Small and landlocked, Rwanda is hilly and fertile with a densely packed population of about 11.9 million people (2016). It borders the far larger and richer Democratic Republic of Congo, as well as its closest East African neighbors, Tanzania, Uganda, and Burundi. With the support of the International Monetary Fund (IMF) and World Bank, Rwanda has been able to make important economic and structural reforms, and sustain its economic growth rates over the last decade.
Rwanda has guarded its political stability since the genocide in 1994. Parliamentary elections in September 2013 saw women fill 64% of the seats, and the Rwandan Patriotic Front maintain an absolute majority in the Chamber of Deputies. An amendment to the constitution in December 2015 paved the way for the re-election of President Paul Kagame in August 2017 to third 7-year term in office.
Rwanda’s long-term development goals are defined in “Vision 2020,” a strategy that seeks to transform the country from a low-income, agriculture-based economy to a knowledge-based, service-oriented economy with middle-income country status by 2020. In order to achieve this, the Government of Rwanda has come up with a medium-term strategy: The second Economic Development and Poverty Reduction Strategy (EDPRS 2) outlines its overarching goal of growth acceleration and poverty reduction through four thematic areas: economic transformation, rural development, productivity and youth employment, and accountable governance. The EDPRS 2 aims to: raise gross domestic product (GDP) per capita to $1,000; reduce the percentage of the population living below the poverty line to less than 30%; and reduce the percentage of the population living in extreme poverty to less than 9%.These goals build on remarkable development successes over the last decade that include high growth, rapid poverty
Going forward, the private sector will have to play a bigger role in ensuring economic growth. Poor infrastructure and a lack of access to electricity are some of the major constraints to private investment. Investment relies heavily on foreign aid, with stable inflows critical to keep the current investment rate high at about 25% of GDP. Reducing the country’s dependency on foreign aid through domestic resource mobilization and promoting domestic savings is viewed as critical.
Rwanda met most of the Millennium Development Goals (MDGs) by the end of 2015. Strong economic growth was accompanied by substantial improvements in living standards, with a two-thirds drop in child mortality and near-universal primary school enrolment. A strong focus on homegrown policies and initiatives has contributed to significant improvement in access to services and human development indicators. The poverty rate dropped from 44% in 2011 to 39% in 2014, while inequality measured by the Gini coefficient fell from 0.49 to 0.45.
Last Updated: Nov 06, 2017