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Professor Michael E. Porter and Research Associates Michael McCreless and Kjell Carlsson prepared this case with the assistance of Kaia Miller.
This case was developed from published sources and field interviews. HBS cases are developed solely as the basis for class discussion. Cases are
not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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M I C H A E L E . P O R T E R
M I C H A E L M C C R E L E S S
Rwanda: National Economic Transformation
On April 7, 2004, Rwanda, a small country in east Africa, commemorated the 10
th
anniversary of a
genocide in which roughly 1 million people, or almost 11% of the population, had been killed.
Rwanda, one of the world’s poorest countries, was dependent on subsistence farming, coffee exports,
and international aid. Skilled human capital had either fled the country or been killed, and virtually
everyone had lost a family member or neighbor. Infrastructure was destroyed. While the genocide
had stopped in Rwanda, militia that committed the genocide were still operating in neighboring
Democratic Republic of the Congo, which meant that peace was not yet fully secured.
Paul Kagame, who led the forces that ended the genocide and had been elected president in the
first presidential elections in over a decade, faced daunting challenges. With the help of foreign aid,
the economy had grown rapidly but had barely regained the standard of living that it had in 1990.
Rwanda needed to mount a strategy to put the nation on a new economic trajectory.
Profile of Rwanda
Rwanda, “the land of a thousand hills,” was a landlocked country in the Great Lakes region of
east Africa with an area of just 10,169 square miles, slightly smaller than Maryland (see Exhibit 1). It
was bordered by Uganda, Tanzania, Burundi, and the Democratic Republic of the Congo (DRC,
formerly Zaire). (See Appendix A for a brief description of neighboring countries and their
economies.) Rwanda had a pleasant climate with two rainy seasons and two dry seasons and an
average daily temperature of 70 degrees Fahrenheit.
Rwanda, unlike most countries in Africa, had existed as a unified political entity prior to the
arrival of European colonizers. The Rwandan population comprised three socioeconomic groups: the
Hutu (about 85% in 2001), the Tutsi (14%), and the Twa (1%),1 a “pygmy” people who were
indigenous to Rwanda. The groups had mixed over time, and even after the genocide it was
estimated that at least 25% of the population had great-grandparents from both the Hutu and the
Tutsi.2 There were three official languages: Kinyarwanda, French, and English. English had only
recently become an official language, following the return of refugees from English-speaking
countries. Rwandan society had historically been devoutly religious, and the Catholic Church had
wielded substantial influence in Rwanda’s political development. About 50% of the population was
Roman Catholic, 27% Protestant, 12% Adventist, 2% Muslim, and the rest traditional religions in
2001.3
706-491 Rwanda: National Economic Transformation
2
In 2003, Rwanda had a population of 8.4 million.4 With 322 people per square kilometer in 2002, it
was the second most densely populated country in Africa.5 The capital and largest city, Kigali, had
about 600,000 inhabitants. The next largest city was Gitarama, with 85,000 inhabitants. There were 11
other cities with over 40,000 inhabitants. Outside of these cities, the remaining 83% of the population
was distributed roughly evenly across the country. Women accounted for 53% of the population.6
One-third of households were headed by women, and 220,000 children had lost at least one parent.
Rwanda had a gross domestic product (GDP) of roughly $1.7 billion in 2003. With an estimated
GDP per capita of $193 ($1,215 adjusted for purchasing power parity, or PPP), Rwanda was one of the
poorest countries in the world (see Exhibit 2 for comparative economic performance and labor
productivity data).7 An estimated 60% of the population lived in poverty. Most housing was of
adobe, often with corrugated metal roofing.8 The average life expectancy at birth was 49 years in
2001. The large rural population was engaged in subsistence agriculture. Commercial agricultural
production was dominated by coffee, tea, pyrethrum, and bananas. The country’s mineral resources
were modest, including small amounts of tin ore, tungsten ore, columbo-tantalite (coltan), gold, and
sapphires. Large natural-gas reserves were located underneath Lake Kivu near the DRC border but
remained largely unexploited.
Rwanda’s political system was restructured when a new constitution was ratified in May 2003.9
Legislative power rested with an 80-member elected National Assembly (Parliament) and a newly
created 26-member Senate, with a mix of appointed and elected members. The Forum of Political
Organizations was formally established in the new constitution as a forum to discuss policy and
resolve conflict within and between parties. Rwanda’s president was elected directly. The president
appointed and could remove the prime minister and a council of ministers. No party was allowed to
hold more than half of the positions in government. However, numerous “independent” parties held
allegiance to the ruling Rwandan Patriotic Front. The president and speaker of Parliament could not
belong to the same party. In the National Assembly, each of the 12 provinces was represented by at
least two elected women, and 30% of government posts were reserved for women.10
Members of Parliament held five-year terms, members of the Senate held nonrenewable eight-year
terms, and the president could hold up to two seven-year terms. Rwanda was divided into 12
provinces, 106 districts, 1,545 sectors, and 9,165 cells. Cell-level leaders were directly elected and
made up the administration at the sector level. Districts were headed by elected mayors, and each
province was administered by an appointed prefect.
History of the Rwandan Economy
Hutu and Tutsi populations had occupied east-central Africa since the late thirteenth century. The
historical basis of this division is uncertain, and it was possible for individuals to cross between
groups. Through an arrangement known as ubuhake, farmers pledged their services and those of their
descendants to a Tutsi lord in return for the loan of cattle and use of land. In the 1600s, the Tutsi King
Ruganzu Ndori extended the kingdom to cover most of modern-day Rwanda, as well as parts of
Uganda, the DRC, and Tanzania. Kings enjoyed absolute power. In 1895, Rwanda became a province
of German East Africa. The first missionaries arrived in Rwanda in the early 1900s, establishing
missions and schools, and introduced coffee farming. Churches came to be responsible for all
education in Rwanda.11
Colonization and Independence
After World War I, Belgium was granted the right to govern Rwanda, and the Rwandan king
ruled under the supervision of a Belgian “resident.” The Belgians strongly favored the Tutsi elite,
Rwanda: National Economic Transformation 706-491
3
through preference in schools and the civil service. However, the majority of Tutsis faced the same
hardships as Hutus. In 1935, the Belgian colonial administration started issuing identity cards that
categorized people as “Hutu,” “Tutsi,” and “Twa.” According to one account, Rwandans with 10 or
more cows were categorized as “Tutsi.” In 1943 local chieftains, who were mostly Hutu, were
replaced with Tutsi chiefs directly appointed by the king, and Tutsis held 95% of civil service jobs.
In 1956, the Rwandan King Rudahigwa demanded complete independence and the withdrawal of
Belgian occupation. The Rwandan National Union, a party consisting mainly of the ruling Tutsi elite,
was formed to pursue immediate independence. The following year, Gregoire Kayibanda, a Hutu
journalist, published the “Hutu Manifesto” demanding political power for the Hutu majority. With
the encouragement of the Catholic Church, he formed the Mouvement Démocratique Rwandais
(MDR) in 1959, also known as the Hutu Emancipation Movement (Parmehutu). Parmehutu pushed
for delayed independence. With escalating civil unrest, the Belgian administrators declared a state of
emergency and called in troops.
In 1959, the king died under suspicious circumstances in Burundi and, with the aid of the Belgian
military, there was a Hutu uprising—the first recorded instance of politically motivated mass ethnic
violence between Hutu and Tutsi—in which an estimated 100,000 Tutsis were killed and many more
forced into exile, including the new king, Kigeli V.12 The Belgian administration held local elections in
1960 that were overwhelmingly won by Parmehutu.
In June 1962 a UN General Assembly resolution granted full independence to Rwanda. Gregoire
Kayibanda became the president and prime minister. The economic union between Rwanda and
Burundi was abolished. The Rwandan franc was introduced in 1963, and the National University was
established. The new country had the third-lowest income per capita in the world. Rwanda quickly
became a single-party state with a highly centralized and authoritarian administration under the
control of Hutu elite from south-central Rwanda. France became Rwanda’s most important foreign
partner and its largest creditor and arms supplier.
