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

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Rwanda registered a good economic performance over the last years, and thanks to investments in education and infrastructure, it reached the Millennium development goals. In 2021, the economy started to show signs of recovery from the recession brought on by the COVID-19 pandemic, with GDP growing 5.1%, thanks to the service sector and the measures taken to fight back the coronavirus. Growth is expected to continue in 2022 and 2023, when GDP should grow by 7% and 8.1%, respectively.

In 2021, activity recovered strongly from the recession brought on by the pandemic. Inflation significantly reduced to 2.4%, but it is expected to increase to 4.9% in 2022 and 5.8% in 2023. The debt-to-GDP ratio increased to 74.8% in 2021, and it is expected to continue to rise in the coming years, reaching 78.2% in 2022 and 80.9% in 2023. However, the overall deficit should remain stable at 1.35% in 2022 and 1.34% in 2023, against 1.4% in 2021. With over 70% of the population employed in agriculture, household incomes are expected to continue to benefit from the favourable prices of export crops in 2022, which should result in higher household expenditure. In 2021, the government continued implementing a series of fiscal measures put in place to overcome the challenges related to the COVID-19 crisis, which have been effective. Furthermore, the public investment, through the national strategic transformation plan (NST), targeted infrastructures related to trade such as the construction of the airport of Bugesera, to help the restart of the economy. The NST focuses on economic, social and governance transformation, according to the aspirations of the plan Vision 2050. As part of the latter, the government is developing new medium-term development strategies aimed at turning the country in a country with intermediate high income status before 2035, while the “Made in Rwanda” program aims to promote local production in order to reduce imports.

Despite the progress made, Rwanda remains a very poor country, where around 40% of the population lives below the national poverty line. In 2021, the unemployment rate in the country was at 23.5%, according to the government's Labour Force Survey. Unemployment in Rwanda is much higher among women (26.7%) then men (19.9%).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 10.3610.3310.4011.0411.94
GDP (Constant Prices, Annual % Change) 9.5e-3.4e5.17.08.1
GDP per Capita (USD) 835e816e802833881
General Government Gross Debt (in % of GDP) 50.260.174.878.280.9
Inflation Rate (%) 2.47.7e0.88.07.0
Current Account (billions USD) -1.25e-1.27e-1.40-1.35-1.34
Current Account (in % of GDP) -12.1-12.2-13.4-12.2-11.2

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Main Sectors of Industry

The Rwandan economy depends on subsistence economy, tea and coffee exports, and tourism. The mining sector is also a pillar of the economy: the country is one of the largest producers of tantalum, used, among other things, in the construction of mobile phones. Agriculture is the main economic activity of the Rwandan people, directly providing employment for 62.2% of the total population (World Bank). The sector accounts for 26.2% of GDP and accounts for around 80% of foreign income from exports of coffee, tea, hides and skins, horticulture and pyrethrum (chrysanthemum-based insecticide). About 61% of the Rwandan soil is suitable for agriculture because the soils are fertile, but food production often does not meet demand, requiring imports. Although the inital stages of the pandemic had adverse effects on the performance of the Rwandan agriculture sector, agriculture showed a steady recovery in 2021.

The industrial sector is strongly linked to the processing of primary agricultural products. It represents 19.3% of GDP and 8.6% of employment. It is estimated that almost 70% of industries in Rwanda are located in Kigali, with little activity in the urban centers of the hinterland. The government is committed to gradually privatizing the productive sector and promoting the development of the private sector.

The tertiary sector contributes around 46.4% of GDP and employs 29% of the total workforce. According to the government's "Vision 2020" plan, services could become the main driver of the Rwandan economy. The financial sector is made up of seven commercial banks and one development bank; the “Financial Sector Development Program” aims to deepen financial services and increase their reach among Rwandan citizens. In addition, Rwanda seeks to support the growth of the tourism industry and to become a regional leader in information and communication technologies. Tourism has become an important source of foreign exchange (around USD 300 million), in particular thanks to the increase in the number of international conferences, and should continue to grow thanks to significant investments in infrastructure, such as the construction project of Bugesera Airport. The expansion of RwandAir, the national airline, with the opening of new routes, should accompany the development of the sector. Nevertheless, the COVID-19 pandemic has greatly impeded these dynamics, with travel and hospitality services being hit the hardest. However, as restrictions lifted and vaccination rates rose, the services sector as a whole began to show signs of recovery.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 62.3 8.6 29.1
Value Added (in % of GDP) 26.3 19.3 46.4
Value Added (Annual % Change) 0.9 -4.2 -5.5

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
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.

 
 

Find out all the exchange rates daily on our service Currency Converter.

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.

 

Return to top

Foreign Trade in Figures

Rwanda's economic policy is open to foreign trade which accounts for 54.3% of the GDP (World Bank, 2020). In addition to benefiting from the U.S.-Rwanda Bilateral Investment Treaty (BIT), which entered into force in 2012, 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 (7.3% on average) and non-tariff barriers are virtually non-existent.

