Impact of COVID-19 Pandemic on Business Start-ups, Money Supply, Lending Interest Rate, International Trade, Savings, Investments, and Economic Growth : VAR Model for Rwanda
By : Mr. Tharcisse NZASINGIZIMANA, M.D., Prof. Bruno OCAYA, PhD and Dr. Edouard MUSABANGANJI, PhD
COVID-19 continues to cause severe economic negative effects in the whole world and particularly in developing economies in Africa. Rwanda has not been spared of the pandemic. These negative impacts are worsened by the lack of enough vaccines. In Rwanda, the pandemic impact on business start-ups, money supply, interest rates, credits, international trade, savings, investments, and economic growth comes on top of already declining trend with slow recovery noticeable with the release in set virus countermeasures which include the halt of some non-essential economic activities. In this paper, we have analyzed business start-ups, money supply, interest rates, credits, international trade, savings, investments, and economic growth using monthly and quarterly series to show and interpret the analysis of the impact of COVID-19 on the above key macroeconomic variables in Rwanda. We have carried out the analysis by expressing the COVID-19 categorical variable as a dummy variable taking the value of zero (0) before the outbreak of the COVID-19 pandemic, that is before 2020, and the value of one (1) from when it started being felt, that is from January 2020. The results reveal that COVID-19 has contributed significantly on the contraction of the economy even though some internet- based businesses have gained ground.
Key words : Business start-ups, money supply, interest rates, credits, trade, import, export, savings, investments, economic growth, Rwanda