Following independence, the state took ownership over all land. A quota system based on the
proportion of Hutu and Tutsi in the country determined access to education and employment in the
civil service, and it was virtually impossible for Tutsis to attain high-level positions in government or
the military. In 1963, Tutsi refugees attempted an armed incursion into Rwanda, which triggered
retaliatory massacres of Tutsis numbering in the tens of thousands.13 By the mid-1960s it was
estimated that half of Rwandan Tutsis lived abroad,14 mainly in Uganda, Burundi, Tanzania, the
former Zaire, Kenya, some European countries, and North America. Between 1972 and 1973, mass
killings of Hutus in Burundi led to reprisals against Tutsis in Rwanda. Many Tutsis were forced from
universities, the civil service, and private businesses, and many were killed.
Habyarimana and the Second Republic
On July 5, 1973, the Minister of Defense Major General Juvenal Habyarimana seized power,
abolished all political activity (including Parmehutu), and dissolved Parliament. Habyarimana
formed the National Revolutionary Movement for Development (MRND). In 1978, he established a
new constitution that confirmed him as president of a single-party state. Though the 1978
constitution allowed the president to hold only one five-year term, President Habyarimana was
reelected by a referendum in 1983 and again in 1988, winning 99.98% of the vote as the sole
candidate.
State control soon permeated every aspect of Rwandan society. An extensive secret service was
created. Jobs in the military and civil service went overwhelmingly to Hutus from Habyarimana’s
home region in northern Rwanda. The country was organized in 145 communities headed by
706-491 Rwanda: National Economic Transformation
4
“burgomasters” appointed by the president who had ultimate authority at the local level, including
control over land, local public staff, the police force, and access to education. Traveling and moving
between districts, as well as trade in goods and services, required government permission.
Habyarimana’s economic strategy was based on import substitution and industrialization, with
the intention of selling manufactured goods to neighboring countries. Heavy export taxes were set on
coffee to raise revenue. Rigid price and foreign-exchange controls were instituted. Agriculture as a
percent of GNP declined from 80% at independence to 48% in 1987. Manufacturing increased, though
90% of the inputs used in manufacturing were imported.
Though harassment of Tutsis declined, they continued to suffer systematic discrimination. A small
number of Tutsis managed to rise in the private sector and government. However, the Hutu
government refused to allow the return of Tutsi refugees. Many Rwandan refugees joined Yoweri
Museveni’s Ugandan National Resistance Army (NRA), and an estimated 3,000 of the NRA’s 14,000
soldiers were of Rwandan origin, many at senior levels. Among them was Kagame, who had fled
Rwanda with his family at the age of four and eventually became head of military intelligence for the
NRA. Kagame had a degree in professional management and business studies from the Open
University of London and had received military training in the U.S.
Compared to its neighbors, Rwanda at the time was perceived favorably by the international
community. “[We] used to compare the nearly idyllic situation in Rwanda with the post-Idi Amin
chaos in Uganda, the Tutsi apartheid in Burundi, the ‘real African socialism’ of Tanzania, and
Mobutu’s kleptocracy in Zaire, and we felt the regime had many positive points,” claimed one
German missionary.15 Rwanda had, relative to its neighbors, good roads, reliable electricity, water,
and telephones. The population had almost tripled since independence, reaching over 7 million by
the early 1990s.
Rwanda had received significant foreign aid since independence and was referred to as a
“development dictatorship,” a term used to describe countries considered development successes
despite the absence of democracy. Foreign aid rose from 5% of GNP in 1973 to 22% in 1991 and
accounted for more than three-quarters of capital expenditures. Aid-financed projects were successful
in several areas. Health care improved, and infant mortality was reduced. Aid also financed
reforestation and land reclamation, and agricultural productivity increased. High world prices for
coffee, tea, and tin, the three core Rwandan export products, created rising wealth. Rwanda rose to
19
th
from the bottom in terms of per capita income. (See Exhibit 3.)
However, real PPP-adjusted GDP per capita in Rwanda had stagnated since 1980. The country still
ranked below the sub-Saharan average in life expectancy, child survival, adult literacy, years in
school, nutrition, and per capita GNP. Primary-school enrollment had dropped to 51% in 1992, and
secondary schools only had capacity for 10% of primary-school graduates.16 Access to safe drinking
water had also declined.
In 1985, there was a collapse in the tin market, Rwanda’s second-largest foreign-exchange earner,
followed by famines in 1987, 1989–1990, 1991, and 1993. Coffee prices fell by 50% in 1989, and coffee
exports fell from $144 million in 1985 to $30 million in 1993. Falling coffee prices also weakened the
government’s financial position, as it guaranteed coffee prices to farmers through the Coffee
Equalization Fund. The budget deficit tripled between 1989 and 1990 and remained at 7% or more of
GDP through 1993. Real GDP fell by 10% between 1989 and 1993, and inequality increased as the
percentage of income held by the top 10% rose from 10% in 1982 to 41% in 1992.
Development aid continued to increase. In September 1990, the government undertook a
structural-adjustment program with the assistance of the International Monetary Fund (IMF) and the
Rwanda: National Economic Transformation 706-491
5
World Bank that brought $216 million in pledges of new aid. Despite strong domestic opposition, the
currency was devalued, leading to sharp price increases. Social expenditures were slashed, and civil
service wages were frozen. Fees were increased for schools, health care, and utilities. In 1993, 86% of
the population was living beneath the poverty line, the highest level of poverty in the world. Much of
the promised aid was cancelled. Donors cited the government’s failure to meet conditions including
the elimination of coffee price guarantees and reduction of the budget deficit to 5%, but many
observers suspected political motivations.
Civil War
As Rwanda was mired in economic crisis, the civil war in neighboring Uganda ended when the
NRA successfully overthrew the government in 1986. The next year, Rwandans who had served in
the NRA joined forces with other Rwandans in exile to form the Rwandan Patriotic Front (RPF).
Despite pressure from the international community, the between 600,000 and 1 million Tutsis in
exile were not allowed to return to Rwanda. In October 1990, RPF forces under the leadership of
Kagame invaded Rwanda. With the support of troops from France, Zaire, and Belgium, as well as
diversion of aid flows to the military with the approval of the IMF, the Habyarimana government
was able to negotiate a cease-fire in March 1991.
Under substantial international pressure, Habyarimana agreed, in 1991, to allow other political
parties and to hold elections. In addition to Habyarimana’s MRND, 14 new parties were formed, and
a coalition government (not including the RPF) was established in 1992, though Habyarimana
continued to resist power sharing. Extremist government leaders from the north, facing threats to
their power, began inciting ethnic hatred against Tutsis. The newly liberalized media, including more
than 20 newspapers and a new radio station, was filled with anti-Tutsi rhetoric.
Hutu extremists and elements of the Rwandan army started organizing civilian militias, the most
notorious of which was the MRND’s interahamwe, to attack political opponents and Tutsis. Extremists
in the Hutu government and the army, the interahamwe, and other civilian militias became a
movement known as “Hutu Power.” Organized massacres of thousands of Tutsis were carried out
between 1990 and 1994, with active encouragement by the police and the army. The UN Commission
on Human Rights declared in 1993 that the government was involved in killings that were “genocidal
in nature.” In response, the RPF renewed fighting in February 1993 but pulled back under
international pressure to resume peace talks.
The new coalition government agreed to peace negotiations in Arusha, Tanzania. The August 4,
1993 Arusha Accord provided for the return of refugees, the formation of a power-sharing
government of national unity, the integration of the two armies, and the stationing of 2,500 UN
troops in Kigali. The Habyarimana government signed the Arusha Accord under the threat of foreign
aid cuts, but implementation soon stalled. The training and equipping of militias were accelerated,
and anti-Tutsi propaganda increased. Nongovernmental organizations (NGOs), foreign diplomats,
and UN personnel began warning of an imminent catastrophe.
