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Economy of Rwanda

The Rwandan economy is based on the largely rain-fed agricultural production of small, semi-subsistence, and increasingly fragmented farms. It has few natural resources to exploit and a small, uncompetitive industrial sector. While the production of coffee and tea is well suited to the small farms, steep slopes, and cool climates of Rwanda, the average family farm size is one-half hectare, unsuitable for most agro-business purposes. Agribusiness accounts for approximately 36.2% of Rwanda's GDP and 45% of exports. Minerals in 2009 accounted for 28% of export earnings, followed by tourism, tea and coffee, and pyrethrum (whose extract is used as a natural insecticide). Mountain gorillas and other niche eco-tourism venues are increasingly important sources of tourism revenue. Rwanda's tourism and hospitality sector requires continued investment. Rwanda is a member of the Commonwealth, the Common Market for Eastern and Southern Africa (COMESA), and the East African Community (EAC). Some 34% of Rwanda's imports originate in Africa, 90% from COMESA countries. The Government of Rwanda has sought to privatize several key firms. Since 2007, the telecom and mining sectors have been largely privatized, and the government has sold off several government-owned tea estates and made great strides in completing privatization of the banking sector. RECO, the utility monopoly, remains to be privatized, as do several other parastatals. During the 5 years of civil war that culminated in the 1994 genocide, GDP declined in 3 out of 5 years, posting a dramatic decline at more than 40% in 1994, the year of the genocide. The 9% increase in real GDP for 1995, the first postwar year, signaled the resurgence of economic activity and massive foreign aid inflows. 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. In 1996, humanitarian relief aid began to shift to reconstruction and development assistance. Since 1996, Rwanda has experienced steady economic recovery, thanks to government reforms and foreign aid (now over $500 million per year). Since 2002, the GDP growth rate ranged from 3%-11% per annum, and inflation ranged between 2%-9%. Rwanda depends on significant foreign imports (over $900 million per year). Exports have increased, up to $193 million in 2009. Private investment remains below expectations despite an open trade policy, a favorable investment climate, cheap and abundant labor, tax incentives to businesses, stable internal security, and crime rates that are comparatively low. Investment insurance also is available through the Africa Trade Insurance Agency, the Overseas Private Investment Corporation, and the World Bank's Multilateral Investment Guarantee Agency (MIGA). The weakness of exports and low domestic savings rates are threats to future growth. The global economic crisis has impacted Rwanda. However, while there was a decline in overall exports (28% between 2008 and 2009), remittances, and nongovernmental organization (NGO) transfers in 2009, the agricultural sector performed strongly, propelling Rwanda to a 4% growth in GDP, well above the sub-Saharan average growth for the year. Amidst obstacles, Rwanda appears committed to economic reform and private sector investment. In the World Bank's "Ease of Doing Business" report released in September 2009, Rwanda catapulted from number 143 to number 67; in the 2010 report, Rwanda improved its ranking to number 58. The Government of Rwanda remains dedicated to a strong and enduring economic climate for the country, focusing on poverty reduction, infrastructure development, privatization of government-owned assets, expansion of the export base, and trade liberalization. The implementation of a value added tax of 18% and improved tax collections are having a positive impact on government revenues and thereby on government services rendered. Banking reform and low corruption also are favorable current trends. Agricultural reforms, improved farming methods, and increased use of fertilizers are improving crop yields and national food supply. Moreover, the government is pursing educational and healthcare programs that bode well for the long-term quality of Rwanda's human resource skills base. Many challenges remain for Rwanda. The country is dependent on significant foreign aid. Exports continue to lag far behind imports and will continue to affect the health of the economy. The persistent lack of economic diversification beyond the production of tea, coffee, and minerals keeps the country vulnerable to market fluctuations. Perhaps the largest constraint on private sector development is the cost of electricity, which is currently among the highest in the world at about 24.6 cents per kilowatt hour. Given Rwanda's landlocked geography, strong highway infrastructure maintenance and good transport linkages to neighboring countries, especially Uganda and Tanzania, are critical. Transportation costs remain high and, therefore, burden import and export costs. Rwanda has no railway system for port access to Tanzania or Kenya. The limited availability and high cost of power also continues to impede the growth of manufacturing enterprises. The tourism industry has undeveloped potential for growth given the current political stability, travel infrastructure, and extensive national parks as well as other potential tourist sites. In 2006, Rwanda completed the Multilateral Debt Relief Initiative and the Heavily Indebted Poor Countries (HIPC) debt initiative, significantly lowering its foreign debt load. American business interests in Rwanda are modest, and the African Growth and Opportunity Act (AGOA) has yet to make a significant impact in Rwanda. In addition to long-standing tea production by an American firm, in 2008 a U.S. corporation concluded an agreement with Rwandan authorities to produce 100 megawatts of electrical power from methane extraction operations in Lake Kivu. In 2009 a U.S.-British consortium signed an agreement with the government to develop a biofuel project based on jatropha, and a U.S. mining company expanded its investment in local mineral production. In 2010, RwandAir signed a contract with Boeing for the purchase of two Boeing 737-800 aircraft, for an estimated $80 million. American exports of aviation, telecommunications, and construction equipment have increased in recent years. Energy needs will stress natural resources in wood and gas, but hydroelectric power development is underway, albeit primarily in the planning stages, as is methane development. Rwanda does not have nuclear power or coal resources. Finally, Rwanda's fertility rate--averaging 5.5 births (2008 est.) per woman--will continue to stress services, and diseases such as HIV/AIDS transmission, malaria, and tuberculosis will have a major impact on human resources. Rwanda's government-run radio broadcasts 15 hours a day in Kinyarwanda, English, and French, the national languages. News programs include regular re-broadcasts from international radio such as Voice of America, BBC, and Deutsche Welle. There is one government-operated television station. In addition to government-operated Radio Rwanda, there are a number of independent FM radio stations. There are few independent newspapers; most newspapers publish in Kinyarwanda on a weekly, biweekly, or monthly basis. Several Western nations, including the United States, are working to encourage freedom of the press, the free exchange of ideas, and responsible journalism.

