Rwanda has committed an additional US$150 million in corporate finance to spur growth and mitigate the ongoing impact of the coronavirus pandemic on the economy.
The funds come from the US$250 million The $1,000 Economic Recovery Fund, launched in June 2021, are earmarked for the private sector, particularly manufacturing.
This is intended to boost local manufacturing as the country seeks to rein in rising prices and reduce imported inflation.
The first phase prioritized sectors hardest hit by the pandemic, including hospitality.
During the official launch of the second phase on Wednesday, Prime Minister said Edouard Ngirente, the funds would help the country face the current inflationary pressures and rising prices.
“The current global inflation is having a major impact on our economy… the government has invested in subsidies and attracted investors in the manufacturing sector to boost local production and reduce our dependence on imports,” said Dr. Ngirente.
The government will continue to add subsidies to essential commodities such as fuel to ease the burden of rising prices.
Since last year, the government has subsidized fuel and transportation , making transport prices less onerous for the public.
Rwanda is heavily dependent on imports, with a trade deficit of $216.43 million in 2021, according to National Statistics of Rwanda.
Rwanda’s Development Bank (BRD) will disburse the funds with low interest rates that can be disbursed in 5-15 years with half the required guarantee.
Women, people with disabilities and youth will receive special loans that none Guarantee required.
Rwanda saw a price increase of 5 percent in the first three months of 2022 compared to 2 percent in 2021. The increase was striking for some essential commodities such as oil and sugar, whose price e almost doubled in a few months.
Some of the priority sectors include agricultural processing, building materials manufacturing, light industry and packaging materials.
In 2021, manufacturing and real estate sectors belonged among the leading investment attractions for Rwanda the recreation trail. The growth in investment in the real estate and manufacturing sectors has been attributed to tax incentives for investors, supplemented by tax and non-tax incentives.
Currently, 8.5 million of the country’s 12.9 million population are fully vaccinated. The goal is to reach 9.1 million people by June. This has given the government enough confidence to almost fully reopen the economy, end mandatory face masks and lift the lockdown.