The Genocide and its Aftermath
In early 1994, rumors spread that Habyarimana was about to finally implement the Arusha
Accords and that there were plots to assassinate him. As Habyarimana returned to Rwanda with
President Ntaryamira of Burundi from a meeting in Dar es Salaam on April 6, his plane was shot
down by unknown attackers, killing both presidents. Within hours of the assassination, Hutu Power
took control of the government, and the interahamwe and the Rwandan army began killing Tutsis,
opposition politicians, and moderate Hutus based on “death lists” that had been prepared in
706-491 Rwanda: National Economic Transformation
6
advance. Large-scale killings commenced shortly thereafter, and over 800,000 Tutsis and moderate
Hutus were killed in three months. Over three-quarters of the Tutsi population were killed.17
On April 8, the RPF launched a major offensive to stop the genocide and take control of the
country. Despite strong protests by the UN force commander in Rwanda, Lt. Gen. Romeo Dallaire,
UN headquarters ordered the forces stationed in Rwanda not to intervene. Following the murder of
10 Belgian peacekeepers, UN forces were sharply reduced. France continued providing arms to Hutu
Power forces until June 1994.18 In June 1994, France received UN Security Council approval to create
a safe zone in southwestern Rwanda. Though some Tutsis were saved, this step enabled the Hutu
Power leadership and armed forces to escape into Zaire. By July 1994, the RPF had established
control and ended the killing in most of the country. UN forces were able to prevent the killing of
approximately 20,000–25,000 Rwandans.
Oxfam provided large-scale portable water projects in Ghana and elsewhere. The World Food
Program established a transportation corridor through Tanzania for cost-effective transport of food to
southern Rwanda. NGOs effectively rehabilitated primary health clinics, with the assistance of the
World Health Organization and UNICEF. Despite scattered attempts at coordination, the
humanitarian response was characterized by lack of coordination at all levels: between aid agencies,
politicians, and the military; between different aid agencies; and within aid agencies. Agencies
followed refugee movements reactively but did not proactively plan in anticipation of likely
movements and often did not share information about refugee movements with other agencies,
further hindering effective planning. Coordination among the various UN agencies was also poor, as
they were in competition for authority and resources from UN headquarters, which was in turn
divided into factions by its constituent member states.
Roughly 2 million Hutus fled to neighboring Burundi, Tanzania, Uganda, and Zaire. A
transitional Government of National Unity, designed along the lines of the Arusha Accords, was
established in July 1994 under President Pasteur Bizimungu, a Hutu member of the RPF, and Vice
President Kagame. The new government included representatives of five major political parties, with
the RPF and the Mouvement Démocratique Rwandais (MDR) dominant. A transitional National
Assembly was also established, comprising representatives of all the political parties except for the
most extreme anti-Tutsi party.
Following the installation of the new government, about 800,000 exiles, mainly Tutsis from
previous conflicts, returned to Rwanda. Some of the refugees had grown up in the English-speaking
countries, Uganda, Kenya, and Tanzania, and in North America, and English started to be taught in
schools in 1995. The Government of National Unity encouraged Hutu refugees to return and
guaranteed that their homes and lands would be returned. Members of the former MRND army were
assimilated into the RPF army or demobilized and reintegrated into the population.
Remnants of Hutu Power established control over refugee camps in Zaire and Tanzania after the
genocide ended, controlling relief funds and preventing refugees from returning. The camps became
bases for attacks into Rwanda, leading to hundreds of deaths and the displacement of thousands of
civilians.19 Zaire President Mobutu was accused of providing arms and other support to the
insurgents. The new Rwandan government repeatedly called for international intervention to stop
these acts, but to no avail. In 1996, the Rwandan government supported a Congolese rebel group, led
by Laurent Kabila, in taking power and disbanding the refugee camps. Approximately 1.2 million
Hutu refugees returned to Rwanda from the DRC, while the Tanzanian government forced 500,000
refugees to return to Rwanda. When President Kabila broke off ties with the RPF in 1998, Rwandan
and Ugandan forces again entered the DRC. A complex war ensued in the DRC involving four other
African countries, three Congolese rebel movements, and a number of renegade forces. In August
Rwanda: National Economic Transformation 706-491
7
1999, the governments and rebel groups signed the Lusaka Agreement to stop the DRC war and
committed to a framework for peace.
Trials of genocide perpetrators began in early 1997 at the UN International Criminal Tribunal for
Rwanda in Arusha. However, trials proceeded slowly, and the tribunal was criticized for
mismanagement.20 Prisons in Rwanda were crowded with an estimated 100,000 people accused of
having participated in the genocide. The local legal system was in shambles, with many lawyers and
judges having been killed. The government created the gaçaça process, whereby communities
gathered to hear the cases of prisoners from their area and decide the sentences. In October 2001,
260,000 gaçaça judges were elected, and initial trials began in June 2002. In February 2003, the
government released 30,000 prisoners who had confessed or who had already spent more time in
prison than the maximum sentence of the crime of which they were accused.
Starting Reconstruction
Rwanda’s civil war had devastated the country’s economy. In 1994, the economy shrunk by 50%,
inflation was 64%, and per capita income dropped to $143 ($673 PPP-adjusted).21 Government
institutions were completely devastated. Property and infrastructure had been destroyed on a
massive scale. The country’s population had fallen to 5.1 million in 1994. Skilled professionals had
been particularly targeted in the killings. In addition to the 2 million refugees abroad, there were
900,000 displaced persons within Rwanda, and almost half of Rwandan children had lost at least one
parent.22 With few trained professionals in the country, the RPF, Vice President Kagame in particular,
spent considerable effort recruiting skilled Rwandans living abroad to return and take key leadership
positions in the government. Many government officials worked for months without pay.
The international community initiated a massive humanitarian relief effort. In 1994, $1.4 billion of
aid was disbursed by over 20 bilateral and multilateral donors and was implemented by eight UN
agencies and approximately 250 NGOs. In 1995, Rwanda received more than $705 million in aid,
54.5% of Rwandan GDP.23 The majority of foreign aid attributed to Rwanda between 1994 and 1997
went to refugee camps in Zaire and Tanzania. Most of these funds were channeled through
international NGOs or went to community groups. Aid was generally effective in preventing mass
famine and an outbreak of epidemics.
One of the new government’s highest priorities was to establish a new Rwandan identity that was
not based on ethnicity. The National Unity and Reconciliation Commission was established in
December 1999. With the help of USAID, the government issued new identity cards without ethnic
designations. A new national flag and national anthem were introduced in 2001.
The new government also started implementing macroeconomic reforms. Inflation was quickly
brought under control, and reforms were implemented to improve public administration and
budgeting and financial management and to stimulate private-sector development. Inflation fell from
64% in 1994 to 2.5% in 2002, though it fluctuated substantially. Wage controls and price controls on
most goods were dismantled, though they remained on cement and utilities. Petroleum prices were
allowed to fluctuate with world prices beginning in 1999.
The exchange rate was fully deregulated in 1995 when a fluctuating exchange-rate system was
implemented and 20 foreign-exchange bureaus were licensed. Bank interest rates were deregulated.
In 1997, several steps were taken to give the central bank greater independence. A cap of 11% was
imposed on government borrowing from the central bank. Treasury bill auctions commenced in 1998,
giving the National Bank a tool to control the money supply and interest rates. A system of public
accounts was developed to prepare public reports of government operations in 1998. In 1999, a new
706-491 Rwanda: National Economic Transformation
8
banking law was introduced, liberalizing much of the banking sector. Rwanda’s five commercial
banks, of which the state owned one and held shares in another, were audited and restructured.
