Rwanda Economic Indicators

National or Regional Currency: Rwanda Franc, RWF
Year of data: 2010
Number of Indicators Listed: 27
Date of Last Update: 14 February 2011
Natural Resources: gold, cassiterite (tin ore), wolframite (tungsten ore), methane, hydropower, arable land
Capital: name: Kigali
Data Sources: IMF, World Bank, UN, OECD, CIA World Factbook

General
Rwanda is a poor rural nation with approximately 90 per cent of the general populace engaged in (mainly subsistence) Agriculture, fisheries and farming. It is the most densely populated nation in Africa and is landlocked with few natural resources and minimal industry. Primary foreign currency exchange earners are coffee and tea. The 1994 genocide decimated Rwanda’s fragile economic base, severely impoverished the general populace, in particular women, and eroded the country’s ability to attract private and external investment. However, Rwanda has made substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels, although poverty levels are higher now. Gross Domestic Product (GDP) has rebounded and inflation rates has been curbed. Despite Rwanda’s fertile ecosystem, food stuffs production often does not keep pace with general populace growth, requiring food stuffs imports. Rwanda perpetuates to receive substantial aid money and obtained International Monetary Fund (IMF)-World Bank (WB) Heavily Inpublic debted Poor nation(HIPC) initiative public debt relief in 2005-06. Rwanda also received Millennium Challenge Account Threshold status in 2006. The government has embraced an expansionary financial policy to reduction of poverty by improving education, infrastructure and facilities, and foreign and domestic investment and pursuing market-oriented reform, although energy shortages, instability in neighbouring states, and lack of adequate transportation linkages to other countries perpetuate to handicap growth.

Rwanda Economy
Rwanda is a land locked eastern African nation in the Great Lakes region. It shares international borders with Uganda, Tanzania, Burundi and the Democratic Republic of Congo. Despite lying on the equatorial belt, the country enjoys a cool climate due to the presence of lower mountains and a huge forest region. The country is home to abundant wildlife. Mountain gorillas are one of the most sought after endangered species found in the region. Wildlife tourism has become a significant addition to Rwanda’s economy. The country has a population of above 10 million, based the on 2009 estimates, with almost 60% of the people living below the international poverty line.
Rwanda Economy: Introduction
Rwanda’s economy primarily depends on agricultural productivity. Almost 90% of the population thrives on farming and livestock rearing. Unlike other African nations, Rwanda does not have mineral deposits or measurable natural resources. The industry and service sectors are not entirely developed to push the economy towards higher growth.
The Rwandan economic profile suffered a serious setback during the 1994 genocide. According to the official data, the death toll exceeds one million (approximately), which is almost 20% of the population. The genocide resulted in the destruction of the emerging industrial sector. It caused widespread unemployment and population displacement. It also hampered the efforts towards attracting foreign investment. In the early 2000s, the economy began to revive. According to the 2009 figures, Rwanda has an annual GDP (purchasing power parity) of US$10.39 billion.

Rwanda Economy: Statistical Snapshot
Here are some of the key statistics regarding Rwanda’s economy:
Labor force 4.446 million (2007)
Labor in agriculture 90%
Budget revenues $1.261 billion
Budget expenditures $1.391 billion
Industrial production growth rate 7% (2009 est.)
Current account balance -$208 million (2009 est.)
Exports $213 million (2009 est.)
Imports $786 million (2009 est.)
Foreign exchange reserve $619 million (December 2009 est.)
Exchange rate 568.75 Rwandan Francs per US Dollar

Rwanda’s economy receives substantial monetary aid through the HIPC (heavily-indebted poor countries) initiative sponsored by the IMF and World Bank. The government has structured reformative fiscal policies to end poverty and unemployment. The country is also making significant efforts to leverage trade within the East African region.

Rwanda Trade, Exports and Imports
Rwanda is predominantly a country of rural farmers, with few natural resources. About 90% of the population is engaged in agriculture and the remainder in the service sector. Tea and coffee are the main export commodities of Rwanda trade. Since 2001, growth has been driven by exports to the tune of 5% in the last five years.

Rwanda Trade: Exports
Despite the setback caused by the 1994 genocide, Rwanda has spared no efforts to bring its economy back on track. The signing of an Enhanced Structural Adjustment Facility with the International Monetary Fund (IMF) in 1998 saw the beginning of privatization, with support from the World Bank. Rwanda’s exports include:
• Tea
• Coffee
• Coltan
• Cassiterite
• Iron ore
• Tin
• Animal hides

Currently, Rwanda’s road to recovery and robustness are largely dependent on the financial fate of tea and coffee prices in the international market. In 2000, coffee production stood at 14,578,560 tons and in 2002, tea became the largest export item at 15,000 tons, translating into revenues of US$18 million. Animal hide and tin ore are Rwanda’s other export goods. Most of Rwanda’s exports go to China (9.1%), Germany (7.3%), the US (4.5%), Thailand (8.6%) and Belgium (4.1%). The total revenues generated by exports in Rwanda’s economy are around US$213 million (2009 est.).

