The President of Rwanda, Paul Kagame, has noted his ambition to make Rwanda the "Singapore of Africa". ==History== ===Before the civil war and genocide=== In the 1960s and 1970s, Rwanda's prudent financial policies, coupled with generous external aid and relatively favorable terms of trade, resulted in sustained growth in per capita income and low inflation rates.
The President of Rwanda, Paul Kagame, has noted his ambition to make Rwanda the "Singapore of Africa". ==History== ===Before the civil war and genocide=== In the 1960s and 1970s, Rwanda's prudent financial policies, coupled with generous external aid and relatively favorable terms of trade, resulted in sustained growth in per capita income and low inflation rates.
However, when world coffee prices fell sharply in the 1980s, growth became erratic. Compared to an annual GDP growth rate of 6.5% from 1973 to 1980, growth slowed to an average of 2.9% a year from 1980 through 1985 and was stagnant from 1986 to 1990.
However, when world coffee prices fell sharply in the 1980s, growth became erratic. Compared to an annual GDP growth rate of 6.5% from 1973 to 1980, growth slowed to an average of 2.9% a year from 1980 through 1985 and was stagnant from 1986 to 1990.
Minerals mined include cassiterite, wolframite, sapphires, gold, and coltan, which is used in the manufacture of electronic and communication devices such as mobile phones. Production of methane from Lake Kivu began in 1983, but to date has been used only by the Bralirwa Brewery. In 2019, the country was the 7th largest world producer of tungsten and the 12th largest world producer of tin.
However, when world coffee prices fell sharply in the 1980s, growth became erratic. Compared to an annual GDP growth rate of 6.5% from 1973 to 1980, growth slowed to an average of 2.9% a year from 1980 through 1985 and was stagnant from 1986 to 1990.
However, when world coffee prices fell sharply in the 1980s, growth became erratic. Compared to an annual GDP growth rate of 6.5% from 1973 to 1980, growth slowed to an average of 2.9% a year from 1980 through 1985 and was stagnant from 1986 to 1990.
The crash of coffee prices in 1989 caused a great decrease in purchasing power, and increased domestic tensions. Rwanda's economy suffered heavily during the 1994 Genocide, with widespread loss of life, failure to maintain the infrastructure, looting, and neglect of important cash crops.
However, when world coffee prices fell sharply in the 1980s, growth became erratic. Compared to an annual GDP growth rate of 6.5% from 1973 to 1980, growth slowed to an average of 2.9% a year from 1980 through 1985 and was stagnant from 1986 to 1990.
The crisis peaked in 1990 when the first measures of an IMF structural adjustment program were carried out.
An autonomous revenue authority also has begun operation, improving collections and accountability. Cassiterite production peaked at 1,000 tonnes in 1990, but was under 700 tonnes in 2000.
The largest union, CESTRAR, was created as an organ of the government but became fully independent with the political reforms introduced by the 1991 constitution.
This crisis particularly affected the educated elite, most of whom were employed in civil service or state-owned enterprises. During the 5 years of civil war that culminated in the 1994 genocide, GDP declined in 3 out of 5 years, posting a rapid decline at more than 40% in 1994, the year of the genocide.
The 9% increase in real GDP for 1995, the first postwar year, signalled the resurgence of economic activity. ===After the civil war and genocide=== The 1994 genocide destroyed Rwanda's fragile economic base, severely impoverished the population, particularly women, and eroded the country's ability to attract private and external investment.
The crash of coffee prices in 1989 caused a great decrease in purchasing power, and increased domestic tensions. Rwanda's economy suffered heavily during the 1994 Genocide, with widespread loss of life, failure to maintain the infrastructure, looting, and neglect of important cash crops.
The economy has since strengthened, with per-capita GDP (PPP) estimated at $2,225 in 2018, compared with $416 in 1994. Major export markets include China, Germany, and the United States.
The 9% increase in real GDP for 1995, the first postwar year, signalled the resurgence of economic activity. ===After the civil war and genocide=== The 1994 genocide destroyed Rwanda's fragile economic base, severely impoverished the population, particularly women, and eroded the country's ability to attract private and external investment.
Rwanda has also embarked upon an ambitious privatization program with the World Bank. In the immediate postwar period—mid-1994 through 1995—emergency humanitarian assistance of more than $307.4 million was largely directed to relief efforts in Rwanda and in the refugee camps in neighboring countries where Rwandans fled during the war.
Retail trade, devastated by the war, has revived quickly, with many new small businesses established by Rwandan returnees from Uganda, Burundi, and the Democratic Republic of the Congo. Industry received little external assistance from the end of the war through 1995.
In 1996, humanitarian relief aid began to shift to reconstruction and development assistance. The United States, Belgium, Germany, the Netherlands, France, the People's Republic of China, the World Bank, the UN Development Programme and the European Development Fund will continue to account for the substantial aid.
The government focused primarily on building up its manufacturing and service industries and eliminating barriers to trade and development. The Government of Rwanda posted a 13% GDP growth rate in 1996 through improved collection of tax revenues, accelerated privatization of state enterprises to stop the drain on government resources, and continued improvement in export crop and food production.
Beginning in 1996–97, the government has become increasingly active in helping the industrial sector to restore production through technical and financial assistance, including loan guarantees, economic liberalization, and the privatization of state-owned enterprises.
In June 1998, Rwanda signed an Enhanced Structural Adjustment Facility with the International Monetary Fund.