GDP (2009 est.): $5.1 billion.
Real GDP growth rate (2010 est., International Monetary Fund): 6.5%.
Per capita income (2009 est.): $510. Purchasing power parity (2006 est.): $1,600.
Average inflation rate (2008 est.): 5.7%.
Agriculture (2009): 36% of GDP. Products--coffee, tea, pyrethrum (insecticide made from chrysanthemums), bananas, beans, sorghum, potatoes, livestock.
Industry (2009): 14.2% of GDP. Types--cement, agricultural products, beer production, soft drinks, soap, furniture, shoes, plastic goods, textiles, cigarettes, pharmaceuticals.
Services (2009): 43.7%.
Trade (2009 est.): Exports--$193 million: tea, coffee, coltan, cassiterite, hides, iron ore, and tin. Major markets--China, Belgium, and Germany. Imports--$963 million f.o.b.: foodstuffs, machinery and equipment, steel, petroleum products, cement, and construction material. Major suppliers--Kenya, Germany, Belgium, France, Uganda, and Israel.

Geography of Rwanda

Rwanda's countryside is covered by grasslands and small farms extending over rolling hills, with areas of rugged mountains that extend southeast from a chain of volcanoes in the northwest. The divide between the Congo and Nile drainage systems extends from north to south through western Rwanda at an average elevation of almost 9,000 feet. On the western slopes of this ridgeline, the land slopes abruptly toward Lake Kivu and the Ruzizi River valley, which form the western boundary with the People's Democratic Republic of Congo (formerly Zaire) and constitute part of the Great Rift valley. The eastern slopes are more moderate, with rolling hills extending across central uplands at gradually reducing altitudes, to the plains, swamps, and lakes of the eastern border region. Although located only two degrees south of the Equator, Rwanda's high elevation makes the climate temperate. The average daily temperature near Lake Kivu, at an altitude of 4,800 feet (1,463 meters) is 73o F (23o C). During the two rainy seasons (February-May and September-December), heavy downpours occur almost daily, alternating with sunny weather. Annual rainfall averages 80 centimeters (31 in.) but is generally heavier in the western and northwestern mountains than in the eastern savannas.
Official Name:
Republic of Rwanda Area: 26,338 sq. km. (10,169 sq. km.); about the size of Maryland. Cities: Capital--Kigali (est. pop. 236,000). Other cities--Gitarama, Butare, Ruhengeri, Gisenyi. Terrain: Uplands and hills. Climate: Mild and temperate, with two rainy seasons.

