Unemployment and poverty threaten Rwanda growth – IMF

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International Monetary Fund disclosed that problems which include rising unemployment and poverty looms in Rwanda despite the fact the economy is recovering and growing fast.

According to IMF, this year the country’s economy is projected to expand by 7.0 percent, slightly below the anticipated 10.2 percent.

The government now faces the twin challenge of mitigating the pandemic-induced increase in unemployment and poverty.

The World Bank estimated that because of the lockdown, social distancing rules and increased costs associated with the pandemic, the number of poor people is likely to rise by 5.1 percentage points (more than 550,000 people) in 2021, with over 80 percent of the new poor in rural areas.

Despite the government acting swiftly to mitigate the shocks, including setting up a multi-million dollar Special Economic Recovery Fund and expanding its social protection programmes, analysts say more interventions are needed to get more Rwandans back to work.

According to Bo Li, deputy managing director and acting chair at the IMF, the Covid-19 pandemic has raised unemployment and poverty in Rwanda, which risks reversing hard-won gains.

“With the acceleration of vaccinations and the resumption of economic activities, a strong economic rebound is underway, although risks remain tilted to the downside given the still low vaccination rate and the prospect of repeated Covd-19 waves,” he said in statement.