A new income tax law was passed in 1997. The maximum personal income tax and corporate
income tax rates were reduced from 50% in 1997 to 40% by 1999. Excise taxes on soft drinks, alcohol,
and cigarettes were increased in 1998. In 1998, the Rwanda Revenue Authority was created to
strengthen the collection of taxes and customs duties. In 1999, state-owned enterprises (SOEs) were
required to pay income taxes. In order to encourage coffee production, the coffee export tax was
removed in 1999. Rwanda switched from a sales tax, plagued by numerous exceptions, to a valueadded
tax (VAT) with exemptions for a few basic necessities in October 2000. It was believed that the
old system favored many imports over domestic production and that the new system would reduce
the tax on domestic production. The VAT was raised from 15% to 18% in early 2003, while the
maximum personal and corporate tax rates were further reduced to 35%. Government efforts at
improving revenue collection were successful, as government revenues rose from 7% of GDP in 1995
to 13% in 2003.24
Government social expenditure, particularly in education and health, went up from 24% of the
recurring government budget in 1998 to 38% in 2001. The government had two budgets, a recurring
budget and a development budget. Women were given the right to own and inherit property in 1999,
and seats were reserved for women in local committees and in the National Assembly. A five-year
Gender Action Plan was commenced in 2000 to eliminate gender disparities. Rwanda faced an acute
housing shortage given the destruction during the civil war and the return of Tutsi and Hutu
refugees. The government issued a National Habitat Policy in 1996. The policy, known as imidugudu,
focused on creating villages as opposed to the traditional system of farmers living directly adjacent to
their lands. With the aid of donors and NGOs, four villages were created. Human rights groups
claimed that there were frequent instances where people were resettled involuntarily or lost land,
and the program was later downscaled.
Rwanda started to open its economy and joined the World Trade Organization (WTO) in 1996. In
1998, maximum tariffs were reduced from 100% to 40%, and tariffs were removed altogether on many
categories of goods. In 2000, the Internal Trade Act removed the last remnants of government control
on trade among Rwandan provinces. In 1998, the National Tender Board was set up to establish and
enforce procurement rules and serve as the central government procurement agency. In 1999, the
Office of the Auditor General was created to undertake fiscal audits of ministries and companies
owned by the government to limit corruption. At the same time, civil servant wages were increased
by an average of 40%. In the first year, 6,000 fictitious workers were removed from the government’s
payroll, and 6,000 employees were fired on the grounds that they were unqualified. By 2003, audits
were conducted every two years for ministries, and it was planned that all ministries, SOEs, and
major projects be audited annually. An Anticorruption Commission was created in 1999, and the
government became active in investigating allegations of corruption, resulting in numerous
resignations. The government issued a code of conduct and disclosure rules for officials in 2001. In
2004, the Office of the Ombudsman was created to investigate corruption, and public officials were
required to declare their wealth. In March 2004, more than 139 police officers were fired on charges of
corruption.25
The new government inherited a number of SOEs, from utilities, to banks, to agricultureproducing
enterprises. In 1996, the government created a legal framework for privatization and
embarked on a privatization campaign in 1998. The president, along with a few ministers and
advisors, was actively seeking investors and promoting the country internationally. By 2003, the
Privatization Secretariat had sold 48 SOEs, several to foreign investors, and eight enterprises were in
the final stages of privatization. Seven enterprises had been shut down, and an additional 27
Rwanda: National Economic Transformation 706-491
9
remained to be privatized (see Appendix B). 26 In 2003, at the urging of the World Bank, foreign
consultants were awarded a five-year contract to manage and improve the operations of Electrogaz,
the company that provided electricity, gas, and water.
In 1998, legislation was passed exempting foreigners who invested $100,000 or more in Rwanda
from import and sales taxes when importing equipment. Foreign investors were given legal
protection and access to work permits and allowed to import vehicles and personal items duty and
sales tax free and also to recruit up to three expatriate workers. There were no restrictions on foreignexchange
earnings from exports except for tea and coffee exports, where 90% of earnings had to be
exchanged in Rwandan commercial banks.27 Foreigners could invest in any sector of the economy.
In 1999, the government replaced the state-controlled chamber of commerce with the privately run
Rwandan Private Sector Federation (RPSF), consisting of 14 professional associations. The RPSF met
with the government four times a year (two meetings chaired by the prime minister and one chaired
by the president) to discuss ways to improve the business environment and develop the private
sector. The RPSF helped create a tax appeals court and an arbitration center for labor disputes in
1999.28
In June 2000, the government set up the Rwandan Investment Promotion Agency (RIPA) to create
incentives for new investors and to provide a “one-stop-center” to assist investors with approvals,
certificates, and land. RIPA was housed together with the RPSF and the arbitration center. RIPA
began to plan a free-trade zone and a free-export-processing zone to attract investors wanting to
serve the regional market, a project that remained incomplete in 2004. Approximately 100 new
investors had entered Rwanda by 2001. Overall, Rwanda had attracted $30.6 million in foreign direct
investment between 1995 and 2002.29 The government held Rwanda’s first investment and trade fair
in 2003.
A law reform commission was formed in 2000. The legal and judiciary system had not been
revised since the Belgian system was adopted at independence. During the 1990s, less than 10% of
lawyers and judges had law degrees, and many had been given their positions by the Catholic
Church. A new labor code was created in 1999 that prohibited gender discrimination, restrictions on
labor mobility, and wage controls. The code made it possible for employers to fire nonperforming
staff and employ expatriates and guaranteed maternity leave and other basic benefits. In 2001, the
National Assembly created a regulatory law that covered public utilities (telecommunications,
electricity, gas, and water). A regulatory agency was created to grant licenses, enforce regulations,
prosecute anticompetitive behavior, and enforce standards. In 2004, the commission implemented a
mix of civil and common law, and 90% of those lacking requisite degrees were relieved.
To supplement several existing private Catholic universities in various provinces, the private
Kigali Independent University and the Kigali Health Institute were created in 1996, and the Kigali
Institute for Science and Technology (KIST) and the Kigali Institute of Education were founded in
1997. KIST introduced a new business management program in 2000. The government sponsored
several hundred Rwandan students to attend computer and software training in India. A School of
Finance and Banking, affiliated with the Ministry of Finance and Economic Planning, was created in
June 2002. KIST also became an Internet services provider (ISP), competing with government-owned
Rwandatel. Internet cafes in Kigali proliferated, and Internet usage rose dramatically.
Assistance from International Aid Organizations
In July 1994, the World Bank issued a grant of $20 million to Rwanda. Many projects that had been
initiated prior to the genocide were restructured to support reconstruction. An emergency recovery
credit of $50 million was approved in early 1995. International aid to Rwanda continued at a high
706-491 Rwanda: National Economic Transformation
10
level, with NGOs constituting the second-largest source of employment in Rwanda in 1996. The focus
of international assistance shifted over time to rebuilding the nation’s social and economic
infrastructure, developing institutional capacity, and providing economic stimulus. Donors strongly
approved of the new government’s commitment to economic reform and reducing aid dependency
but criticized the high level of military expenditure. Rwanda was seen as a case requiring long-term
aid to secure peace and reduce poverty and a situation where more aid than normal should be
directly controllable by the government. (See Exhibit 4.)
Between 1995 and 1999, the government held a series of “round table conferences” in Europe with
all major donors to review progress in reconstruction, discuss policy choices, and appeal for aid.
Three such meetings were held in 1995, and they continued with less frequency through 1999. While
meetings often led to significant pledges from donors, actual aid fell short of the amount pledged. By
1997, a total of $2.5 billion had been spent on refugee camps since the genocide, while $572 million
had been spent on Rwanda itself.30 However, with the cost of camps rising to over $1 million a day, in
1996 donors, led by the United States, pushed for closing the refugee camps and encouraging
refugees to return. The World Bank initiated the Emergency Reintegration and Recovery Project with
a loan of $94 million in July 1997 and provided an additional $45 million for transport. In 1999, a new
three-year, $75 million World Bank loan program was approved.31
The European Commission provided $159 million to Rwanda between 1995 and 2000 through the
European Development Fund (EDF). Funds were used to rebuild road infrastructure ($29 million),
rehabilitate tea and coffee production ($27 million), support the budget and balance of payments
($25 million), rebuild the health and education system (19 million), and repair the Kigali Airport
($8 million). Starting in 2000, $57 million went for infrastructure projects, $23 million for institutional
development, $22 million for budget support, and $11 million to rehabilitate the facilities of the
Ministry of Justice and the National Assembly. An additional $7 million for rural microcredit
programs was pledged but not disbursed. In 2003, the next EDF program allocated $200 million, of
which $67 million was for rural development, $54 million for budgetary support, and $67 million in
reserve for emergency aid.32
The U.K. Department for International Development (DFID) made a commitment in April 1999 to
provide financial aid over a 10-year period in exchange for progress in key areas including national
unity and reconciliation, the resolution of conflict, good governance, poverty reduction,
macroeconomic stability, and human resource development. A lengthy memorandum of
understanding detailed the specific conditions under which DFID would withdraw aid if it felt the
government did not fulfill its commitments. DFID’s support was particularly valued by the
government because the great majority went directly to the government to be allocated according to
the government’s own priorities. DFID became Rwanda’s largest bilateral donor, providing $248
million between 1997 and 2003, of which $173 million went directly to the government budget.33
USAID observed a policy of not providing aid funds directly to any recipient government but
funding and implementing projects independently.
