Political stable environment
The president, Paul Kagame, will dominate the political scene following his overwhelming re-election to a second and final term in August 2010, and there will be little real political opposition to the governing Rwandan Patriotic Front (RPF). Diplomatic relations with the Democratic Republic of Congo will be warmer, and the Economist Intelligence Unit expects increased collaboration between the Congolese armed forces and the Rwandan Defence Force to contain the threat posed to both by the apparent alliance between disaffected Congolese Tutsis and a militia opposed to the Rwandan government, Forces democratiques de liberation du Rwanda. Real GDP growth is forecast at 6.8% in 2011, picking up to 8% in 2012 on the back of an improved power supply and higher external demand. The inflation rate is forecast to average 7.5% in 2011-12, but this remains vulnerable to changing weather patterns and the risk is on the upside. Trade will pick up, particularly with the East African Community, and the current-account deficit is forecast at around 11% of GDP in 2011-12.
The political scene
Victoire Ingabire, leader of the Brussels-based United Democratic Forces, was arrested in mid-October for alleged links with a terrorist group. In January a military court sentenced a former army chief, Kayumba Nyamwasa, and a former head of military intelligence, Patrick Karegeya, in absentia to 24 years in prison for desertion, threatening state security and propagating ethnic division. This paves the way for Rwanda to make a formal extradition request for the two to South Africa, where they have been granted asylum.
Economic policy
In mid-October the prime minister launched a seven-year roadmap for the transformation of Rwanda into a middle-income country by 2017. Rwanda has satisfied all of the quantitative assessment criteria and structural benchmarks during the first review of the policy support instrument programme with the IMF. The central bank has cut the key repo rate from 7% to 6%. Rwanda’s fiscal situation for 2010 has been boosted by high levels of aid and we estimate a fiscal deficit of 0.4% (previously 4%) of GDP in 2010.
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The political scene
Victoire Ingabire, leader of the Brussels-based United Democratic Forces, was arrested in mid-October for alleged links with a terrorist group. In January a military court sentenced a former army chief, Kayumba Nyamwasa, and a former head of military intelligence, Patrick Karegeya, in absentia to 24 years in prison for desertion, threatening state security and propagating ethnic division. This paves the way for Rwanda to make a formal extradition request for the two to South Africa, where they have been granted asylum.
Economic policy
In mid-October the prime minister launched a seven-year roadmap for the transformation of Rwanda into a middle-income country by 2017. Rwanda has satisfied all of the quantitative assessment criteria and structural benchmarks during the first review of the policy support instrument programme with the IMF. The central bank has cut the key repo rate from 7% to 6%. Rwanda’s fiscal situation for 2010 has been boosted by high levels of aid and we estimate a fiscal deficit of 0.4% (previously 4%) of GDP in 2010.
www.reportlinker.com
