(4 minutes read)
· Rwanda’s economy is showing signs of a recession mostly due to the restrictions imposed on account of the pandemic
· Repercussions of a slowing economy manifests in several forms, such as unemployment, poverty, macroeconomic instability and a lot more, calling for more concrete measures to streamline the economy
· The sectors hard hit include, manufacturing, tourism and several components of the services sector
Rwanda’s economy is showing signs of a recession mostly due to the restrictions imposed on account of the pandemic. Repercussions of a slowing economy manifests in several forms, such as unemployment, poverty, macroeconomic instability and a lot more, calling for more concrete measures to streamline the economy. The sectors hard hit include manufacturing, tourism and several components of the services sector.
Rwanda has imposed strict measures to counter the spread of the pandemic ever since its onset. Those measures naturally affected the economy, which has to support 12 million people. Unemployment has increased by more than 5% on account of the pandemic. In absolute terms the number of unemployed people was 550,000 people in 2021 of a population of 12 million people. Of that, more than 80% are in the rural areas, according to World Bank’s data. The sectors that were affected include services, small to medium enterprises and the leisure and tourism industry. It may be noted that Kigali, the capital city is known as a technology and knowledge hub and has for many knowledge based industries that have come up in the recent times.
To salvage the dithering economy, the government has adopted an economic recovery plan estimated at US$900 million to be implemented over two fiscal years 2019-20 and 2020-21. Tourism, which has been ticking well before the pandemic, has been a major casualty with the drying out of the foreign tourists. Experts feel that it might take more time for the sector to pick up due to disruptions in airlines that connect with countries from where the tourists come. There is also a general psyche demonstrated by the wander lusts to put the leisure travel in animated suspension. Being the top foreign exchange earner, revival of tourism without much delay has been one of the important objectives of the government to kick start the economy.
