Gold pulls up exports as trade deficit nears double-digits rise
Rwanda’s exports recorded a positive outlook growing by nearly 14 percent in 2020, an increment attributed to high receipts from refined gold which tremendously grew by 134.4 percent amidst the covid-19 recession.
According to Central, export receipts fetched over USD1.4 million in 2020 up from USD 1.2 million in the previous year, lifted by refined gold and tea which grew by 3.9 percent.
Other exports recorded a sluggish growth widening the trade deficit by 8.6 percent amounting to over USD2 million from USD1.8 million in 2019.
The import receipts increase by over 10 percent to about USD3.5 million from USD3 million in 2019.
“The rise in imports reflected the increased demand for gold for processing and the rebound in economic activities recorded since the second half of the year as domestic COVID-19 containment measures eased,” Said John Rwangombwa, Governor Central Bank.
Experts say the coverage of imports by exports indicated a positive stance growing to 41.2 percent by end of December 2020 up from 40.1 percent the previous year.
Also, Rwanda’s Trade deficit with EAC went up to USD 435.6 million in 2020, from USD 356.4 million in 2019 driven by a surge in imports 3.7 percent which was also driven by the high demand for food products while exports accounted for 3.9 percent.
On the export revenue growth card for 2020, processed gold contributed 46 percent in 2020 from 22.3 percent in 2019 while re-exports contributed 22.3 percent decreasing from 28.4 percent in the previous year.
Traditional in general exports decreased to 16.6 percent from 21.4 percent, non-traditional exports went as low as 12.5 percent from 19.1 percent and informal cross border trade 2.6 percent from 8.8 percent.
Traditional exports comprising of coffee, tea, minerals, pyrethrum, and hides & skins, plunged by 11.9 percent y-o-y, to stand at USD 233.9 million in 2020. The decline was on account of falling revenues from mineral exports -17.1percent, coffee -22.7 percent, hides and skins -39.3 percent, as well as pyrethrum -18.4 percent, Central bank noted.
On the other side, imports receipts growth is mainly attributed to a rise in demand for food and health products, with food imports rising by nearly 16 percent and 13.1 percent for health products.
“There was a high demand for food as people were in lockdown and on the account that food production was slightly affected, the demand for food imports went up, so the rise in imports should not be a worry since the economy is rebounding with the ease of measures,” Davis Mukiza, a business expert told The Reports24 last week.
On the contribution to import rise share, consumer goods contributed 22.5 percent, energy and lubricants 10.2 percent, intermediate goods 22.3 percent, imports for re-exports 5.9 percent, gold 19.7 22 percent, capital goods 19.3 percent, and Informal cross border imports 0.1 percent.
Report 24 Twitter && Facebook