Rwanda mainly exports gold (26.1%), petroleum oils (12.9%), tea (7.4%), coffee (6.4%), and niobium, tantalum, vanadium or zirconium ores and concentrates (3.9%). The country's imports are led by petroleum oils (15.2%), gold (7.6%), electrical apparatus for line telephony (3%), medicaments (2.6%), and cane or beet sugar (2.4%). Rwanda’s leading export detonations are the neighbouring Democratic Republic of Congo (32.1%), the UAE (29.6%), Uganda (5.3%), Switzerland (4.6%), and Pakistan (3.4%); with imports come chiefly from China (19.9%), followed by India (8.8%), Kenya (8.7%), Tanzania (8.4%), and the United States (7.6%) .

Due to its strong growth and demand for manufactured goods, Rwanda has a structural trade deficit. In 2020, the country exported USD 1.4 billion worth of goods, while it imported USD 2.5 billion, resulting in a trade deficit of USD 1.1 billion. When accounting for services, the country's trade deficit reached USD 1.3 billion, as exports as services totalled USD 295 million and imports amounted to USD 543 million.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 2,2932,3232,4642,6592,542
Exports of Goods (million USD) 7441,0501,1221,2411,408
Imports of Services (million USD) 1,062904936910543
Exports of Services (million USD) 851729648747295
Imports of Goods and Services (Annual % Change) 7.65.88.118.0-3.4
Exports of Goods and Services (Annual % Change) 12.943.310.319.9-9.2
Imports of Goods and Services (in % of GDP) 34.133.134.736.135.3
Exports of Goods and Services (in % of GDP) 15.420.521.121.819.0
Trade Balance (million USD) -1,294-974-1,155-1,473n/a
Trade Balance (Including Service) (million USD) -1,540-1,167-1,298-1,490n/a
Foreign Trade (in % of GDP) 49.553.755.857.954.3

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

 

Main Partner Countries

Main Customers
(% of Exports)
2019
Democratic Republic of Congo 32.1%
United Arab Emirates 29.6%
Uganda 5.3%
Switzerland 4.6%
Pakistan 3.4%
See More Countries 25.0%
Main Suppliers
(% of Imports)
2019
China 19.9%
India 8.8%
Kenya 8.7%
Tanzania 8.4%
United Arab Emirates 7.6%
See More Countries 46.5%

Source: Comtrade, Latest Available Data

 
 

Main Products

1.2 bn USD of products exported in 2019
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 26.1%
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 12.9%
Tea, whether or not flavouredTea, whether or not flavoured 7.4%
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 6.4%
Niobium, tantalum, vanadium or zirconium ores and...Niobium, tantalum, vanadium or zirconium ores and concentrates 3.9%
See More Products 43.2%
3.2 bn USD of products imported in 2019
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 15.2%
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 7.6%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 3.0%
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) 2.6%
Cane or beet sugar and chemically pure sucrose, in...Cane or beet sugar and chemically pure sucrose, in solid form 2.4%
See More Products 69.3%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 

Return to top

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: 2024
Parliamentary: 2023
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
- Social Party Imberakuri (social-democratic)
- Democratic Green Party (green-liberal)
Type of State
Rwanda is a democratic republic.
Executive Power
Prime Minister and the Council of Ministers, with which he exercises the executive power. The President is elected for a seven-year term by popular vote, and appoints the Prime Minister and all other members of Cabinet. The President of Rwanda is the head of state, and the Prime Minister is the head of government.
Legislative Power
Legislative power in Rwanda vests in Parliament which consists of two chambers: Chamber of Deputies, whose members are elected every 5 years; and the Senate, whose members are elected or appointed for a mandate of 8 years (art. 64 of the Rwandan Constitution).
 

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

Source: World Press Freedom Index, Reporters Without Borders

 

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

 

Return to top

COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the evolution of the COVID19 pandemic and the most up-to-date statistics on the COVID19 disease in Rwanda, please visit the Rwandan government platform, containing the official data. The platform provides a daily epidemiological update, which includes key national figures.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Rwanda and the current sanitary measures in force, please consult the Rwandan government platform including updated information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For information on all the measures applicable to the movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including possible import and export restrictions, if applicable), please consult the portal of the Rwandan Directorate-General for Customs and Indirect Duties.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Rwanda on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For information on the Rwandan economic emergency plan is available here.
For an overview of the main economic policy measures (fiscal, monetary and macroeconomic) taken by the Rwandan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Rwanda in the IMF’s Policy Tracker platform.
Support plan for businesses
Information on the local business support programme established by the Rwandan government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity is available here.
For a general overview of international SME support policy responses to the COVID-19 outbreak, please refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
Information on the support plan for exporters put in place by the Rwandan government is available here.
 

Any Comment About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Latest Update: July 2022