Rwanda Trade: Imports
Rwanda’s trade imports are far larger than its exports and are in the region of $786 million (2009 est.). The main countries that goods are imported from include Kenya (15%), Uganda (13.1%), China (6.2%), Belgium (5.2%), and Germany (4.5%). France and Israel are also countries that Rwanda imports from. The main imports are:
• Machinery and equipment
• Steel
• Cement and construction material
• Petroleum products
• Foodstuffs

The US is an important exporter to Rwanda, accounting for almost $10 million in imports annually since 1990-93, and over $40 million in 1994 and 1995. In 2007, the amount rose to approximately $17 million, a 20% increase over the 2006 level. Being a member of the Common Market for Eastern and Southern Africa (COMESA) and the East African Community, roughly 90% of Rwanda’s imports come from COMESA countries and 34% from other African countries.

Rwanda Economic Forecast
Rwanda is a poor rural country and of all countries in Africa, it is the most densely populated. Because of few natural resources, and minimal industry opportunities, people struggle. While this country’s economy was already weak, in 1994 genocide added to the pressures of impoverishment, specifically the female population. Because of this, private and external investments were nearly impossible to attract.
Although Rwanda’s poverty level is still bad, the Gross Domestic Product or GDP has seen some recovery. A huge challenge although Rwanda has a fertile ecosystem, foods production cannot keep up with consumer demand. To get the country back on track, the government has received a significant amount of assistance from the International Monetary Fund and World Bank in 2005. Then in 2006, additional aid was received from the Millennium Challenge Account as a means of lowering the poverty level through better facilities, infrastructure, domestic investment, and education. The country still needs market reform primarily due to energy shortages along with low food production.

Rwanda GDP Forecast
Although the people of Rwanda depend on income from fisheries and farming, agriculture accounts for approximately 90% of jobs. Today, government officials are working hard to improve the industry and services sectors although solutions are long-term. As far as the Rwanda GDP (Gross Domestic Product, Current Prices, US Dollars), experts look at historical data, as well as values that are based on the GDP in national currency and projections for exchange rates. In looking at the GDP from 2008, numbers closed at $4.69 billion in US dollars. Then for the next 12 months, a small increase of 11.76% was experienced that closed 2009’s GDP out at $5.245 billion and placed the country in the number 139 slot for world rankings. Regarding the future of Rwanda specific to GDP, forecasts for 2010 are at $5.69 billion, followed by a larger change for 2015 taking numbers to $8.583 billion in US dollars.
Rwanda Unemployment Forecast

Now, when looking at the Rwanda population, this country is home to almost 10 million people. Of these, some 90% work in the agriculture sector but even so, approximately 60% of the country’s population still lives below the poverty line. Although Rwanda has experienced a struggling economy for some time, when genocide hit in 1994, the country was devastated even more, virtually destroying the industry sector. When this occurred, the already high unemployment rate worsened and almost 20% of Rwanda’s population was killed. All of this coupled with the AIDS epidemic, the country has suffered. Although, the Rwanda unemployment rate for 2010 has not been published, we know that in 2000, it was 14% and considering that only 4.5 million people are reportedly employed, we can assume the rate has increased.

Rwanda Inflation Rate Forecast
Regarding the Rwanda inflation rate, instead of using end-of-period data, forecasters and economists use data based on averages for the given year using an index of 2000=100. By the end of 2008, the inflation rate was reported at 15.44% but with a 32.63% reduction seen, 2009 ended at 10.4%. With this, Rwanda was ranked worldwide at number 25. For the future, experts speculate that 2010 will have an inflation rate of 6.40% and for 2015, slightly lower at 5.00%.

Rwanda Current Account Balance Forecast
To determine the Rwanda current account balance, forecasters use virtually all transactions for classifications of goods, services, income, and current transfers with the exception of capital and financial items. The year 2008 had an account balance of minus $0.23 billion in US dollars. Following, a moderate increase of 65.22% was seen, closing 2009 at minus $0.38 billion and putting the year at number 97 for world rankings. Regarding 2010 and 2015, forecasters are predicting the current account balance will be a negative $0.41 billion and negative $0.442 billion in US dollars, respectively.

Source: www.economywatch.com


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