Rwanda’s economy still may be small and predominantly agricultural, but in recent years, with political stability, it continues to grow steadily shifting to a supply economy. The major economic sectors have recorded remarkable progress and have improved internal resources to finance the budget.
Rwanda has put in place the Economic Development and Poverty Reduction Strategy (EDPRS 2008-2012) which provides a medium term framework for achieving the country’s long term development aspirations as embodied in Rwanda Vision 2020, the seven year Government of Rwanda (GoR) programme, and the Millennium Development Goals.
The major exports of Rwanda are coffee, tea, tin cassiterite, wolframite and pyrethrum. Coffee makes up more than 50% of the total export value, while the mountain grown tea is considered to be some of the finest in the world.
Recently, substantial private investments have been made in tourism and developing new industries such as cut flowers for export and fish farming. The full range of Rwanda’s resources have yet to be realized. Commercial fishing in Lake Kivu is in its infancy ; there are vast opportunities in the emerging tourism industry. The labour force is dedicated, energetic and eager for training.
The government, through the Rwanda Investment Promotion Agency (RIPA) is ready to work hand-in-hand with investors to realize their goals and drive the economy forward to a better future. Opportunities abound for long-term, well-capitalized investors with ideas, imagination and business skills for an emerging economy.
Main Actors
– Ministry of Finance and Economic Planning (MINECOFIN) : The Ministry was set up tp raise sustainable growth , economic opportunities , and living standards of all Rwandans and develop Rwanda into a Country Free of Poverty.
– Rwanda Revenue Authority : The agency was established November 1997 as a quasi-autonomous body charged with the task of assessing, collecting, and accounting for tax, customs and other specified revenues.
– Central Public Investments and External Finance Bureau (CEPEX) : The mission of CEPEX is to offer support services like program and project management, project implementation support, project monitoring and evaluation,supervision,and advisory services, including capacity building.
– Rwanda Investment and Export Promotion Agency/This is an agency under the Rwanda development Board, established in 1998 with a mission to increase investment and exports, through producing information materials, holding trade fairs at home and abroad and offering assistance to encourage and assist investors.
– Rwanda Bureau of Standards (RBS) : This is a public institution established to undertake all activities pertaining to the development of Standards, Quality assurance and Metrology in the country.
– Centre for the Support to Small and Medium-Sized Enterprises (CAPMER) under Rwanda development Board (RDB) is instrumental in the creation of a private, sustainable market for business development services in Rwanda, serving as a key information hub and brokerage for private BDS providers and SME owners and managers.
– Private Sector Federation (PSF) : The Federation is an umbrella organisation for the Rwandan private sector. Nine Chambers beneath the umbrella represent the main areas of the Rwandan private sector – Agriculture, Industry, Artists and Artisans, Commerce, Finance, the Liberal Professions, Tourism, Women Entrepreneurs and Young Entrepreneurs.
Since 1995, the Rwandan economy has been one of the fastest growing in Africa and indeed the world. Real annual GDP growth averaged 7,7% from 1998-2002, but slowed down to an estimated 3.5% in 2003. The main reason for the impressive growth rate in previous years is that the country had been steadily recovering from the steep economic decline of the years preceding 1995. From 1990 Rwanda was embroiled in a civil war that culminated in genocide in 1994 and a subsequent mass flight of refugees. The economic impact of these events was severe, and real annual GDP growth dropped to -10% in 1993, and -49% in 1994. Since coming to power in 1994, the government has restored security throughout the country and ensured the return of most subsistence farmers to their fields. In addition, and with considerable assistance from international donors, the government has rebuilt and in some cases expanded rural and urban infrastructure and has managed to contain currency depreciation and consumer price inflation. The government’s main economic challenge is to stimulate new sources of poverty-reducing growth. The government’s ambitious long-term plan is to transform Rwanda, which is one of the poorest and most rural countries in Africa , into an information and communications technology-based economy. In the short- to medium-term however, and largely as a result of the participatory process that generated Rwanda’s well-received Poverty Reduction Strategy Paper (completed in late 2002), the focus is on rural recapitalisation, and the boosting and diversification of agricultural production.
Priority Sectors
– Energy : Within the framework of the private sector development, the Rwandan Government wants to promote investment into : Methane gas energy (available reserve of 100 Mw) Generation of electricity Production of liquid gas, engine fuel, cooking gas Solar energy (insulation of nearly 5.15KWh/m²/day). Read more
– Tourism Rwanda is the untapped and exciting upcoming East African experience. Rwanda offers a one of a kind journey for any traveller. Rwanda is one of the safest locations in East Africa allowing tourists to safely walk through Rwanda’s capital city and neighbouring provinces. Read more
– ICT : The ICT sector in Rwanda has been growing steadily over the last ten years. The growth has been spurred by the governments’ vision 2020 which gives prime importance to the sector. In 2007, it was estimated that the total size of the ICT sector had surpassed the $50 million mark.
– Mining : In Vision 2020, the Government of Rwanda identified the Mining Sector as a priority sector that would enable the government to diversify its export base. Today, the Government is investing 12.5 billion of Rwandan francs in the sector for 2008-2010 in order to strengthen its regulation, avail new data to interested investors, support value addition to metallic ores and quarries, and into the sector consolidation and sensitisation program.
– Infrastructure : Rwanda is a landlocked country in the heart of Africa ; the nearest ports are Dar es Salaam being at 1.400km and Mombasa at 1.600km. Infrastructure in Rwanda, comprises of Road transport, which until now is the main form of passenger and goods transportation ; Air transport.
– Agribusiness : Agriculture is one of the six pillars of Rwanda’s Vision 2020, which aims at replacing subsistence farming with a fully monetized, commercial agricultural sector by 2020. Agriculture sector averaged 45% of the GDP in the past decade (1997-2007) and generates nearly 75% of the GDP in the past decade (1997-2007) and generates nearly 75% of the foreign exchange earnings.
Private Sector
In economics, the private sector is that part of the economy which is both run for private profit and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector ; private, non-profit organizations are regarded as part of the voluntary sector.
Private Sector Development (PSD) is a strategy for promoting economic growth and reducing poverty in developing countries by incorporating private industry and competitive markets into a country’s overall development framework.
The entrepreneurial spirit in Rwanda has been one of the key influences driving the economy and the private sector federation recognizes the hard work, perseverance and achievements of Rwandan entrepreneurs. This is epitomised in the setting up and good management of the Federation.
The Private Sector Federation is an umbrella organisation for the Rwandan private sector. Nine Chambers beneath the umbrella represent the main areas of the Rwandan private sector – Agriculture, Industry, Artists and Artisans, Commerce, Finance, the Liberal Professions, Tourism, Women Entrepreneurs and Young Entrepreneurs. They aim to go beyond advocacy to action, and are proactively involved in the socioeconomic transformation of Rwanda.