Overall, between 1995 and 2001, donors pledged a total of $3.9 billion to Rwanda and disbursed
roughly $2.7 billion. Total aid per capita averaged $59 between 1995 and 2001, falling to $37 in 2001 as
aid for humanitarian assistance and reconstruction abated. As a percent of GDP, aid decreased from
54% in 1995 to 17% in 2001.34 Aid was managed on a project-by-project basis by a small team within
the Ministry of Finance and Economic Planning. While Rwandan government officials were
concerned that some promised aid had not materialized, their greatest concern was the large share of
aid that went to refugee camps outside of Rwanda.
Rwanda: National Economic Transformation 706-491
11
A New Development Strategy
Between 1995 and 2000, the Rwandan economy recovered at a rapid pace. After growing 35% in
1995, the economy grew at an average rate of 9.8% per year, and in 2000, Rwanda surpassed 1990
GDP levels for the first time. Less than 40% of prewar industries had resumed operations by 1999.
However, growth was slowing. With an increase in world oil prices, drought, pressures due to the
conflict in the DRC, and a reduction in international aid, growth fell to 6% in 2000. Exports grew to
$93 million in 1997, reaching their 1990 level, but fell again with the collapse of world coffee prices
(see Table B). In real dollar terms, the price of coffee dropped 20.7% between 1990 and 2000, while
the price of tea declined 6.4%.35
Rwanda held local elections in 1999, its first since 1994. The elections were praised by
international observers for being fair, and there was high voter turnout. In March 2000, President
Bizimungu resigned following charges of ethnic divisionism, and anticorruption investigations led to
the resignations of the parliamentary speaker, three cabinet ministers, and the prime minister.36 In his
place, Kagame, vice president and minister of defense, was unanimously elected president by the
National Assembly. A new cabinet was appointed, and a commission to create a new constitution
was formed in 2000. Government decentralization was initiated in May 2000, and mayors were
elected to administer Rwanda’s 106 districts in March 2001.
President Kagame began a process for developing a long-term strategy for economic
development. Starting in April 2000, consultations were held across all regions and sections of
Rwandan civil society to formulate a long-term vision for Rwanda. With the encouragement of the
World Bank, the Rwandan government involved an outside consulting firm to advise on the strategy.
With the president personally driving the initiative, the Vision 2020 National Development Plan was
created. Ambitious goals were set forth.37 (See Exhibit 5.)
With the strong encouragement of the World Bank and the IMF, the government shifted its
attention to the preparation of a poverty reduction strategy paper (PRSP). Such a paper was a
requirement under a new World Bank model to qualify for further development aid and debt relief
under the Heavily Indebted Poor Country (HIPC) Initiative. Poverty reduction had been adopted as
the World Bank’s central goal. The preexisting Ministerial Commission for Reform, headed by the
prime minister and other key members of government, was converted into the Commission for
Poverty Reduction. National surveys were begun to collect household data.
All major international donors participated in the PRSP process, and Rwanda was commended for
its high level of commitment to the effort. The PRSP, which overlapped substantially with the
National Development Plan, was finalized in June 2002 and set a goal of 6% to 7% annual GDP
growth, a reduction of households in poverty to 30% in 2015 (from 60% in 2001), and a variety of
other social goals consistent with the UN Millennium Development Goals. The Development Partners
Coordination Group (DPCG), consisting of government representatives and the heads of all bilateral
and multilateral agencies active in Rwanda and chaired by the UN resident coordinator, was
established in 2002 to facilitate coordination of donor and government activities toward these goals.
The DPCG launched working groups in which one or two donors would assume a leadership role
and coordinate the efforts of all donors in discrete areas such as health, education, and private-sector
development.
As a result of the PRSP, the World Bank funded projects to support rural development ($50
million) and to promote competitiveness and enterprise development ($41 million), institutional
reform ($85 million), and a project to combat HIV/AIDS ($32 million). The World Bank also funded a
$53 million project to demobilize and reintegrate troops returning from the DRC.38 Rwanda’s external
debt was $1.2 billion, equivalent to 63% of GDP in 2002. Rwanda received approval for the HIPC
706-491 Rwanda: National Economic Transformation
12
debt-relief program in mid-2002, based on its level of poverty and indebtedness, its satisfactory
performance on previous IMF adjustment programs, and its preparation of an approved PRSP.
Donors began to partially forgive Rwanda’s debt, but the relief would not be full and irrevocable
until Rwanda fulfilled additional conditions.39
In 2001, the government had created a strategy to boost competitiveness, termed the “Rwanda
National Innovation and Competitiveness program” (RNIC). (See Table A.) Working with local
leaders, three key sectors were identified—coffee, tourism, and tea—on the basis that they had the
potential to generate $1.3 billion in revenue by 2010 with an investment of $293 million. The study
also covered two supporting sectors, telecommunications and financial services, judged to be
necessary for the others to be successful.
Table A Summary of the Rwanda National Innovation and Competitiveness Program
Sector Product Development Marketing Institutionalization
Coffee • Build washing stations in top 50
producing districts ($12 million)
• Improve extension services for
coffee farmers and associations
• Replant aging tree stock and
introduce new varieties
• Create quality control
systems
• Create systems to provide
info on local and intl. coffee
market
• Promote Rwandan coffee
locally and abroad
• Establish a coffee culture in
Rwanda
• Create new coffee
organizations and institutions
• Establish Internet presence
• Provide financial framework
for microfinance and credit
for washing stations
Tourism • Develop attractions and
infrastructure in 7 tourism regions
• Build high-standard rooms outside
of the capital
• Improve existing rooms
• Open new restaurants and improve
current ones
• Procure equipment for guides and
tour operators
• Promote Rwanda as a global
tourist destination
• Promote tourism-related
training in secondary schools
• Promote training for customer
service staff, guides, and
drivers
• Implement a conservation
plan
Tea • Diversify into new teas
• Create tea nurseries and research
into new varieties
• Support tea inputs (fertilizer,
pesticides, etc.)
• Train planter associations and
cooperatives
• Build transportation infrastructure
• Improve capacity at tea factories
• Procure equipment for flavoring
teas, blending, and packaging
• Ensure electricity supply and
reduce electricity cost
• Conduct local and
international promotional
campaigns
• Train tea makers
• Switch to direct sales
• Target markets for direct
sales
• Strengthen associations and
tea cooperatives
• Continue privatization
Source: Rwanda National Innovation and Competitiveness Program: Executive Briefing, July 2002.
