UNIVERSITY OF RWANDA

COLLEGE OF ART AND SOCIAL SCIENCES

School of Governance
DEPARTMENT OF SOCIAL SCIENCES/Development Studies
Module Component: Rwandan Economy
By
Dr Gerard Bikorimana
Email: bikogerard@[Link]
 Aims of the course
• The aims of this course are to:
Help the students to understand the economic structural of
data on Rwanda toward to Rwandan Economic sectors and well
understanding some economic and development concepts.
Assist the students to identify key data on the Rwandan
economy, explain the implications of the concept of
development in the case of Rwanda and to make relevant
critical on various government interventions, using rigorous
methods of analysis.
sensitize the students of the University to become real leaders
and good decision makers of our country in future on different
social economic issues.
 Learning outcomes
• At the end of this course, and having completed the
Essential readings, you should be able to:
 Demonstrate comprehensive knowledge on
concepts, principle and approaches used in Rwandan
Economy
Understanding the main economic sectors of
Rwanda
Apply microeconomics and macroeconomic
principles to Rwandan economic issues
 Module Requirements/Assessment

• Progressive assessment
• Attendance and class participation
• Group assignments and presentations
• CAT
• Final exam
Academic Dishonesty and Plagiarism
• Any form of academic dishonesty is severely penalized. You will get zero mark
for your assignment if you fail to observe any of the following rules :
• All written work submitted for this module must be original in its conception,
organization, and phrasing.
• All sources used must be appropriately acknowledged or cited, including
Internet materials.
 References
 Thomas [Link], International economics, Thirteenth edition,
McGraw- Hill Irwin, Library of Congress Cataloging-in-Publication
data, 2007
 Frederic S. Mishkin, The Economics of Money, Banking, and Financial
Markets, Eighth Edition, Pearson Addison, Library of Congress
Cataloging-in-Publication data, 2006
 Rwanda Vision 2020 Full Version
 Economic Development & Poverty Reduction Strategy 2008-2012
 National Bank of Rwanda, Annual Report 2008, June 2009
 National Bank of Rwanda, Monetary Policy and Financial statement,
August 26th, 2010.
 National Bank of Rwanda, Economic Review Number 004, June 2010
 National Institute of Statistics of Rwanda (NISR), Rwanda Statistical
Year Book 2019, December 2019
 0.1. Introduction
• Rwanda is a land locked eastern African nation in the Great Lakes
region. It shares international borders with Uganda, Tanzania,
Burundi and the Democratic Republic of Congo.
• The country has Resident population of 10,537,22 people as of
August 15th 2012(NISR, 2012), when comparing to the enumerated
population in 2002 census of 8,128,553, an increase of 2, 408,669
people and an average annual growth rate of 2.6% have been
observed.
• Based on 2015 estimates, with almost 44.9% of the people living
below the international poverty line.
• The country has a total area of [Link], of which 24.950sq Km
(94,7%) is made up of land and [Link] (5.3%) of water. The
total land area, on 8,[Link] (32.7%) are suitable for cultivation.
 Introduction(Cont’d)
• The nearest port on the Indian ocean is at 1700Km away from
Kigali and least at 2200Km to atlantic ocean. It is also located
at midway of the distance between Cap Towm and Cairo long
of 7400Km.
• 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.
 0.2. Economic growth Performance
• The Rwandan Economy recorded the highest growth in the last 10
years with 9.5 percent, almost 3 percentage points higher than the
10-years' average during the fiscal year 2018/19.
• This was mainly driven by the industry sector, which saw its
growth doubled from 8 percent in 2017/18 to 16 percent in 2018/19
thanks to construction and manufacturing boost, which saw 25
percent and 12 percent growth respectively in 2018/19.
 0. 3. Generalities and key concepts
• The word economy comes from Greek word for “one who
manage the household.”
• A household faces many decisions. It must decide which
members of the household do which tasks and what each
member gets in return.
• In short the household must allocate its scarce resources
among its various members, taking into account each
member’s abilities, efforts and desires.
• Like a household, a society faces many decisions.
• The management of society’s resources is important
because resources are scarce. Scarcity means that society
has limited resources and therefore cannot produce all the
goods and services people wish to have.
 Cont’d….
• Economics is the study of how society manages its scare resources. In
most societies, resources allocated not by a single central planner but
through the combined actions of millions of households and firms.
0.3.1. Gross domestic product (GDP) and its components
• Gross domestic product (GDP) is the market value of all final goods
and services produced within a country in a given period of time.
• GDP (which we note by Y) is divided into four components:
consumption (C), investment (I), government purchases (G), and net
exports (NX):
Y=C+I+G+NX.
• Economics is divided into two branches: microeconomics and
macroeconomics.
• Microeconomics is the study of how individual households and firms
make decisions and how they interact with one another in markets.
Macroeconomics is the study of the economy as a whole. The goal of
macroeconomics is to explain the economic changes that affect many
households, firms, and markets simultaneously.
 I. Brief Overview Rwandan Planning
Prospect
• 1.1. Vision 2020
• The Rwandan Vision 2020 is a result of a national consultative process
that took place in Village Urugwiro in1998-99. There was broad
consensus on the necessity for Rwandans to clearly define the future of
the country.
• Today, Rwanda finds itself at a crossroads, moving from the
humanitarian assistance phase associated with the 1994 genocide into
one of sustainable development.
• The Rwandan population is expected to double to around 16 million by
2020.
• Given that the major aspiration of Vision 2020 is to transform Rwanda’s
economy into a middle-income country (per capita income of about 900
USD per year, from 220 USD in 2000), this will require an annual
growth rate of at least 7%.
• This will not be achieved unless we transform from a subsistence
agriculture economy to a knowledge -based society, with high levels of
savings and private investment.
 Cont’d,….
• Economic growth, alone, is not sufficient to bring about the necessary
rise in the standard of living of the population. To overcome hunger
and poverty, growth must be Pro-Poor, giving all Rwandan’s the
chance to gain from the new economic opportunities.
• Vision 2020 achievable program are based on the following pillars:
Reconstruction of the nation and its social capital anchored on good
governance, underpinned by a capable state;
Transformation of agriculture into a productive, high value, market-oriented
