshuti told reporters.A fall in Rwanda’s tea and coffee output, coupled with power shortages, had been expected to hurt economic growth but its impact was offset by a rise in global coffee prices, he said.Average prices for ordinary coffee rose to US$2,24 per kg from US$1,16 per kg last year, while the price for fully washed coffee hit a record average of US$2,90 per kg this year.Improved tourism receipts, and new exports like passion juice and flowers had also contributed to economic growth in the first six months of 2005, Nshuti said.Rwanda has struggled to rebuild its economy, left in tatters by the massacre in 1994 of 800 000 minority Tutsis and politically moderate Hutus by extremists from the Hutu majority.The country has adopted an ambitious programme dubbed “Vision 2020″ aimed at increasing per capita income to US$900 by 2020 from US$230 presently.The scheme also aims to reduce the number of people living on less than a dollar per day to 25 per cent of the 8,2 million population from 55 per cent.Nshuti called for saving habits to be improved in order to control inflation and high interest rates.-Nampa-ReutersHe said he expected inflation to be kept below 10 per cent.We are targeting an average GDP growth of eight per cent and with the performance so far, we are certainly going to reach the mark,” Nshuti told reporters.A fall in Rwanda’s tea and coffee output, coupled with power shortages, had been expected to hurt economic growth but its impact was offset by a rise in global coffee prices, he said.Average prices for ordinary coffee rose to US$2,24 per kg from US$1,16 per kg last year, while the price for fully washed coffee hit a record average of US$2,90 per kg this year.Improved tourism receipts, and new exports like passion juice and flowers had also contributed to economic growth in the first six months of 2005, Nshuti said.Rwanda has struggled to rebuild its economy, left in tatters by the massacre in 1994 of 800 000 minority Tutsis and politically moderate Hutus by extremists from the Hutu majority.The country has adopted an ambitious programme dubbed “Vision 2020” aimed at increasing per capita income to US$900 by 2020 from US$230 presently.The scheme also aims to reduce the number of people living on less than a dollar per day to 25 per cent of the 8,2 million population from 55 per cent.Nshuti called for saving habits to be improved in order to control inflation and high interest rates.-Nampa-Reuters