International Agriculture News

Why agriculture growth projections are going down

Although agriculture contributes significantly to the country’s economy, its growth projections continue to go down, comparing to the past years while industry and service sector growth projections maintain an upward trend.

Agriculture is projected to grow by 5.6 per cent in 2018 down from 7 per cent in 2017, according to latest figures from the National Institute of Statistics of Rwanda (NISR).

Concerns arose among Members of Parliament when the sector, on which over 70 per cent of the country’s population directly depends, saw its growth even projected further down to 4.5 per cent in 2019 and 4.3 per cent in 2020.

The concerns were raised by Members of Parliament in the committee on the Budget and National Patrimony while reviewing the 2018/19 budget law on Tuesday.

Addressing the legislators’ concerns, Caleb Rwamuganza, the Permanent Secretary at the Ministry of Finance and Economic Planning, explained that agriculture sector growth going down does not mean its production will reduce.

“Agriculture is not slowing down, but its growth is not expected to increase at the same pace as it did the past year. According to the National Strategy for Transformation (NST1), our projection is that, in order to become a higher middle income country by 2024, industry and services sectors have to perform better than agriculture”.

Agriculture grew by 8 percent while industry and services grew by 7 per cent and 12 per cent respectively, according to the statistics’ body’s report of the first quarter of 2018.

Industries are projected to grow by 8.3 per cent in 2018, and could rise to 13.1 per cent in 2019 and 13.9 per cent in 2020, according to the NISR statistics released early this week.

On the other hand, services growth projection is 7.6 cent in 2018 down from 8 per cent in 2017 and it is expected to grow by 7.8 per cent in 2019, with the same growth rate also projected in 2020.

“Their (industry and service) pace in productivity is faster than agriculture sector. This is also part the government’s seven-year programme, where industries and services are projected to be more productive than agriculture like the statistics indicate”.

Meanwhile, government is planning to increasingly use irrigation in many parts of the country as one of the approaches to increase agriculture production.

Talks are ongoing with the government of Israel on the upcoming Rwf 32 billion irrigation project that will soon be implemented to boost Rwanda’s agriculture production, he said.

Constance Mukayuhi Rwaka, the Chairperson of the Committee on National Budget and Patrimony said the agriculture growth can be boosted by the implementation of pending projects and conducting extensive research to inform future projects within the sector.

She emphasised that all the three sectors are important, and should not be looked at as mutually exclusive because they can be interdependent.

She said agriculture is crucial even for the industry sector, adding that most of the industries are engaged in agri-processing, and this, she said, has the potential of ensuring the industry sector impacts as many Rwandans as possible.

“There are different pending projects; different research on agriculture can be taken into consideration.  Although more efforts will be put into industry, most of the industries will be processing agricultural production.

That’s why efforts are also needed in increasing agriculture production so we do not go short of the produce and it will all depend on the budget planning of related sectors,” she suggested.

According to NISR, the industry sector growth during the first months of this year, mainly benefited from food processing which increased by 9 per cent.