Rwanda in 2004
Rwanda adopted a new constitution in May 2003, endorsed in a national referendum, paving the
way for presidential and parliamentary elections. The constitution guaranteed civil liberties and
Rwanda: National Economic Transformation 706-491
13
human rights, and propagating ethnic or regional divisions was forbidden. All parties were required
to reflect national unity and could be banned if they promoted an ethnic identity over national
Rwandan identity.40 Direct presidential elections were held for the first time since 1994 in August
2003, and Kagame was elected with 95% of the vote. Some foreign observers criticized the short
amount of time available for campaigning and the exclusion of the main opposition party, the MDR,
which was accused of reverting to the ethnic ideology. In April 2003, the interim parliament found
the MDR guilty of divisionism, and it was dissolved.41 An independent newspaper claimed to have
been harassed and prosecuted by the government, and several reporters were imprisoned in 2004.42
Parliamentary elections were held in October 2003. The RPF received 73% of the vote with 99% of
the 3.5 million eligible voters participating. The other two main parties, the SDP and the Liberal
Party, both supporters of Kagame in the presidential elections, received 12% and 10% of the vote,
respectively. A few observers, notably the European Union (EU), raised concerns about signs of fraud
and irregularities in some areas.43 Following the elections, 39 of Rwanda’s 80 members of Parliament
(MPs) were women, the highest ratio of women MPs in the world. Overall, Rwanda’s government
was known in international circles for its lack of corruption.
In 2002 the Rwandan economy had grown by 9.4%. In 2003, growth fell to 3.2% as agricultural
exports dropped by 30% due to adverse weather conditions and weak international prices for tea and
coffee. Delays in aid disbursements by the EU and the World Bank due to their concerns over the
Rwandan government’s fiscal deficit forced the government to borrow on the domestic market,
raising inflation.44 The government’s development budget for 2004 was at $166 million, 25% higher
than the year before. International donors financed 70% of the budget, down from 93% in 1999. (The
composition of the budget in 2002 and 2003 is shown in Exhibit 6.)
Land and physical infrastructure The government owned all land in Rwanda, and property
rights were distributed to citizens only when structures were built. In practice, land use in Rwanda
was highly fragmented, and effective ownership of land depended on occupying it. However, the
government was drafting new land legislation to enable private ownership and the consolidation of
land holdings as part of its strategy for agricultural development.
Rwanda’s 14,000-kilometer network of roads was one of the densest in Africa. Over 1,000
kilometers of roads, mainly between cities, were paved and being rehabilitated with EU funding.
Rwanda’s mountainous terrain and heavy rainfall increased road maintenance costs to twice the subSaharan
African average. Transportation and logistics costs were among the highest in Africa, as
imports and exports had to travel through other countries.45 There was no national railway system,
and Rwandan exports had to be transported 1,500 kilometers northeast through Uganda to Mombasa,
a route favored for its efficient Kenyan haulers, or southeast to Dar es Salaam (Tanzania), which
offered a less crowded port but lengthy unpaved road segments and unreliable railway services.
Typical transport rates from these ports to Kigali were $165 per ton, versus $95 per ton to Kampala.
Such transport typically took four weeks, but delays of up to two months were not uncommon, due
in part to manual customs processes in Kenya and Tanzania. The government hoped to build a
railway between Kigali and Isaka (Tanzania), but the World Bank calculated that low volume of
goods along the corridor might not justify the $750 million investment required. In Rwanda, five
private transport companies operated one to four heavy trucks each, while an estimated 10,000
pickups or small trucks could carry smaller loads. Trucks often returned to the port empty, as export
volumes were much lower than import volumes. Two small domestic airlines provided service
within Rwanda and to neighboring countries. There were regular flights to Nairobi (Kenya),
Bujumbura (Burundi), Addis Ababa (Ethiopia), Dar es Salaam (Tanzania), and Johannesburg (South
Africa). SN Brussels Airlines provided the only direct intercontinental flight from Kigali, to Brussels.
Airport facilities were believed to be adequate for the foreseeable future.
706-491 Rwanda: National Economic Transformation
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No investments in energy had taken place since 1990, and there had been little maintenance of
generation and transmission assets except for emergency rehabilitation after 1994. Three hundred
large customers represented 70% of demand. All energy customers paid the same subsidized rate,
regardless of volume and peak/off-peak time of use. The Mukungwa and Ntaruka dams, operated
by Electrogaz, provided 24 megawatts (MW) of capacity under typical conditions, or 42% of
Rwanda’s total installed and imported generation capacity of 57 MW. An additional 15 MW (26%)
was imported from the Rusizi Dam shared with the DRC and Burundi, and several smaller hydro
and thermal stations contributed the remainder.46 Due to the conflict in neighboring countries and
varying lake levels, the electricity supply was volatile. Electricity costs were three to four times higher
than in neighboring countries because of the need to rely on generators. The poor quality of the
energy distribution network also resulted in transmission losses of 25%. Less than 2% of households
had electricity, and almost 80% of Rwanda’s fuel came from wood and charcoal. Widespread usage of
wood for cooking had led to severe deforestation in some areas, and the government had issued a
decree strictly regulating wood use. The World Bank was exploring the possibility of establishing
“microhydro” generation in rural communities independent of the main electricity grid. Imports of
oil and petroleum amounted to $37 million in 2002. The state-owned PetroRwanda, the national fuel
company, was privatized in 1998, selling its gas stations to Shell Uganda. There were an estimated 60
billion square meters of natural gas under Lake Kivu. It was estimated that these reserves were
sufficient to supply at least two plants generating 34 MW each at an estimated cost of $0.05 per
kWh.47 A pilot project from the 1960s was still operational and provided small amounts of power to
the nearby Bralirwa brewery. The government was in final negotiations with investors to develop gas
production to generate sufficient electricity to satisfy Rwanda’s power needs.
In 2001, a 20-year National Information and Communications Infrastructure program was
launched to transform Rwanda into a knowledge-based economy by 2020. In the first phase, from
2001 to 2005, all government ministries and agencies were to be connected to the Internet for the first
time, and their data and communication systems were to be integrated.
Rwanda had 25,000 telephone lines in 2004, 90% of which were in Kigali. Roughly 550 telephone
lines were located in rural areas. The government was seeking a strategic investor to acquire
Rwandatel, the state-owned telecommunication provider. Mobile phone service was offered by
Rwandacell, a joint venture between the private Telstar (50% ownership), Rwandatel (25%), and
South African MTN (25%). There were 161,000 mobile subscribers in 2004, up from 78,000 in 2001.48
The service extended across most major towns and into the eastern DRC. Rwandacell had
implemented a pay-as-you-go system, which lowered initial costs and speeded adoption. Internet
access was known to be expensive and unreliable. Internet service provision had been deregulated,
however. In 1998, most government ministries and agencies had no access to the Internet.
Human resources Rwanda faced a severe shortage of skilled workers after years of civil war.
Roughly half of adult Rwandans were literate, but it was estimated that 1 million youths were
unskilled and 44% of the population was under the age of 15. Optimistic estimates put two-thirds of
the agricultural labor force as underemployed. Only about 200,000 jobs were believed to exist outside
of agriculture.49
Education spending accounted for 24% of government expenditure (4.3% of GDP) in 2004. Fees for
primary education were eliminated in 2003, and enrollment increased dramatically. Facilities were
insufficient for the rapid increase in enrollment, and over 650 makeshift classrooms were established
under trees or plastic sheeting.50 In 2004, Rwanda had a gross primary-school enrollment rate of over
100%, higher than the sub-Saharan average. Secondary-school enrollment was low at 10%. At the
secondary level and above, there were few students from the poorest households. The quality of
education was still poor but improving. Only half of secondary-school teachers were trained. The
Rwanda: National Economic Transformation 706-491
15
curriculum was perceived by some to be outdated and poorly connected to the economy. A new
national syllabus and examination system had been under development for many years. French and
English were supposed to be taught, but in practice this depended on the skills of the teacher. In 2003,
enrollment in tertiary education was up slightly to 2%, having significantly increased despite fees. In
2003, there were seven universities, with over 10,000 students, all located in Kigali and Butare, up
from under 1,000 in 1994.51 Despite the founding of the Kigali Institute of Science and Technology in
1997, there was little vocational training, and school curricula were not well connected to the labor
market. Roughly one-third of government spending on education in 2004 went to tertiary education.
Of those enrolled at the tertiary level, 74% were men. Overall, 7.1% of the population had education
beyond primary school and 0.4% of the population had a tertiary education.52
Labor unions were seeking a National Labor Commission, maternity leave at two-thirds of regular
salary, health and safety committees in workplaces, faster arbitration, and a labor court. Rwandan
workers often took labor issues to the courts, driving up costs.