In early 1998, the government set up a one-stop investment promotion center and implemented a new investment code that created an enabling environment for foreign and local investors.
Recorded coltan production has soared from 147 tonnes in 1999 to 1,300 tonnes in 2001, and coltan was the country's biggest single export earner in 2001.
However, the road to recovery will be slow. Coffee production of 14,578,560 tons in 2000 compares to a pre-civil war variation between 35,000 and 40,000 tons .
An autonomous revenue authority also has begun operation, improving collections and accountability. Cassiterite production peaked at 1,000 tonnes in 1990, but was under 700 tonnes in 2000.
Recorded coltan production has soared from 147 tonnes in 1999 to 1,300 tonnes in 2001, and coltan was the country's biggest single export earner in 2001.
By 2002 tea became Rwanda's largest export, with export earnings from tea reaching US$18 million equating to 15,000 tons of dried tea.
Rwanda is also alleged to be trading in fraudulently exported gold and diamonds from the DRC. ===Current Economy and Economic Prospects=== The country entered a high period of economic growth in 2006, and the following year managed to register 8% economic growth, a record it has sustained since, turning it into one of the fastest-growing economies in Africa.
This sustained economic growth has succeeded in reducing poverty and also reducing fertility rates, with growth between 2006 and 2011 reducing the percentage of the country's population living in poverty from 57% to 45%.The country's infrastructure has also grown rapidly, with connections to electricity going from 91,000 in 2006 to 215,000 in 2011. Existing foreign investment is concentrated in commercial establishments, mining, tea, coffee, and tourism.
A "One Cow per Poor Family Programme" (Girinka), implemented in 2006, distributed 341,065 cows in 2018. 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. Rwanda's mining industry is an important contributor, generating US$93 million in 2008.
Rwanda joined the East African Community in 2007 and there were plans for a common East African shilling, which it had been hoped would be in place by 2015, but have not yet reached fruition (2020). Rwanda is a country of few natural resources, and the economy is based mostly on subsistence agriculture by local farmers using simple tools.
A "One Cow per Poor Family Programme" (Girinka), implemented in 2006, distributed 341,065 cows in 2018. 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. Rwanda's mining industry is an important contributor, generating US$93 million in 2008.
The economy is managed by the central National Bank of Rwanda and the currency is the Rwandan franc; in June 2010, the exchange rate was 588 francs to the United States dollar.
An estimated 90% of the working population farms, and agriculture comprised an estimated 42.0% of GDP in 2010.
The sector rebounded in 2010, becoming the country's largest sector by economic output and contributing 43.6% of the country's GDP.
This sustained economic growth has succeeded in reducing poverty and also reducing fertility rates, with growth between 2006 and 2011 reducing the percentage of the country's population living in poverty from 57% to 45%.The country's infrastructure has also grown rapidly, with connections to electricity going from 91,000 in 2006 to 215,000 in 2011. Existing foreign investment is concentrated in commercial establishments, mining, tea, coffee, and tourism.
Key tertiary contributors include banking and finance, wholesale and retail trade, hotels and restaurants, transport, storage, communication, insurance, real estate, business services and public administration including education and health. Tourism is one of the fastest-growing economic resources and became the country's leading foreign exchange earner in 2011.
In spite of the genocide's legacy, the country is increasingly perceived internationally as a safe destination; The Directorate of Immigration and Emigration recorded 405,801 people visiting the country between January and June 2011; 16% of these arrived from outside Africa.
Revenue from tourism was US$115,600,000 between January and June 2011; holidaymakers contributed 43% of this revenue, despite being only 9% of the numbers. Rwanda is one of only two countries in which mountain gorillas can be visited safely; gorilla tracking, in the Volcanoes National Park, attracts thousands of visitors per year, who are prepared to pay high prices for permits.
Rwanda is exploiting these natural resources through joint hydroelectric projects with Burundi and the Democratic Republic of the Congo. == Industry == The industrial sector is growing, contributing 16% of GDP in 2012. Rwanda's manufacturing sector is dominated by the production of import substitutes for internal consumption.
Rwanda joined the East African Community in 2007 and there were plans for a common East African shilling, which it had been hoped would be in place by 2015, but have not yet reached fruition (2020). Rwanda is a country of few natural resources, and the economy is based mostly on subsistence agriculture by local farmers using simple tools.
As security in Rwanda improves, the country's nascent tourism sector shows great potential to expand as a source of foreign exchange. In 2016, Rwanda was ranked 42nd and second best country in Africa to do business in the Mara Foundation-The Ashish J Thakkar Global Entrepreneurship Index report. However, a recent research in the UK-based political science journal, Review of African Political Economy, indicates that economic growth may be slower than what official figures suggest.
The economy has since strengthened, with per-capita GDP (PPP) estimated at $2,225 in 2018, compared with $416 in 1994. Major export markets include China, Germany, and the United States.
A "One Cow per Poor Family Programme" (Girinka), implemented in 2006, distributed 341,065 cows in 2018. 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. Rwanda's mining industry is an important contributor, generating US$93 million in 2008.
In 2019 agriculture accounted for 29% of the economy of Rwanda. Rwanda has long relied on coffee as a cash crop.
Minerals mined include cassiterite, wolframite, sapphires, gold, and coltan, which is used in the manufacture of electronic and communication devices such as mobile phones. Production of methane from Lake Kivu began in 1983, but to date has been used only by the Bralirwa Brewery. In 2019, the country was the 7th largest world producer of tungsten and the 12th largest world producer of tin.
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