sector, with forward linkages to other sectors;
Development of an efficient private sector spearheaded by competitiveness
and entrepreneurship;
Infrastructural development, entailing improved transport links, energy and
water supplies and ICT networks;
Promotion of regional economic integration and cooperation.
At all times, these will be affected by several cross-cutting issues
including, gender equality and sustainable environmental and natural
resource management, and ICT.
 1.2. Current situation and the challenges
1.2.1. Historical Perspective
• Rwanda has made significant progress from the devastated
nation that emerged from the 1994 genocide, it still remains a
severely under-developed, agrarian based economy with around
60% of the population living under the poverty line.
• Rwanda existed as a nation founded on a common history of its
people, shared values, a single language and culture, extending
well beyond the current boarders of the country.
• The colonial power, based on an ideology of racial superiority
and in collaboration with some religious organizations, exploited
the subtle social differences and institutionalized discrimination.
• These actions distorted the harmonious social structure, creating
a false ethnic division with disastrous consequences.
 Historical Perspective
The recent history of Rwanda can be summarized by the following key
events:
The 1884 Berlin Conference placed the Kingdom of Rwanda under
German rule as part of Deutsch Ostafrica
During the subsequent partition of Africa in 1910, a big part of Rwanda
was annexed to neighbouring countries.
Following the 1st World War and the defeat of Germany, Rwanda was
given to Belgium
After the 2nd World War, the League of Nations became the United
Nations and Rwanda became a UN Mandate trust territory, under Belgian
administration, until 1962
The RPF put an end to the 1994 genocide and thereafter formed the
Government of National Unity (GNU) and the Transitional National
Assembly (TNA) in coalition with other political parties to define a new
future for Rwanda through democratic institutions
This historical legacy goes some way to explain the challenges that Rwanda
faces today.
 1.2.2. Major challenges facing Rwanda today
• The economy of Rwanda is currently characterized by internal
(budget deficit) and external (Balance of Payments) macroeconomic
disequilibria, alongside low savings and investment rates and high
unemployment and underemployment.
• In addition, Rwanda’s exports, composed mainly of tea and coffee –
whose prices are subject to fluctuations on the international market –
have not been able to cover imports needs.
This overall situation can be best explained by reviewing several
individual challenges:
1. Diminishing agricultural productivity and arable land distribution
2. Natural Barriers to trade
3. Narrow economic base
4. Weak institutional capacity
5. Low level of human resource development
6. Public debt
7. Social and Economic Consequences of the Genocide
 1.3. Major Objectives of Vision 2020
• The VISION seeks to fundamentally transform Rwanda into a
middle-income country by the year 2020.
• This will require achieving annual per capita income of US$ 900
(US$ 220 in 2000), a poverty rate of 30% (60.4% n 2000) and an
average life expectance of 55 years (49 years in 2000).
• Considering Rwanda’s extremely scarce resources, prioritization
and sequencing will be crucial.
1.3.1. The Short Term: Promotion of macroeconomic stability and wealth
creation to reduce aid dependency
• Rwanda will put into place macroeconomic stabilization policies
that are conducive for private sector development.
• This, together with expanding the domestic resource base and
increasing exports, is the only way to reduce aid dependence.
• How can you reduce this dependence?
 1.3.2. The Medium Term: Transforming from an agrarian to a
knowledge -based economy
• Rwanda’s agriculture is transformed into a high value/high productivity sector,
it will not, on its own, become a satisfactory engine of growth.
• There must be an exit strategy from reliance on agriculture into secondary and
tertiary sectors.
• The issue, however, is not simply one of a strategy based on agriculture,
industry or services, but rather, identifying Rwanda’s comparative advantage
and concentrating strategies towards it.
• For instance there is a abundant supply of cheap labour, a large multi-lingual
population, a strategic location as the gateway between East and Central Africa
as well as its small size, making it easy to build infrastructure (resources
permitting).
• The industries established would need to address basic needs, for which there is
a readily available market, as these products can satisfy local demand and even
move towards export.
• As for services, in the medium to long term, this sector will become the most
important engine of Rwanda’s economy.
• Improvements in education and health standards will be crucial for providing an
efficient and productive workforce.
1.3.3. Long Term: Creating a productive middle class
and fostering entrepreneurship
• The developmental process and capital formation cannot – in the
long run – be achieved by the state or by donor funds alone. While
both must contribute, the backbone of the process should be a
middle class of Rwandan entrepreneurs.
• Productive entrepreneurship must be raised to perform its
traditional role of creating wealth, employment and vital
innovations through opportunities for profit.
• Stimulating the private sector, particularly regarding the promotion
of exports and competitiveness is not achievable without
broadening and deepening the financial sector such as banking,
insurance and the application of information technology.
• Provision of high-quality educational services in sciences and
technology will be necessary for consolidating development gains
made in the short and medium term.
 1.3.4. Pillars of the Vision 2020 Cross-cutting areas
of Vision 2020
1. Good governance and a capable state
2. Human resource development and a knowledge-based
economy
3. A private sector-led economy
4. Infrastructure development
5. Productive and Market Oriented Agriculture
6. Regional and International Economic integration.
The vision aims to replace subsistence farming by a
fully monetized, commercial agricultural sector by
2020.
 Cont’d….
The key policy areas that need urgent attention to bring about
this transformation include the following:
Institutional and legal reforms to ensure security of land
ownership;
Development of a market in land assets;
Extensive research and extension services;
Investment in rural infrastructures;
Use of high yielding varieties and intensive input use, especially
fertilisers;
Promotion of agro-based manufacturing;
Environmental control measures to halt the decline in soil
fertility;
Rural Financing Schemes and Markets
 1.4. Economic Development and Poverty
Reduction Strategy I (EDPRSI)