Government of Rwanda

GOVERNMENT AND POLITICAL CONDITIONS After its military victory in July 1994, the RPF organized a coalition government called "The Broad Based Government of National Unity." Its fundamental law was based on a combination of the June 1991 constitution, the Arusha accords, and political declarations by the parties. The government outlawed the MRND Party. In April 2003, the transitional National Assembly recommended the dissolution of the Democratic Republican Party (MDR), one of eight political parties participating in the Government of National Unity since 1994. Human rights groups noted the subsequent disappearances of political figures associated with the MDR, including at least one parliamentarian serving in the National Assembly. On May 26, 2003, Rwanda adopted a new constitution that eliminated reference to ubwoko and set the stage for presidential and legislative elections in August and September 2003. The seven remaining political parties endorsed incumbent Paul Kagame for president, who was elected to a 7-year term on August 25, 2003. Rwanda held its first-ever legislative elections September 29 to October 2, 2003. A ninth political party formed after these 2003 elections. In the spring of 2006, the government conducted local non-partisan elections for district mayors and for sector and cell executive committees. Elections for the Chamber of Deputies occurred in September 2008; the RPF won an easy victory in coalition with six small parties, taking 42 of 53 directly-elected seats. As provided in the constitution, 24 seats were also accorded to women candidates in indirect elections. Women now hold 45 of the 80 seats in the Chamber. The elections were peaceful and orderly, despite irregularities. A tenth political party formed in 2010. Presidential elections were held in August 2010; the National Electoral Commission reported that President Kagame won re-election with roughly 93% of the vote. The presidential election was peaceful and orderly, with heavy turnout. However, the pre-election period was marked by events of concern, including waves of terrorist attacks using grenades in populous areas, the murder of a journalist, the unexplained murder of the vice president of the Democratic Green Party, an assassination attempt on a former high-ranking government official accused of fomenting attacks, and the suspension of two local-language newspapers. In addition, two political opposition figures were arrested on criminal charges, and a party that had been seeking to register for many months was unable to do so. Challenges facing the government include maintaining internal and regional security, promoting further democratization and judicial reform; completion of prosecution of remaining individuals for crimes relating to the 1994 genocide, either by the regular court system or the gacaca system; integrating former combatants and prisoners; preventing the recurrence of any insurgency directed by ex-military and Interahamwe militia who remain in eastern Congo; and the continuing work on medium- and long-term development.

Principal Government Officials
President--Paul Kagame
Prime Minister--Bernard Makuza
Minister of Foreign Affairs--Louise Mushikiwabo
Ambassador to the United States--James Kimonyo
Ambassador to the United Nations--Eugene-Richard Gasana

Rwanda maintains an embassy in the United States at 1714 New Hampshire Avenue NW, Washington, DC 20009 (tel. 202-232-2882).

Type: Republic.
Independence: July 1, 1962.
Constitution: May 26, 2003.
Branches: Executive--president (chief of state), prime minister (head of government). Broad-based government of national unity formed after the 1994 civil war. Elections in 2003 elected a president, 80-seat Chamber of Deputies and 26-member Senate. Elections for the Chamber of Deputies were again held in 2008. Legislative--Chamber of Deputies; Senate. Judicial--Supreme Court; High Courts of the Republic; Provincial Courts; District Courts; mediation committees.
Administrative subdivisions: 4 provinces plus Kigali; 30 districts; 416 sectors; 2,148 cells.
Political parties: There are nine political parties, including the ruling Rwandan Patriotic Front (RPF), which leads a coalition that includes the Centrist Democratic Party (PDC), the Rwandan Socialist Party (PSR), the Ideal [formerly Islamic] Democratic Party (PDI), and the Democratic Popular Union (UPDR). Other parties include the Social Democratic Party (PSD), the Liberal Party (PL), the Concord Progressive Party (PPC), and the Prosperity and Solidarity Party (PSP).
Suffrage: Universal for citizens over 18--except refugees, prisoners, and certain categories of convicts.
Central government budget (2007 est.): 31.7 billions of Rwandan francs ($29 million) Revenues--$28 million. Expenditures--$29 million.

