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 Economy of Rwanda

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kosovohp



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PostSubject: Economy of Rwanda   Fri Nov 12, 2010 9:21 am

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, causing a large drop in GDP and destroying the country's ability to attract private and external investment.[54] The country has since strengthened, with per-capita GDP (PPP) estimated at $951 in 2008,[100] compared with just $390 in 1994.[101] Major export markets include China, Germany and the United States.[54] The currency is the Rwandan franc and the economy is managed by the central National Bank of Rwanda. Rwanda recently joined the East African Community and there are plans for a common East African shilling, which could be in place by 2012.[102]

Rwanda is a country of few natural resources, and the economy is based mostly on subsistence agriculture by local farmers using simple tools.[103] An estimated 90% of the working population farms, and agriculture comprised an estimated 39.4% of GDP in 2006.[54] Since the mid 1980s, farm sizes and food production have been decreasing, due in part to the resettlement of displaced people.[104][105] Thus despite Rwanda's fertile ecosystem, food production often does not keep pace with population growth, requiring food imports.[54]

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.[106]

Livestock are raised throughout the country, with animal husbandry contributing around 8.8% of GDP in 2006.[107] Animals raised in Rwanda include cows, goats, sheep, pigs, chicken and rabbits, with geographical variation in the numbers of each.[107] Production systems are mostly traditional, although there are a few intensive dairy farms around Kigali.[107] Shortage of land, water shortage, insufficient and poor quality feed and regular disease epidemics with insufficient veterinary service are major constraints, restricting output in this sector. Fishing takes place on the country's lakes, but stocks are very depleted, and live fish are now being imported in an attempt to revive the industry.[108]

The industrial sector is small and uncompetitive.[109] Products manufactured include cement, agricultural products, small-scale beverages, soap, furniture, shoes, plastic goods, textiles, cigarettes.[54] Despite being a landlocked country of few natural resources, Rwanda's mining industry is an important contributor, generating US$93 million in 2008.[110] Minerals mined include cassiterite, wolframite, gold and coltan, which is used in the manufacture of electronic and communication devices such as mobile phones

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