• Rwanda’s Economic Development and Poverty Reduction Strategy

(EDPRS) is both a document and a process.
• As a document, the EDPRS sets out the country’s objectives, priorities
and major policies for the next five years (2008-2012).
• It provides a road map for government, development partners, the
Private Sector and civil society and indicates where Rwanda wants to
go, what it needs to do to get there, how it is going to do it, what the
journey is going to cost and how it will be financed.
• The EDPRS breaks with the past in two ways. Firstly, the strategy
redefines the country’s priorities. Rwanda’s first Poverty Reduction
Strategy Paper (PRSP) covered the period 2002-2005.
• It was elaborated in a post-conflict environment where the primary
emphasis was on managing a transitional period of rehabilitation and
reconstruction.
 Cont’d….
• Secondly, this strategy document advocates a different way
of doing things in Rwanda.
• The EDPRS also recognizes the key role of the Private Sector
in accelerating growth in order to reduce poverty.
• The priorities of the strategy are embodied in three
flagship programmes: sustainable Growth for Jobs and
Exports, Vision 2020 Umurenge and governance.
• Vision 2020 Umurenge is a highly decentralized integrated
rural development programme designed to accelerate
extreme poverty reduction in Rwanda.
• The EDPRS assigns the highest priority to accelerating
growth to create employment and generate exports.
 ECONOMIC DEVELOPMENT AND POVERTY
REDUCTION STRATEGY SECOND GENERATION
(EDPRS 2)

