Page last updated at 10:03 GMT, Friday, 21 November 2008

Rwandan growth could reach 10%

coffee beans
Coffee is one of Rwanda's top exports

Rwanda's booming manufacturing and farming sectors could push growth in the country to 10% this year, according to the Rwandan central bank governor.

Agriculture is particularly strong and is growing at a minimum rate of 10%, said Francois Kanimba.

But Rwanda's growth rate is likely to fall to 6-7% next year because of the global financial crises.

Several African countries are feeling the fallout of the financial crisis and are readjusting their growth forecasts.

"The current assumption we have [for 2009] is a growth rate of 6-7%, not more," Mr Kanimba told Reuters news agency.

He also said that the drop in commodity prices, a slowdown in the growth of manufacturing and services and a decrease in the amount of remittances Rwanda received would contribute to the lower figure.

Agricultural growth

But he maintained a positive outlook on 2008's growth figures.

"I do not see why economic growth will not be close to 10%."

"Agriculture output is growing at a minimum of 10% ...manufacturing and service sectors over the last five years have averaged higher than 10%," he added.

The forecast 2008 growth rate figures are considerably higher than last year figure of 6%.

Rwanda has been trying to revamp its battered economy since the 1994 genocide. It is particularly ramping up its farming, tourism, mining and energy sectors.

Franc fears

At the same time, Mr Kanimba revealed that the Rwandan franc is overvalued by 10-15%.

The governor attributed the overvaluation to Rwanda's high inflation rate compared to its trading partners.

Inflation in the country stood at 21.9% in October. Mr Kanimba said he anticipated the figure would fall to single digits in 2009.

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