Health The top causes of premature death in Rwanda in 2002 were HIV/AIDS (23,000),
respiratory infections (16,000), diarrhea (13,000), perinatal conditions (8,000), and tuberculosis
(5,000).53 An estimated 8%–9% of the adult population was infected with HIV/AIDS; the proportion
was higher in Kigali. Despite attempts at educating the public, condom use was believed to be less
than 10%. Patients with AIDS occupied 80% of hospital beds.54
The health-care system had been rebuilt since 1994. The health-care management system had been
decentralized, and the government promoted community health insurance schemes whereby villages
would pay under $10 per year for access to state health care. Rwanda had the region’s highest access
to health care at 87% of the population, but there were only two doctors and 18 paramedics per
100,000 people. Health care accounted for 5% of government spending in 2001, which, despite
increases, was below the regional average. International donors had paid for 60% of total health-care
expenditures and all capital investment in the health sector.
Financial markets All commercial banks had been audited between 1999 and 2002, paving the
way for annual inspections from 2004 onwards. Since 1999, Rwandan commercial banks were
required to have minimum reserves between $631,000 and $3.2 million, while development and
merchant banks had reserve requirements of $1.1 million. The share of bank loans deemed nonperforming
fell from 40% in 2002 to 27% in 2004. Recovery of nonperforming loans was difficult due
to lengthy legal procedures and weak enforcement.
In 2001, commercial bank interest rates averaged 16.5%, and domestic savings remained low to
nonexistent. Credit was typically short term and mainly directed at commerce, with only 2% of loans
going to agriculture. Banks supplied comparatively small amounts to the private sector, citing few
local investment opportunities. Private-sector financing was limited to the largest enterprises. Foreign
currency withdrawals from local banks were regulated, and withdrawals over $50,000 per year
required documentation proving that the currency was necessary.
Five new banks had been formed in Rwanda since 1994, bringing the total number to nine. Banks
and their depositors were concentrated in urban areas, though a few coffee and tea farmers enjoyed
access to credit through cooperatives and OCIR-Café and OCIR-Thé, the state agencies that oversaw
coffee and tea production and export. Several foreign banks held stakes in Rwandan banks. The
Belgian banks Banque Bruxelles Lambert and Banque Belgolaise held substantial shares in Banque
Commerciale du Rwanda (BCR) and Banque de Kigali, respectively. Foreign banks with close ties
with the previous government were being investigated.55 BCR was being privatized, and many
international banks had expressed interest. Banque Populaire Co-operative provided loans for
housing. Caisse d’épargne, a rural savings bank, had been in the process of liquidation since 2001.
706-491 Rwanda: National Economic Transformation
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The government-owned Banque Rwandaise de Développement (BRD) had been restructured to
provide financing to agricultural projects and longer-term investments. Despite some success, the
shares of agricultural and long-term loans in the bank’s portfolio were lower than targeted. Local
government and cooperative leaders could apply to the government’s Community Development
Fund grants for local infrastructure projects. There were an estimated 65 microfinance institutions in
Rwanda serving 200,000 primarily poor, rural clients with small loans.56 Microfinance loans typically
carried interest rates of 2% to 3% per month.
The government planned to open the Kigali Stock Exchange in mid-2004. Following the example
of the Singapore-Kuala Lumpur Stock Exchange, the exchange would be a subsidiary of the Nairobi
Stock Exchange until sufficient infrastructure was put in place. The exchange was expected to
facilitate government privatization efforts and attract additional foreign direct investment. (See
Exhibit 7 for foreign direct investment data.) A bond market was also planned.
International trade Rwanda had been a member of the WTO since 1996 and was a signatory
of the Convention on International Trade in Endangered Species. Rwanda’s imports and exports as a
share of GDP were among the lowest in Africa, and Rwanda had a trade deficit of $185.6 million in
2003.57 In 2003, the major export destinations were Kenya ($41.0 million), Uganda ($26.6 million), the
EU ($8.6 million), Tanzania ($8.0 million), and the DRC ($4.1 million), while imports came primarily
from Kenya ($28.4 million), the EU ($25.9 million), Uganda ($7.6 million), United Arab Emirates ($7.6
million), and Tanzania ($5.6 million). The export price index had declined by 26% since 1995.58 Much
cross-border trade with neighbors was unrecorded; it was believed that Rwanda maintained a
substantial informal trade surplus by exporting food and services to the DRC and Burundi.
In the Uruguay round of trade negotiations (1986–1994), Rwanda had agreed to maximum import
tariffs of 0% to 100% depending on the product, with a simple average of 89%. In practice, Rwanda
applied a four-tiered system of import tariffs: 30% for finished goods, 15% for intermediate goods, 5%
for raw materials, and 0% for capital goods. The trade-weighted average tariff was 19.4%, but
regional trade partnerships and tariff exemptions granted for investment promotional purposes
brought the actual applied rate down to 14.6%, slightly above that of other countries in the region.
The country’s import/export licensing system was seen as efficient, with export licenses obtainable
from any commercial bank. However, traded goods had to pass through an inefficient bonded
warehouse where they were held until all duties and tariffs were paid. The warehouse assessed a fee
of 4% of the value of the shipment, of which three-fourths went to the government.
Exports were exempt from sales tax and duties. In 2003, the U.S. designated Rwanda eligible for
preferential, duty-free trade access to the U.S. market under the African Growth and Opportunity
Act. However, the U.S. had never imposed duties on Rwanda’s main exports of coffee and tea, and so
preferential access had so far had little impact in practice. The African Trade Insurance Agency was
created in 2001 by Rwanda and six other countries to insure investors against political risk.
Rwanda was a member of the Economic Community of Great Lakes Countries (CEPGL) and the
Economic Community of Central African States (ECCAS) and joined the 20-member Common Market
for Eastern and Southern Africa (COMESA) in January 2004. Neither the CEPGL nor the ECCAS had
achieved substantial progress. COMESA had created a free-trade area in 2000, and nine of the
members had removed all barriers to intraregional trade. Together with Burundi, Rwanda had
become part of the free-trade area in 2004. Regional export guarantee and insurance schemes, such as
the World Bank’s African Trade Insurance Agency, had been created but were rarely used by
Rwandan companies. President Kagame became First Vice President of the African Union in July
2003. Rwanda had been invited to join the East African Community (Tanzania, Kenya, and Uganda),
which planned to create a customs union and eventually a common market, though progress had
been limited.
Rwanda: National Economic Transformation 706-491
17
Clusters
The Rwandan economy was dominated by agriculture (42% of GDP), concentrated on food
production (estimated 35% of GDP) and livestock (3.8%). Services (37%) consisted mainly of
wholesale and retail trade (7.8%), government (7.6%), transportation and communications (7%), and
tourism. Industry (22%) employed roughly 10,000 workers and was dominated by construction (11%)
and food processing and beverages (8.9%). (See Exhibit 8.) Industrial firms were mainly small and
medium-size companies with capital below $1 million. Electrogaz, the state-owned energy monopoly,
was the largest company in Rwanda, with revenues of $20 million in 2003.59 The formal sector
consisted of roughly 50 large enterprises and 200 companies with more than 10 employees; an
estimated 70,000 micro- and small-scale enterprises operated largely in the informal sector.60 The
informal sector was estimated to be growing faster than the formal sector, depressing government tax
revenues.61 An estimated 2,000 to 3,500 ventures were in the process of becoming formal firms. In
most firms, accounting and financial statements were poorly kept. A variety of accounting standards
were used, and smaller firms simply used cash accounting.
Agribusiness Agricultural production employed 90% of the population. Farm sizes had
continually decreased as the population had grown, and the average size of agricultural farms in 2002
was 1.9 acres, estimated to be too small to support a family of five. Virtually all land, except that
secured for several national parks, was occupied. Overall agricultural production had achieved prewar
levels by 1998. Production grew by 4% in 2000 and 3.7% in 2001, but growth appeared to be
slowing. Domestic food production was insufficient to meet the country’s needs, and food shortages
were an ongoing concern. Production was hindered by soil erosion that had been the result of
deforestation, and irrigation and water-storage systems were lacking. Roughly 5% of Rwandan farms
used fertilizer, and 11% used insecticide.
