Rwanda’s economy suffered heavily during the 1994 genocide, with widespread loss of life, failure to maintain infrastructure, looting, and neglect of important cash crops. This caused a large drop in GDP and destroyed the country’s ability to attract private and external investment. The economy has since strengthened, with per-capita GDP (PPP) estimated at $2,090 in 2017, compared with $416 in 1994. Major export markets include China, Germany, and the United States.
The economy is managed by the central National Bank of Rwanda and the currency is the Rwandan franc; in August 2015, the exchange rate was 755 francs to the United States dollar. Rwanda joined the East African Community in 2007, and has ratified a plan for monetary union amongst the five member nations, which could eventually lead to a common East African shilling.
Rwanda is a country of few natural resources, and the economy is based mostly on subsistence agriculture by local farmers using simple tools. An estimated 90% of the working population farms, and agriculture constituted an estimated 32.5% of GDP in 2014. Farming techniques are basic, with small plots of land and steep slopes.
Since the mid-1980s, farm sizes and food production have been decreasing, due in part to the resettlement of displaced people. Despite Rwanda’s fertile ecosystem, food production often does not keep pace with population growth, and food imports are required.
Subsistence crops grown in the country include matoke (green bananas), which occupy more than a third of the country’s farmland, potatoes, beans, sweet potatoes, cassava, wheat and maize. Coffee and tea are the major cash crops for export, with the high altitudes, steep slopes and volcanic soils providing favourable conditions.
Reports have established that more than 400,000 Rwandans make their living from coffee plantation. Reliance on agricultural exports makes Rwanda vulnerable to shifts in their prices. Animals raised in Rwanda include cows, goats, sheep, pigs, chicken, and rabbits, with geographical variation in the numbers of each.
Production systems are mostly traditional, although there are a few intensive dairy farms around Kigali. Shortages of land and water, insufficient and poor-quality feed, and regular disease epidemics with insufficient veterinary services are major constraints that restrict output. Fishing takes place on the country’s lakes, but stocks are very depleted, and live fish are being imported in an attempt to revive the industry.
The industrial sector is small, contributing 14.8% of GDP in 2014. Products manufactured include cement, agricultural products, small-scale beverages, soap, furniture, shoes, plastic goods, textiles and cigarettes.
Rwanda’s mining industry is an important contributor, generating US$93 million in 2008. Minerals mined include cassiterite, wolframite, gold, and coltan, which is used in the manufacture of electronic and communication devices such as mobile phones.