• The Second EDPRS is a five-year plan designed to accelerate the

progress already achieved and to shape the country’s
development in the future.
• It will build on those policies from EDPRS 1 which have been
effective in accelerating growth, creating employment and
generating exports.
• In addition, EDPRS 2 will innovate determinedly to strengthen
policy and strategy approaches to ensure continuing
achievement by more engagement of the private sector.
• Overarching Goal of EDPRS 2 “Accelerating progress to
middle income status and better quality of life for all
Rwandans”
 Chapter II: Rwandan Economic Sectors
• 2.1. Agriculture Sector
• The Rwanda economy is based predominantly on agriculture.
• According to the EICV 2 (2006), agriculture employs close to
80% of the population. It contributes 47% to GNP and accounts
for 71% of the country’s export revenues.
• The absence of mineral and other nature resources, the
landlockedness, the current low level of industrialization and
low purchasing power of the population largely explain why
agriculture and animal husbandry is the main engine for
accelerated economic growth and sustained development.
• Agriculture is also important for poverty reduction since it is
the main occupation of the poor.
 The main challenges of the Rwanda
agricultural sector are the following:

• Transformation of subsistence agriculture into commercial

agriculture,
• To ensure food and food security in the country.
• Improvement of the farmers’ income and monetization of
agricultural economy.
• Creation of extra agricultural jobs enabling to notably reduce
agricultural population.
• To contribute to the improvement of the commercial balance,
the domestic product and savings.
• To reserve the soil degradation process and to manage the
property soil in a sustainable manner.
 Contribution of Agriculture to Gross Domestic product
(in billion of RWF, at 2017 constant prices)

5000

4500

4000

3500

3000

2500

2000

1500

1000

500

Food crops Export crops Livestock & livestock products

Forestry Fishing Agriculture, Forestry & Fishing
 2.2. RWANDA’S TRADE AND INDUSTRY

• The manufacturing sector is still at an embryonic stage.

• In 2001, the sector employed fewer than 2% of the active
population (22,356 employees in 2000) and its share in real GDP
was estimated at an average of 6.8% on the period 2001-2006.
• Exports of manufactured goods are very limited and consist almost
exclusively of agro-industrial products, mainly tea, coffee and
pyrethrum.
• It should be noted that, production in the manufacturing sector
focuses on the manufacture of goods such as beverages, textiles,
tobacco, cement, tea and coffee.
• Three areas: foods and beverages and tobacco-based products and
chemicals account for more than 70% of production in 2008.
Almost two-thirds of companies involved are allocated in Kigali.
 2.2.1. TRADE
• Rwanda has experienced strong trade performance, with exports
growing at an average of 12.5% per year since 2001 as shown
by the table below.
• Rwanda’s exports reached an estimated USD182 million in
2008, more than twice the recipients generated in 2002.
• Coffee, tourism and Tea have fuelled this growth, accounting for
67% of the 2008 export numbers.
• Besides private sector mobilization, an important driver of
export growth has been the restructuring of front agencies
(OCIR-Café‟, OCIR-The‟, ORTPIN, RIEPA-now under RDB
and BRD).
• While this performance is short of desired targets, it provides
evidence that Rwanda can generate growth when informed
choices and timely action are made on specific export industries.
 2.2.2. Trade and industry policy
• The main objective of industrial policy is poverty reduction.
• Under the vision 2020 program, the government expects to channel investment into light
industry for the process of local resources and to focus on economic diversification and
competitiveness within an export-oriented setting.
• In order to achieve this, detailed files on local resources their availability and markets are
provided to potential investors.
• The industry sector policy is based on the following principles:
 Organizing a progressive disengagement of the government from the productive sector
and promote private sector development,
 Training in use of new manufacturing technologies;
 Organizing industries that are competitive, environmental friendly and sustainable;
 Elaboration of a legal and regulatory texts governing the industry sector;
 Promotion of agro-industry concentrating on value addition;
 Decentralization of the industrial activities;
 Promotion of competitiveness in the industrial sector towards growth in productivity;
 Promotion of micro, small and medium enterprises.
 Cont’d,…
• The trade policy retains seven core principles, which are:
 Development of the internal trade in marketing available goods and
services on markets
 Export promotion
 Trade professionalism
 Regional integration promotion
 Domestic market supply improvement
 Consumers protection
 International trade promotion.

