Rwanda Economic Update, September 2022 : Boosting Exports Through Technology, Innovation, and Trade in Services

Rwanda's economy staged a strong recovery in 2021. Inflationary pressures are mounting, leading the National Bank of Rwanda to tighten monetary policy. Looking ahead, economic growth is expected to moderate in 2022-24, weighed down by the war in Ukraine. Fiscal consolidation and spending efficiencies will be introduced with the FY22-23 budget to preserve space for growth-enhancing investment. Rwandan firms' participation in international trade has increased dramatically. Econometric analysis shows that obtaining International Organization for Standardization (ISO) certification, adoption of e-commerce and access to credit are significantly co-related to a Rwandan firm's participation in exports. Innovation is significantly related to exports, although the relationship varies by sector and type of innovation. Rwanda is facing a skills deficit that, if not remedied, will constrain potential growth for high-skill services exports. Rwanda's efforts to achieve international cooperation on services trade policies have been mixed. Rwanda should address its skills shortage by recognizing qualifications of regional professionals and abolishing work-permit regimes for all eligible regional professionals. However, the attraction of regional services providers should be accompanied by aggressive measures to help expand the number of Rwandan professionals