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History of Rwanda

According to folklore, Tutsi cattle breeders began arriving in the area from the Horn of Africa in the 15th century and gradually subjugated the Hutu inhabitants. The Tutsis established a monarchy headed by a mwami (king) and a feudal hierarchy of Tutsi nobles and gentry. Through a contract known as ubuhake, the Hutu farmers pledged their services and those of their descendants to a Tutsi lord in return for the loan of cattle and use of pastures and arable land. Thus, the Tutsi reduced the Hutu to virtual serfdom. However, boundaries of race and class became less distinct over the years as some Tutsi declined until they enjoyed few advantages over the Hutu. The first European known to have visited Rwanda was German Count Von Goetzen in 1894. He was followed by missionaries, notably the "White Fathers." In 1899, the mwami submitted to a German protectorate without resistance. Belgian troops from Zaire chased the small number of Germans out of Rwanda in 1915 and took control of the country. After World War I, the League of Nations mandated Rwanda and its southern neighbor, Burundi, to Belgium as the territory of Ruanda-Urundi. Following World War II, Ruanda-Urundi became a UN trust territory with Belgium as the administrative authority. Reforms instituted by the Belgians in the 1950s encouraged the growth of democratic political institutions but were resisted by the Tutsi traditionalists who saw in them a threat to Tutsi rule. An increasingly restive Hutu population, encouraged by the Belgian military, sparked a revolt in November 1959, resulting in the overthrow of the Tutsi monarchy. Two years later, the Party of the Hutu Emancipation Movement (PARMEHUTU) won an overwhelming victory in a UN-supervised referendum. During the 1959 revolt and its aftermath, more than 160,000 Tutsis fled to neighboring countries. The PARMEHUTU government, formed as a result of the September 1961 election, was granted internal autonomy by Belgium on January 1, 1962. A June 1962 UN General Assembly resolution terminated the Belgian trusteeship and granted full independence to Rwanda (and Burundi) effective July 1, 1962. Gregoire Kayibanda, leader of the PARMEHUTU Party, became Rwanda's first elected president, leading a government chosen from the membership of the directly elected unicameral National Assembly. Peaceful negotiation of international problems, social and economic elevation of the masses, and integrated development of Rwanda were the ideals of the Kayibanda regime. Relations with 43 countries, including the United States, were established in the first 10 years. Despite the progress made, inefficiency and corruption began festering in government ministries in the mid-1960s. On July 5, 1973, the military took power under the leadership of Maj. Gen. Juvenal Habyarimana, who dissolved the National Assembly and the PARMEHUTU Party and abolished all political activity. In 1975, President Habyarimana formed the National Revolutionary Movement for Development (MRND) whose goals were to promote peace, unity, and national development. The movement was organized from the "hillside" to the national level and included elected and appointed officials. Under MRND aegis, Rwandans went to the polls in December 1978, overwhelmingly endorsed a new constitution, and confirmed President Habyarimana as president. President Habyarimana was re-elected in 1983 and again in 1988, when he was the sole candidate. Responding to public pressure for political reform, President Habyarimana announced in July 1990 his intention to transform Rwanda's one-party state into a multi-party democracy. On October 1, 1990, Rwandan exiles banded together as the Rwandan Patriotic Front (RPF) and invaded Rwanda from their base in Uganda. The rebel force, composed primarily of ethnic Tutsis, blamed the government for failing to democratize and resolve the problems of some 500,000 Tutsi refugees living in the diaspora around the world. The war dragged on for almost 2 years until a cease-fire accord was signed July 12, 1992, in Arusha, Tanzania, fixing a timetable for an end to the fighting and political talks, leading to a peace accord and power sharing, and authorizing a neutral military observer group under the auspices of the Organization for African Unity. A cease-fire took effect July 31, 1992, and political talks began August 10, 1992. On April 6, 1994, the airplane carrying President Habyarimana and the President of Burundi was shot down as it prepared to land at Kigali. Both presidents were killed. As though the shooting down was a signal, military and militia groups began rounding up and killing all Tutsis and political moderates, regardless of their ethnic background. The prime minister and her 10 Belgian bodyguards were among the first victims. The killing swiftly spread from Kigali to all corners of the country; between April 6 and the beginning of July, a genocide of unprecedented swiftness left up to 800,000 Tutsis and moderate Hutus dead at the hands of organized bands of militia--Interahamwe. Even ordinary citizens were called on to kill their neighbors by local officials and government-sponsored radio. The president's MRND Party was implicated in organizing many aspects of the genocide. The RPF battalion stationed in Kigali under the Arusha accords came under attack immediately after the shooting down of the president's plane. The battalion fought its way out of Kigali and joined up with RPF units in the north. The RPF then resumed its invasion, and civil war raged concurrently with the genocide for 2 months. French forces landed in Goma, Zaire, in June 1994 on a humanitarian mission. They deployed throughout southwest Rwanda in an area they called "Zone Turquoise," quelling the genocide and stopping the fighting there. The Rwandan Army was quickly defeated by the RPF and fled across the border to Zaire followed by some 2 million refugees who fled to Zaire, Tanzania, and Burundi. The RPF took Kigali on July 4, 1994, and the war ended on July 16, 1994. The RPF took control of a country ravaged by war and genocide. Up to 800,000 had been murdered, another 2 million or so had fled, and another million or so were displaced internally. The international community responded with one of the largest humanitarian relief efforts ever mounted. The U.S. was one of the largest contributors. The UN peacekeeping operation, UNAMIR, was drawn down during the fighting but brought back up to strength after the RPF victory. UNAMIR remained in Rwanda until March 8, 1996. Following an uprising by the ethnic Tutsi Banyamulenge people in eastern Zaire in October 1996, a huge movement of refugees began which brought more than 600,000 back to Rwanda in the last 2 weeks of November. This massive repatriation was followed at the end of December 1996 by the return of another 500,000 from Tanzania, again in a huge, spontaneous wave. Less than 100,000 Rwandans are estimated to remain outside of Rwanda, and they are thought to be the remnants of the defeated army of the former genocidal government, its allies in the civilian militias known as Interahamwe, and soldiers recruited in the refugee camps before 1996. In 2001, the government began implementation of a grassroots village-level justice system, known as gacaca, in order to address the enormous backlog of cases. Despite periodic prison releases, including the most recent January 2006 release of approximately 7,000 prisoners, tens of thousands of individuals remain in the prison system, some scheduled to face the traditional court system, some awaiting trial by gacaca courts, some convicted by gacaca courts and returned to serve their sentences. By the end of 2006, 818,000 genocide suspects had been identified by the gacaca courts. These courts hope to complete their caseload by the end of 2008. In January 2008 a moderate earthquake in neighboring D.R.C., near the southern Rwandan border town of Cyangugu, caused several dozen deaths and hundreds of injuries in two Rwandan districts, with hundreds of homes rendered uninhabitable and several churches demolished. Rwandan authorities responded quickly to the tragedy and, with the assistance of local and international non-governmental organizations (NGOs), assisted those in need.

