More than two decades on, Rwanda’s economy, left in tatters following the genocide, has come a long way. Rwandans are generally living healthier and wealthier lives. But while poverty has fallen rapidly, more than 60% of the population still live on less than $1.25 a day.
According to WEF ,Here’s a snapshot of Rwanda’s economy today:
1. Rapid growth
One of the fastest growing economies in Central Africa, Rwanda notched up GDP growth of around 8% per year between 2001 and 2014.
The International Monetary Fund expects the economy to slow down this year and pick up in 2018, forecasting around 6% growth in 2016 compared with 6.9% last year.
The IMF said Rwanda’s growth in 2015 was driven by construction, services, agriculture and manufacturing, but mining exports have slowed.
2. Poverty rates
The country reduced the percentage of people living below the poverty line from 57% in 2005 to 45% in 2010. Despite this, 63% of the population still live in extreme poverty, defined by the World Bank as less than $1.25 a day.
3. Reducing inequality
Life expectancy, literacy, primary school enrollment and spending on healthcare have all improved.
Rwanda has also made big strides towards gender equality – almost 64% of parliamentarians are women, compared to just 22% worldwide – which has enabled women in the country to make economic advances. Women are now able to own land and girls can inherit from their parents.
4. Aid dependence
Foreign aid to Rwanda increased significantly as the country began rebuilding itself after the genocide. A large chunk of government revenues – 30-40% of the budget – still comes from aid.
The World Bank says Rwanda’s economy is vulnerable to fluctuations in foreign aid – growth fell to 4.7% in 2013 after some donors withheld aid over allegations in a 2012 UN report that the government was backing rebels in the Democratic Republic of Congo.
5. From a farming to a knowledge economy?
Currently around 83% of Rwanda’s population of 10.5 million live in rural areas and more than 70% of the population still work in subsistence farming. But the government, led by President Paul Kagame, wants to change this.
In the long term, the government aims to transform Rwanda from a low-income agriculture-based economy to a knowledge-based, service-oriented economy with a middle-income status by 2020.