 The good performance of industrial sector was driven by improvement

in the production of electricity and water (5.9%), manufacturing
industry (3.1%), and construction sector (1.4%).
 2.2.3. Manufacturing Industry
• In 2009, manufacturing activities progressed with a value-added increase of
3.1% following 5.6% achieved in 2008.
• The growth in the manufacturing industry came from improvement in wood,
paper and printing, food processing, and beverages and tobacco which
recorded the value-added increase of 7.9%, 6.2% and 4.3% respectively. For
more information see the information on the table related to the
contribution of manufacturing by branch on GDP.

2.2.4 Electricity and water production

100%
80%
60%
40%
20%
0%
2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2017 2018

2. Treated water (in millions of m3)

Import
Export
1. Electricity (in millions of KwH): National Production
2.2.5. Construction
 2.3. Services Sector
• The outstanding performance in services sector was
maintained in 2019 as indicated by the table below which
shows the Contribution of tertiary sector to Gross Domestic
product at constant price of 2017 compared to the value of
increase in previous year.
• This was mainly attributed to the increase in health
services, Wholesale & retail trade, and transport, storage
and communication. For more information see the
information on the table related to the contribution of
tertiary sector to GDP.
3. Overview Rwandan Macro-economics
• 3.1. GDP
• Rwanda’s economy in 2008 developed in an unfavourable
international economic environment characterized by a worst
inflationary shock and the current global financial crisis.
• The world economy experienced important inflationary shocks
during the first half of 2008 due essentially to the increase in world
oil and food prices.
• The financial crisis which occurred in the United States in the second
half of 2006 and became acute in 2008 continues to affect seriously
the world economic outlook.
• The last estimates of the International Monetary Fund (IMF)
highlight a world economic growth rate of 3.2% at the end of 2008
against 5.2% recorded in 2007.
• Despite the unfavourable international environment, Rwandan
economy continued to perform well with the real GDP growth rate of
11.2% in 2008 following 7.9% recorded in 2007.
 Cont’d,…..
• This growth was mainly due to a strong recovery in the agriculture
sector which registered a growth rate of 15% compared to 0.7% in
2007 and a noticeable improvement both in industry and service
sectors which increased by 10.7% and 7.9% respectively.
• The secondary sector growth was driven mainly by good performance
in the construction and public works sub-sector (26%) and production
of electricity (16.9%) despite a decline in manufacturing of 4.1%.
• The overall inflation accelerated from 6.6% in December 2007 to
22.3% in December 2008, despite the improvement in agriculture
production and the low growth of broad money.
• The inflationary pressures resulted particularly from the international
fuel and food prices.
• The change in average import value became greater than the change in
export average value index (39.7% compared to 16.7% respectively).
• The Balance of Payments registered an excess of USD 58.01 million.
 3.1.1. Overview of the sector
12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
2012 2013 2014 2015 2016 2017 2018

Agriculture Industry Services GDP

 3.1.2. Agriculture
• Agriculture accounts for over 35% of total GDP in real terms.
• An impressive real growth rate of 15% was observed this year, well
above the previous five- year average of under 5%.
• This was largely the result of a very successful food crop (carrying the
majority weight in the sector), the product of a major investment drive
by the Ministry of Agriculture and Animal Resources and the recovery
in export crops from a poor year in 2007.
• Success has been achieved in this sector due to a strong commitment,
through the EDPRS, of government programs.
• Crop Intensification Programs, fertilizer use, distribution of better-
quality seeds, irrigation pilot programs, greater use of water
harvesting and terracing are a number of measures currently being
pursued.
 3.1.3. Industry

