Rwanda’s Economy to Expand 7% as Subsidies Boost Farm Output

Bloomberg:

 Rwanda’s economy will probably expand 7 percent this year as the government steps up subsidies to farmers and construction expands, Finance Minister John Rwangombwa said.

Economic growth may accelerate further to 8 percent in 2011, after reaching 6 percent in 2009, Rwangombwa said in an interview yesterday in Abidjan, the commercial capital of Ivory Coast.

Rwanda began paying subsidies to farmers to buy fertilizer and seeds in 2007, with those getting financial support farming 40 percent of the country’s arable land. The government aims to increase that to half of the Rwanda’s farmland, Rwangombwa said, without giving a timeframe. Agriculture will probably expand 8 percent this year, he said.

“We think this kind of growth in the economy can be sustained,” Rwangombwa said. “Agriculture has big potential.”

Rwanda’s coffee production this year may climb 13 percent to 27,000 metric tons because of improved weather, the Rwanda Coffee Development Authority said on Jan. 6. The country produces mainly the arabica variety and exports 98 percent of the crop in the form of green beans.

The East African nation has eased access to credit and simplified rules to start up businesses to help attract foreign investment, which climbed to $230 million last year from $10 million in 2001, the minister said. Rwanda made more business- friendly changes to its regulations than any other government last year, the World Bank said in a report on Sept. 9.

Posted via email from Jim Nichols