Rwanda Economy Facts
Rwanda’s economy has traditionally been based on agriculture, mainly the export of tea and coffee. Nowadays, the service sector has passed agriculture in terms of the share of GDP. Growth is greatest in trade and tourism. The manufacturing industry is limited while the mining industry is growing rapidly.
Rwanda’s economy was in ruin after the 1994 genocide, but the FPR government’s liberal policy of extensive liberalization led to a rapid recovery. The bureaucracy is small in terms of African dimensions and tax collection is relatively good, which gives money to the Treasury. The country is still considered poor, but government finances are well organized and corruption is relatively small.
- Countryaah.com: Major imports by Rwanda, covering a full list of top products imported by the country and trade value for each product category.
GDP growth has been good during the 2000s and 2010s and inflation has been kept at an acceptable level. However, agriculture has been hampered by conflicts in the genocide’s trail over the right to cultivable land. The densely populated Rwanda has a constant shortage of land and food production does not increase with the population. Some Rwandans do not have enough food to eat.
Rwanda receives a lot of assistance from the outside world. Despite skepticism in the Western world about the government’s authoritarian features, Rwanda is estimated to be comparatively well-managed. The flow of aid has also been partly explained by the poor conscience of the outside world for not intervening to stop the genocide.
Rwanda’s involvement in conflicts in Congo-Kinshasa during the 2000s (see Foreign Policy and Defense), and many donors’ own financial problems, contributed to reducing foreign aid’s share of Rwanda’s state budget from almost half of 2008 to just over a third in 2014. Rwanda’s efforts to stand on its own.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including RWA which represents the country of Rwanda. Check findjobdescriptions to learn more about Rwanda.
In 2012, a number of countries froze their aid following serious allegations against Rwanda to support the newly formed M23 rebel movement in Congo-Kinshasa. To counteract the fallout, and in the long run make the country less dependent on development aid, the government started a fund to which private individuals were asked to make contributions. The government’s goal was for the “Agaciro Fund” (agaciro = dignity) to reach $ 100 million. As early as 2013, government bonds were sold for $ 400 million. The money was used, among other things, to pay off the central government debt and to build a hydroelectric plant, which from the start in 2015 greatly reduced Rwanda’s need for imported electricity.
Growing foreign debt
A little into the 2000s, Rwanda had a high foreign debt. Debt repayments have long cost the country more than 40 percent of export earnings. In 2005, however, the World Bank and the IMF stated that Rwanda had implemented debt restructuring that had begun five years earlier with their help. The country was freed from a debt of $ 1.4 billion, which caused Rwanda to save $ 48 million a year in reduced debt repayments.
Since then, however, Rwanda has made major investments in infrastructure, poverty reduction and rural development, which has led to a further increase in external debt, from $ 434 million in 2006 to $ 3.3 billion in 2017.
Rwanda has a constant deficit in its economic exchange with the outside world, which means that imports are larger than exports. The country must import some energy and food. In addition, the trade deficit has increased as residents are afforded to import more capital goods.
Trade is made more and more expensive by the coastal country’s great distance to the sea. A conflict with Uganda from 2017 has damaged trade with neighboring countries, especially after Rwanda closed an important border crossing in early 2019. There is extensive smuggling to Congo-Kinshasa and Burundi.
Rwanda is part of a Customs Union within the East African Community (EAC) (see Foreign Policy and Defense).
FACTS – FINANCE
GDP per person
US $ 773 (2018)
US $ 9,509 million (2018)
8.7 percent (2018)
Agriculture’s share of GDP
29.0 percent (2018)
Manufacturing industry’s share of GDP
5.9 percent (2018)
The service sector’s share of GDP
47.8 percent (2018)
3.5 percent (2019)
Government debt’s share of GDP
40.7 percent (2018)
US $ 3,338 million (2017)
US $ 1,126 million (2018)
US $ 2,032 million (2018)
– US $ 747 million (2018)
Commodity trade’s share of GDP
39 percent (2018)
Main export goods
Coffee, Tea, Gemstones, Metals (2018)
Largest trading partner
China, India, Uganda, United Arab Emirates, Congo-Kinshasa, Hong Kong, Switzerland-Liechtenstein (2018)
Cooperation with Congo-Kinshasa against militia
Rwanda and Congo-Kinshasa agree on joint action against militia in the border area between the two countries.
The death penalty is abolished
Rwanda abolishes the death penalty. About 800 people sentenced to death receive their sentences converted to life imprisonment.
The president is pardoned
President Pasteur Bizimungu is pardoned by President Kagame and released from prison after serving just under three years of his 15-year sentence.
Suspected war criminal is handed over
The Criminal Court in Arusha is for the first time submitting a case to another country’s judiciary. The former head of the Rwandan tea industry is to be investigated in the Netherlands.
Presidential thinking is requested to be handed over
A French court denies an asylum application from Agathe Habyarimana, widow of Rwanda’s former president. She is considered one of the brains behind the genocide and has lived in France since 1994, where she is believed to have been taken with the French army. Rwanda requests her extradition.