• The industrial sector saw double-digit real growth in 2008 at

10.7%.
• This is above the five year average and continues to be driven
by growth in the construction category, which carries the
heaviest weight for the sector as a whole.
• The industrial sector growth was motivated by the increased
production from the new additional hydro plants, following a
period of refurbishment.
• For the updated data about the growth rates of sector see the
table in syllabus.
 3.1.4. Services
• The service sector recognized a good performance over time
and this was motivated by the government focus on it.
• The strong growth in the wholesale and retail trade sector
(accounting for a 22% weight), transport, storage and
communication, and restaurants and hotels benefitted from a
record high year in tourist arrivals, coupled with the
increasing role of Rwanda as a regional conference hub,
resulting in high demand across the sector.
 3.2. Inflation
• The major pressure point in the Rwandan economy for much of
2008 has been the inflation rate.
• In 2007 inflationary pressure was also experienced, to a lesser
degree, and was attributable to domestic factors.
• In 2008, inflationary pressure mainly stemmed from external
sources.
 3.3. Balance of Payment
• The balance of payments (BOP) is a statistical statement that summarizes
the economic transactions of an economy with the rest of the world for a
specific time period (International Monetary Fund definition).
• Expressed with the standard meaning for the capital account, the BOP
identity is:

• The compilation of Rwanda’s balance of payments is performed in

compliance with the concepts, definitions, and methodology
recommended and published in the IMF‟s Balance of Payments Manuals.
• The agency responsible for compiling the balance of payments statistics
of Rwanda is the National Bank of Rwanda
• The data are initially compiled in millions of U.S. dollars at the
transaction exchange rate, and then converted into Rwanda francs on the
basis of an annual average exchange rate
 The current account

It is divided into four categories:

 trade in goods: this covers the exports and imports of goods
 income: this covers compensation of employees’ earnings
from employment abroad and investment income
 current transfers: consist of payments and receipts where there
is no corresponding exchange of a good or service. E.g. Central
government transfers and other sector transfers
trade in services: covers exports and imports of services. For
example foreign tourist expenditure in Rwanda. The main
product groupings in this category are: transportation, travel,
communication services, construction etc.
 The capital account

Two categories:
 capital transfers: include government investment grants and a
new item, debt forgiveness which is the forgiveness of a debt
by mutual agreement.
 acquisition/disposal of non-produced, non-financial assets: is
concerned with the purchase or sale of particular assets e.g.
Land purchased or sold by a foreign embassy, purchases or
sales of patents etc.
 The financial account: it is known as transaction in assets and
liabilities
 Correcting a Balance of Payments Deficit

continued borrowing of foreign currency

 increasing interest rates to attract overseas
investors
 Imposing tariffs and import quotas
 IV. The key Challenges and opportunities:
Rwanda
• 4.1. Overview
• Original projections for Rwanda’s growth in 2009 were set at between seven and eight
percent, as per the EDPRS.
• The IMF projects that across Africa, growth rates could fall by around three percentage
points to between three and four percent real growth across the continent.
• The MINECOFIN projections are less pessimistic for Rwanda, with a growth rate of
between five and six percent anticipated.
• It is clear however that Rwanda – like many countries in the region faces significant
challenges in the year ahead, stemming from the global financial crisis.
• Before the onset of the COVID-19 crisis, Rwanda was among the ten fastest-growing
economies in the world. The growth of the Rwandan economy is expected to slow
sharply due to COVID-19.
• According to the 2020-2023 Budget Framework Paper (BFP), Rwanda's GDP growth
is poised to decelerate in 2020, to about 2.0 percent, mainly due to both the dampening
of global and domestic demand and disruptions in supply arising from the COVID-19
pandemic
 4.2. Commodity Prices
• In 2008, Rwanda benefitted from a general picture of high
export revenues and reasonable import prices.
• Favourable prices obtained for Rwanda’s key commodity
exports (tea and coffee), coupled with increased production
resulted in an excellent export revenue performance by
historical standards.
• Early evidence suggests that 2009 presents a very different
climate.
• The data for 2009 shows a rapidly deteriorating situation, with
export revenues for tea and coffee falling significantly.
• It is hoped that Rwanda will be shielded somewhat from the
declines seen on the international markets if strategies to
increase value added are implemented and the drive to increase
volumes is sustained.
 4.3. Credit
• As outlined above, although not directly related to the so-
called credit crunch in the US and Europe, Rwanda is
currently experiencing a credit crunch of sorts, with
commercial banks becoming increasingly risk averse and
credit more difficult to obtain.
• The Government of Rwanda is currently taking measures to
address this.
• This has implications for domestic investment programs –
particularly private investments – that may struggle to secure
the medium to long term financing they need to create
growth.
• International investment flows are already being hit by the
global shortage of credit, as funding is increasingly difficult
to secure.