Rwanda - Economy

Economy

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. 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 $1,284 in 2011, 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 June 2010, the exchange rate was 588 francs to the United States dollar. Rwanda joined the East African Community in 2007 and there are plans for a common East African shilling, which could be in place by 2015.

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 comprised an estimated 42.1% of GDP in 2010. 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.

Crops grown in the country include coffee, tea, pyrethrum, bananas, beans, sorghum and potatoes. Coffee and tea are the major cash crops for export, with the high altitudes, steep slopes and volcanic soils providing favourable conditions. 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 14.3% of GDP in 2010. 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.

Rwanda's service sector suffered during the late-2000s recession as banks reduced lending and foreign aid projects and investment were reduced. The sector rebounded in 2010, becoming the country's largest sector by economic output and contributing 43.6% of the country's GDP. 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$115.6 million 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. Other attractions include Nyungwe Forest, home to chimpanzees, Ruwenzori colobus and other primates, the resorts of Lake Kivu, and Akagera, a small savanna reserve in the east of the country.

Read more about this topic:  Rwanda

Other articles related to "economy":

Great Depression - Causes - Demand-driven - Keynesian
... in General Theory of Employment Interest and Money that lower aggregate expenditures in the economy contributed to a massive decline in income and to ... In such a situation, the economy reached equilibrium at low levels of economic activity and high unemployment ... to keep people fully employed, governments have to run deficits when the economy is slowing, as the private sector would not invest enough to keep production at the normal ...
Quincy, Massachusetts - Economy
... During its history Quincy has been known as a manufacturing and heavy industry center, with granite quarrying dominating employment in the 19th century and shipbuilding at Fore River Shipyard and Squantum Victory Yard rising to prominence in the 20th century ... The recent decades have seen a shift in focus to several large employers in the financial services, insurance and health care sectors of the economy ...
Iran–Iraq War - Home Front - Iran - Economy
... The war furthered the decline of the Iranian economy that had begun with the revolution in 1978–79 ...
Katanga Province - Economy
... Copper mining is an important part of the economy of Katanga province ... Cobalt mining by individual contractors is also prevalent ...
Scotland - Economy and Infrastructure
... Scotland has a western style open mixed economy that is closely linked with the rest of Europe and the wider world ... Traditionally, the Scottish economy has been dominated by heavy industry underpinned by the shipbuilding in Glasgow, coal mining and steel industries ... a shift from a manufacturing focus towards a more service-oriented economy ...

Famous quotes containing the word economy:

    The aim of the laborer should be, not to get his living, to get “a good job,” but to perform well a certain work; and, even in a pecuniary sense, it would be economy for a town to pay its laborers so well that they would not feel that they were working for low ends, as for a livelihood merely, but for scientific, or even moral ends. Do not hire a man who does your work for money, but him who does it for love of it.
    Henry David Thoreau (1817–1862)

    It enhances our sense of the grand security and serenity of nature to observe the still undisturbed economy and content of the fishes of this century, their happiness a regular fruit of the summer.
    Henry David Thoreau (1817–1862)