World Bank Raises Rwanda 2019 Growth, Delays Tanzania Loan Decision

LAGOS (Capital Markets in Africa): Economic growth in Rwanda could accelerate to more than 10% this year if the construction of a planned $1.3 billion airport starts, according to the World Bank, which increased its estimate for 2019 expansion for a second time.

Growth was likely 8.5% last year, more than the 7.8% the Washington-based lender had initially anticipated, according to World Bank Senior Economist Aghassi Mkrtchyan.

“The growth will be driven by an unexpected magnitude of fiscal expansion,” he told reporters in the capital, Kigali. “Growth is expected in double digits if works on Bugesera airport are implemented this year or next year, but medium-term growth remains strong” and is projected at 8%.

Rwanda and Qatar Airways have agreed for the Gulf airline to take on construction and operational work for the airport in exchange for a 60% stake in the facility.

While the monetary policy will remain accommodative, the return of inflation to the “normal range” and exchange-rate pressure have narrowed the central bank’s policy space, he said. Rwanda’s fiscal deficit for 2020 will remain “well above” the historical average between 8% and 8.2%, he said.

World Bank Delays Tanzania Loan Decision on Rights Concerns
The World Bank postponed its decision to fund an education project in Tanzania after activists criticized government policies for restricting pregnant girls from attending school.

The Concerned Citizens of Tanzanian Civil Society wrote to the lender asking to delay approval of a $500 million loan until President John Magufuli’s administration affirms the right of pregnant girls to attend school and ends compulsory pregnancy tests. A board meeting on the project aimed at improving girls’ access to secondary education had been scheduled for Tuesday.

Discussion of the project will be moved to a future date after a World Bank board member requested a delay, according to information from the Washington-based lender.

Foreign Minister Palamagamba Kabudi said critics are misrepresenting the government’s policies, and that the administration cares about education for all girls, including those who drop out after they fall pregnant. “We have come up with something called ‘Alternative Pathway’ which is non-discriminatory,” Kabudi said at a Monday meeting in Dar es Salaam without giving details.

Magufuli, who’s expected to seek re-election in October, has been hailed for improving government efficiency and fighting graft during his first five years in office. He’s also been criticized for what advocacy groups including New York-based Human Rights Watch say is a suppression of basic freedoms, and economic policies that have discouraged private investment.

Source: Bloomberg Business News