People of Rwanda

Rwanda's population density is currently the highest in continental sub-Saharan Africa. It is still a very rural society, and many families live in a self-contained compound on a hillside. The urban concentrations are grouped around administrative centers. The indigenous population consists of three groups, or ubwoko-- Bahutu, Batutsi, and Batwa. Traditionally, the population also is affiliated with one of 18 clans--all with more than one ubwoko or group. Accounts of the respective arrivals of each ubwoko centuries ago in the area of modern Rwanda were highly politicized throughout much of the 20th century, and the Belgian colonialists’ “racialization” of differences among ubwoko was used by the Rwandan Government to fuel the 1994 state-orchestrated genocide. As part of political efforts to overcome divisions that led to the genocide, the Rwandan Government does not collect data on ubwoko and banned its inclusion on identity cards. Rwandans share the same language and culture, so ubwoko today reflects a family identity that has been passed patrilineally and often a historical narrative. The Rwandan Government does not permit politicization of this identity, any form of discrimination, or “genocide ideology” (hate speech) based on ubwoko. Education Until 1994, educational opportunities for Rwandans were extremely limited. After the genocide, most primary schools and more than half of prewar secondary schools reopened, though no more than 5% of the adult population received secondary education through 1996. Although educational quality remains an issue, access to education expanded dramatically in recent years and the Government of Rwanda’s Nine-Year Basic Education policy, implemented in 2010, contributed to an increase of the primary school completion rate from 52.4% in 2008 to 75.6% in 2010. The National University (NUR) in Huye (formerly Butare), Rwanda’s sole university prior to 1994, reopened in April 1995; enrollment is over 7,000 students. Today, there are about 20 institutions of higher learning in Rwanda. Between 1963-1993, Rwandan university graduates numbered roughly 1,900; today, Rwandan university graduates exceed 44,000. Seventy percent of the adult population is literate (2008). Rebuilding the educational system continues to be a high priority of the Rwandan Government. Rwanda has three official languages--Kinyarwanda, French, and English. The recent transition to English as the language of instruction in schools presents pedagogical challenges even as if offers prospects for increased opportunity within the East African Community and internationally. Nationality: Noun and adjective --Rwandan(s); Rwandese. Population (2009 est.): approximately 9,997,614. Annual population growth rate (2008 est.): 2.8%. Religions (2002 est.): Christian 93.5%, traditional African 0.1%, Muslim 4.6%, 1.7% claim no religious beliefs. Languages: Kinyarwanda, French, English. Education: Years compulsory --9. Attendance (prewar)--75%. Literacy (2008)--70%. Health: Infant mortality rate (2008 est., Rwandan Government)--62 deaths/1,000. Life expectancy (2008 est.)--49.8 years. Work force (2000): Agriculture --90%; industry and commerce, services, and government --10%.