Economic and Political Overview

flag Rwanda Rwanda: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Rwanda registered a good economic performance over the last years, and thanks to investments in education and infrastructure, it reached the Millennium development goals, although macroeconomic imbalances have intensified. Throughout the late-1990s and sustained by reforms and ongoing donor assistance, growth gained momentum. It remained consistent, averaging 8.5% annually from 1995 to 2022. Significant enhancements in living standards ensued. However, after a robust rebound from the pandemic, real GDP expansion slowed to 6.2% in 2023. This deceleration was attributed to a widespread moderation across the services and manufacturing industries, alongside adverse weather conditions adversely affecting the agriculture sector. Despite the acceleration of post-disaster reconstruction spending and the recovery in the agricultural sector, real GDP growth is anticipated to moderate in the short term. This projection is based on expected policy measures aimed at supporting external balance and price stability. According to the IMF, growth is forecasted to reach 7% both this year and in 2025.

In FY22/23, the fiscal deficit stood at 7.3% of GDP. Projections indicate that the current account deficit will expand to 11.5% of GDP in 2023 and further to 11.8% of GDP in 2024. This widening is attributed to factors such as increased food imports, efforts for post-flood reconstruction, and the extensive airport construction project. Nevertheless, a steady enhancement in the current account is anticipated over the medium-term. This improvement will be bolstered by higher domestic savings resulting from policy adjustments (IMF). The debt-to-GDP ratio was estimated at 63.3% in 2023, with an upward trajectory expected over the forecast horizon (73.7% by 2025, IMF). Inflation was high in 2023 (14.5%), but should decrease to 6% this year and around 5% in 2025 (IMF).

According to the IMF, as of August 2023, the unemployment rate persisted at a high 18%, surpassing pre-pandemic levels. Particularly elevated rates were observed among females and the youth, standing at 21.9% and 21%, respectively. The disparity between male and female unemployment rates can be partially attributed to the limited employment prospects for women during periods of sluggish agricultural activity. Rwanda as a low GDP per capita, estimated at USD 2,793 in 2022 by the World Bank (PPP).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 13.3113.9313.8314.2515.29
GDP (Constant Prices, Annual % Change) 8.26.27.07.07.3
GDP per Capita (USD) 1,0051,0329981,0061,057
General Government Gross Debt (in % of GDP) 61.163.372.173.772.2
Inflation Rate (%) n/a14.56.05.05.0
Current Account (billions USD) -1.31-1.77-1.56-1.50-1.51
Current Account (in % of GDP) -9.8-12.7-11.3-10.5-9.9

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

The Rwandan economy relies on a subsistence economy, exports of tea and coffee, and tourism. The mining sector is also a significant contributor to the economy, with the country being one of the largest producers of tantalum, a crucial material used in mobile phone construction. Agriculture serves as the primary economic activity for Rwandans, directly employing 56% of the total population (World Bank). This sector constitutes 24.9% of GDP and contributes roughly 80% of foreign income from exports such as coffee, tea, hides and skins, horticulture, and pyrethrum (a chrysanthemum-based insecticide). Approximately 61% of Rwanda's soil is suitable for agriculture due to its fertile soils. However, food production often falls short of demand, necessitating imports. In 2023, aggregate cereal production was officially estimated at 847,000 tonnes, about 10% above the last five-year average, benefiting from favorable weather conditions (FAO).

The industrial sector in Rwanda is closely tied to the processing of primary agricultural products and represents 21.2% of GDP and 14% of employment. Nearly 70% of industries are concentrated in Kigali, with minimal activity in urban centers in the hinterland. The government is committed to gradually privatizing the productive sector and fostering the development of the private sector. Rwanda's manufacturing industry is modest yet expanding, witnessing a transition from basic production to more value-added activities across various sub-sectors. These include fast-moving consumer goods like detergents, body care products, plastics, as well as construction materials such as cement and steel bars. Additionally, there's a growing presence in furniture, laboratory equipment, electronic products, and automotive assembly, including phones, computers, and vehicles. Overall, the World Bank estimates the manufacturing sector to contribute 10% of GDP.

The tertiary sector accounts for approximately 46.5% of GDP and employs 30% of the total workforce. Rwanda's banking sector consists of 15 commercial banks, microfinance banks, development banks, and cooperative banks, with total assets worth RWF 6,485 billion as of June 2023 (data Rwanda Bankers' Association). Additionally, Rwanda aims to bolster the growth of its tourism industry and position itself as a regional leader in information and communication technologies. Tourism has emerged as a significant source of foreign exchange, driven in part by the rise in international conferences, and is expected to continue growing due to substantial investments in infrastructure.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 54.7 18.7 26.7
Value Added (in % of GDP) 24.9 21.2 46.5
Value Added (Annual % Change) 1.6 5.0 12.2

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Rwandan Franc (RWF) - Average Annual Exchange Rate For 1 MUR 22.1724.1225.3825.3423.97

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
68,3/100
World Rank:
47
Regional Rank:
2

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Rwanda's economic policy is open to foreign trade which accounts for 61% of the GDP (World Bank, latest data available). In addition to benefiting from the U.S.-Rwanda Bilateral Investment Treaty (BIT), Rwanda is a member of the East African Community (EAC) - one of the most dynamic regional communities in Africa - the Common Markets of Eastern & Southern Africa (COMESA) and the WTO. Custom duties are relatively low in the country and non-tariff barriers are virtually non-existent. Rwanda mainly exports food and live animals (22.8%, mostly tea and coffee), crude materials, inedible, except fuels (13.4%), manufactured goods classified chiefly by material (6.7%); whereas imports are led by machinery and transport equipment (18.7%), food and live animals (17.1%), other commodities & transactions, n.e.s (15.1%), manufactured goods classified chiefly by material (14.3%), mineral fuels, lubricants and related materials (11.0% - data National Institute of Statistics Rwanda, 2023).

