Business and Economics
COUNTRYAAH, Rwanda's business was long hampered by the country's
isolated location and its overpopulation. During the first
half of the 1990s, the situation worsened further as war and
genocide destroyed the country's economic and social
Thanks to significant financial support from the outside
world, Rwanda recovered from the civil war, and during the
1990s, the country's economy grew sharply. For several years
in the early 1990s, the country had a GDP growth of over 10
percent, and the positive development has continued since
In 2018, the country's GDP per capita was US $ 773, which
is more than three times that of the turn of the millennium
2000. However, nearly half of the population still lives
below the national poverty line. After all, in a report at
the end of 2014, the country received praise from the
International Monetary Fund (IMF) for economic growth to
benefit the poor as well and for income disparities to
decrease. Poverty reduction is part of the government's
strategy to ensure political and social stability. Large
write-offs of foreign debt have also improved Rwanda's
However, President Paul Kagame's regime has been
criticized for becoming increasingly authoritarian.
Accusations of involvement and support for the rebel
movement in the mineral-rich but by force torn-apart eastern
Congo (Kinshasa) prompted several countries to freeze the
otherwise comprehensive aid to the country in 2012.
The vast majority of the country's population (90
percent) are employed in agriculture. Although coffee and
tea are the most important export goods, agriculture is
dominated by self-cultivation. However, the country is
forced to import food to meet its needs. Fishing is
conducted to a limited extent, mainly in Lake Kivus.
The government has set the goal that by 2020, the country
should have evolved from an agricultural-based low-income
country to a middle-income country where the economy is
driven forward by a knowledge-based service sector.
Investment in economic restructuring, rural development and
increased productivity in agriculture and reduced youth
unemployment have begun to show results. To the benefit of
Rwanda also speaks to the fact that corruption in the
country is relatively low.
The country is now also considered to be the countries in
Africa where it is easiest to start and run businesses.
According to the World Bank, however, the private sector,
which is still largely informal, needs to grow in order for
economic development to continue. A serious inhibitory
factor for growth is the substandard infrastructure, which
makes it difficult to transport goods, both inland and
partly between Rwanda and neighboring countries. The lack of
electricity and the poorly developed electricity grid are
other serious problems.
Water energy production has been expanded, but large
quantities of petroleum products are still being imported to
meet energy needs. However, wood, peat and charcoal are the
most important energy sources for a large part of the
population. Under the Kivus Lake on the border with Congo
(Kinshasa), there is one of the world's largest natural gas
reserves, estimated to contain 57 billion m 3,
half of which is in Rwanda. The reserve will be developed
with support from the World Bank, but the project has been
Rwanda is little industrialized. The industry that exists
is mainly agricultural-based and processes coffee, tea sugar
cane and tobacco. Rwanda's most important mineral resource
is tinstone, and exports of tin concentrate account for a
large part of export revenue.
Agriculture, which is mainly self-sustaining agriculture,
employs 90 percent of the labor force. The most important
crops are flour bananas, sweet potatoes, potatoes, cassava,
beans, sorghum, rice, maize and peas. To meet the needs,
Rwanda must import large quantities of food.
In recent years, efforts have been made to develop forage
agriculture, including grubbing and re-colonization of
neglected valleys for commercial cultivation of sugar cane
and rice. Investment in the cultivation of cut flowers for
export has also been implemented.
The most important export crops are coffee and tea.
Livestock management, traditionally central to the Tutsis,
was severely affected during the 1994 genocide but has
recovered in the 2000s and exports of hides contribute to
the country's income. Intensive cultivation and
deforestation have led to depletion of the soil and erosion
in many places.
Rwanda has a strong current account deficit. Unstable
world market prices for the most important export products
coffee and tea (50-70 per cent of the country's export
revenue) and a large energy import are the main causes of
the deficit. The main importing countries are China, Uganda
and India, the main exporting countries are the United Arab
Emirates, Kenya, Switzerland.