Rwanda main export partners in 2023 were the United Arab Emirates (56.8%), the DRC (10.4%), China (5%), Hong Kong (2.6%), and the U.S. (1.1%). On the other hand, imports came chiefly from China (18.7%), Tanzania (13.6%), India (10.5%), the United Arab Emirates (5.4%), and South Africa (2.7% - data National Institute of Statistics Rwanda).

Due to its strong growth and demand for manufactured goods, Rwanda has a structural trade deficit. In 2022, the country exported USD 2.1 billion worth of goods, while it imported USD 3.5 billion (WTO). Concerning services, exports stood at USD 883 million against USD 878 million in imports. According to the World Bank, the country’s trade deficit stood at around 16.2% of its GDP in 2022 (from 15.6% one year earlier). Preliminary figures from the National Institute of Statistics show that, in 2023, the country exported USD 2.9 billion worth of goods, while imports totalled USD 9.4 billion.

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 2,4642,6592,5422,8953,569
Exports of Goods (million USD) 1,1221,2411,4081,5312,111
Imports of Services (million USD) 1,0571,033520666878
Exports of Services (million USD) 9141,015521579883
Imports of Goods and Services (Annual % Change) 8.118.1-3.43.616.1
Exports of Goods and Services (Annual % Change) 10.219.9-9.22.930.1
Imports of Goods and Services (in % of GDP) 34.736.235.935.237.9
Exports of Goods and Services (in % of GDP) 21.121.819.319.522.5
Trade Balance (million USD) -1,155-1,465-1,650-1,659-1,990
Trade Balance (Including Service) (million USD) -1,298-1,482-1,649-1,746-1,985
Foreign Trade (in % of GDP) 55.858.055.254.760.4

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2018
Democratic Republic of Congo 33.6%
Switzerland 8.8%
Hong Kong SAR, China 6.9%
United Arab Emirates 4.6%
United Kingdom 4.4%
See More Countries 41.7%
Main Suppliers
(% of Imports)
2018
China 18.4%
India 10.2%
United Arab Emirates 9.8%
Uganda 8.5%
Kenya 6.2%
See More Countries 46.9%

Source: Comtrade, Latest Available Data

 
 

Main Products

1.0 bn USD of products exported in 2018
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 13.1%
Tea, whether or not flavouredTea, whether or not flavoured 9.0%
Coffee, whether or not roasted or decaffeinated;...Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion 8.2%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 7.3%
Precious stones and semi-precious stones, whether...Precious stones and semi-precious stones, whether or not worked or graded, but not strung, mounted or set, ungraded precious stones and semi-precious stones, temporarily strung for convenience of transport (excl. diamonds and imitation precious stones and semi-precious stones) 7.1%
See More Products 55.2%
2.8 bn USD of products imported in 2018
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 18.4%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 4.8%
RiceRice 2.5%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.3%
Wheat and meslinWheat and meslin 2.1%
See More Products 69.9%

Source: Comtrade, Latest Available Data

 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Official list of ministries
Ministry of Finance and Economic Planning
Ministry of Agriculture and Animal Ressources
Ministry of Foreign Affairs and International Cooperation
Ministry of Trade and Industry
Ministry of Infrastructure
Statistical Office
National Institute of Statistics Rwanda
Central Bank
National Bank of Rwanda
Stock Exchange
RSE - Rwanda Stock Exchange Limited
Search Engines
Google Rwanda
Economic Portals
Fortune of Africa Rwanda
Financial Times Rwanda
The New Times

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Political Outline

Current Political Leaders
President: Paul Kagame (since April 2000, re-elected in 2017) – RPF
Prime Minister: Édouard Ngirente (since 30 August 2017) - PSD
Next Election Dates
Presidential: 15 July 2024
Senate: 2027
Chamber of Deputies: 15 July 2024
Main Political Parties
Rwanda is a one-party dominant state with the RPF (Rwandan Patriotic Front – a Tutsi nationalist and populist party which overthrew the Hutu-led government in Rwanda) in power. Opposition parties are allowed, but are widely considered to have no real chance of gaining power. Some of the other important political parties are:
- Social Democratic Party: centre-left
- Liberal Party: centre, liberalism
- Social Party Imberakuri: social-democratic
- Democratic Green Party: green-liberal
- Social Party Imberakuri: centre-left.
Type of State
Rwanda is a presidential republic.
Executive Power
The President of Rwanda is the head of state, and the Prime Minister is the head of government. The Prime Minister and the Council of Ministers exercise the executive power. The President is elected by popular vote for a seven-year term, which can be renewed indefinitely, and appoints the Prime Minister and all other members of the Cabinet.
Legislative Power
Legislative power in Rwanda vests in Parliament, which consists of two chambers: the Chamber of Deputies, whose 80 members are elected every 5 years; and the Senate, whose 26 members are elected or appointed for a mandate of 8 years (art. 64 of the Rwandan Constitution). Out of the 26 members of the Senate, 12 are elected by provincial councils, 8 are appointed by the President to ensure the representation of historically marginalised communities, 4 are appointed by the National Consultative Forum of Political Organisations, and 2 are elected by the staff of two universities (a public institution and a private one).
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
156/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
6/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of the Rwanda, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: April 2024