The main cash crops were unprocessed coffee, tea, tobacco, and pyrethrum, and there was some
processing of coffee, tea, and other agricultural goods. Coffee and tea output accounted for less than
2% of GDP but typically earned more than 80% of foreign exchange. (See Table B for exports by
product.) Beans, plantains, sweet bananas, and sweet potatoes made up 80% of agriculture, while
Irish potatoes, cassava, sorghum, and maize constituted the majority of the rest. Rwanda started
exporting beans and maize to Uganda and Kenya in 2000 for the first time and had begun to export
potatoes. Food safety and horticultural sanitation facilities and management were poorly developed.
Rwandan tea was considered among the best in the world when grown and processed well. After
1994, tea production had rebounded in quantity, but quality had declined. Rwanda was Africa’s
sixth-largest producer, with 15,200 tons in 2001 compared with 240,000 tons produced by the leader
Kenya. Productivity was at 1,431 kilograms per hectare (kg/ha) versus Kenya’s 2,394 kg/ha, India’s
1,996 kg/ha, Vietnam’s 800 kg/ha, and China’s 627 kg/ha.62 Rwanda’s nine tea-processing estates, all
in the region around Ruhengeri and Gisenyi, were government owned, and the privatizations
planned for 2001 had been delayed. Sorwathe, which accounted for 20% of national tea output, was
the country’s only privately owned tea company, though the government held a 49% stake. The
government had offered stakes of up to 55% ownership in the estates but had been unable to find
strategic buyers. In some cases, the farmers that had historically supplied raw tea to the estates
claimed that they should collectively hold 45% of the equity. The tea estates had further deteriorated,
and the government had embarked on a project to improve productivity before re-attempting to
privatize them. Prices paid to tea farmers were set at FRW 10/kg, regardless of quality, by OCIR-Thé,
a state agency that bought the country’s tea crop each year and transported and sold it for a flat price
at auction in Mombasa. Nearly all of Rwandan tea was exported, unprocessed, and in bulk.63 As part
of the Rwanda National Innovation and Competitiveness (RNIC) program, the tea sector was to
diversify into other types of tea and to produce flavored and blended teas. The aim was also to move
706-491 Rwanda: National Economic Transformation
18
beyond just production to packaging and direct sales. It was believed that tea production could
double and revenues could increase to $91 million by 2010, up from $26.8 million in 2003.64
In coffee, Rwandan beans were of high quality. Roughly 10% of rural households (400,000 farms)
grew at least some coffee. The average number of trees per farmer was between 150 and 300, as
compared with 12,000 per farmer in Central America.65 Coffee production was devastated by the civil
war and fell from 45,579 tons to 21,051 in 1996. With poor weather, old and diseased trees, and low
coffee prices, production dropped further. In 1987, 40% of Rwandan coffee was classified as standard
grade; by 2000, the percentage had fallen to 10%. Fertilizer was rarely used; when it was available,
farmers typically used it on food crops rather than cash crops. Coffee prices fluctuated widely but
had collapsed in the late 1990s, reaching their lowest levels in over 25 years in 2001 and 2002.
Table B Major Exports by Value ($ million, fob)
Export 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003
Coltan N/A 0.6 1.3 2.7 2.5 4.6 11.9 39.2 13.7 6.3
Tea 21.0 3.8 9.3 20.6 22.9 17.5 24.3 22.7 22.0 22.5
Coffee 65.7 38.2 43 45.3 28.1 26.5 22.5 19.4 14.6 15.0
Pyrethrum 1.9 0.5 0.3 3.4 0.9 0.3 0 1.8 1.1 1.3
Tin and Cassiterite 3.6 0.9 0.8 1 0.4 1.2 1 1.1 1.4 4.5
Hides 2.6 2.2 3.2 4.6 2 0.5 0.4 0.8 2.6 3.8
Total 103.0 51.2 61.7 93.0 64.1 62.0 89.8 93.5 67.3 63.0
Source: Rwanda Development Indicators 2002, EIU Country Report 2004, 2005.
Rwandan specialty coffee had begun to be sold in the United States and the United Kingdom. The
government was in the process of selling its stake in Rwandex, the country’s largest coffee exporter,
to existing minority shareholders, and government-owned coffee-processing plants were to be
privatized in the near future. The RNIC goal for the coffee sector was to focus on specialty coffee.
Investing in washing stations, increasing the number from two in 2000 to over 100 in 2010, was seen
as central to this strategy. Fully washed coffee commanded more than double the price of unwashed
coffee, and cyclical price volatility was substantially lower. However, the quality of the coffee beans
declined if they were not washed within six hours of being harvested, and lack of transportation,
poor rural roads, and the logistical challenge of hundreds of farmers utilizing each washing station
all posed complexities.
Cattle, poultry, and goat stocks had returned to 88%, 70%, and 30%, respectively, of pre-1994
levels. Fishing took place on Lake Kivu and smaller lakes including Lake Ihema. The catch was
estimated at 4,500 tons, down from 5,000 to 6,000 pre-1994. It was estimated that the potential for
fishing and fish farming was still underutilized. Pyrethrum, a flower used to make insecticide,
benefited from favorable growing conditions in Rwanda. It was estimated that flowers matured in 44
days in Rwanda as opposed to 60 days in Kenya. A local firm, Highland Flowers, started exports to
Europe in 1999 but was hindered by the lack of direct flights to Europe and closed in 2004.
Mining Rwanda had deposits of tin, columbo-tantalite (coltan), tungsten, gold, and sapphires,
all mined using small-scale techniques. Production of coltan, a rare mineral used in mobile phones
and other high-tech industries, had increased from 256 tons in 1997 to 360 tons in 2001. Coltan prices
collapsed in 2001. A German company had bought the one Rwandan state-owned mineral-processing
factory.
Rwanda: National Economic Transformation 706-491
19
Tourism Rwanda was one of three countries, along with Uganda and the Democratic
Republic of Congo, that were home to the world’s 650 remaining mountain gorillas. Tourism had
come to a halt during the civil war but had begun to grow again. In 2001, 8,000 tourists visited
Rwanda, generating revenues of $15 million, still well below the 36,000 that visited in 1988. By 2004,
the number had recovered to 27,000.
Virunga National Park, with the Virunga volcanoes and mountain gorillas, was Rwanda’s most
unique tourist attraction. The park reopened in 1999, and gorilla viewing was limited to 35 visitors
per session at a fee of $250 per day per person. The number of mountain gorillas in the Virunga
mountains had increased from 320 in 1989 to 376 in 2004 thanks to conservation efforts.66 The
Akagera National Park in the east had many unique forms of wildlife, but some claimed that the
number of animals was not as great as in other parks in east Africa. The Nyungwe Forest in the
southwest was known for its birds and monkeys. Most of the international tourism business was
focused around Ruhengeri and Cyangugu, while domestic tourism focused on Lake Kivu around the
town of Kibuye. (See Exhibit 1.)
The RNIC analysis of tourism focused on high-value travelers. Two main tourist packages were
designed, “Primate Discovery” tours for eco-travelers who came to see the mountain gorillas, and
“500 Years of Great Lakes History” tours. By upgrading tourism infrastructure and attractions and
increasing skills in tourism (creating a tourism culture), the country hoped to increase tourist arrivals
nine-fold to 70,000 arrivals worth $98 million. With government backing, a five-star intercontinental
hotel had been completed in Kigali in 2004 and a four-star hotel on scenic Lake Kivu at Gisenyi. Both
were staffed primarily by expatriates. Rwanda was ranked the seventh-best African exhibitor at the
Berlin International Tourism Exchange in March 2004.
Construction After the war, Rwanda had experienced a construction boom. Construction had
grown an average of 15% per year since 1994 and by 21% in 2002.67 Infrastructure development and
reconstruction had been spurred by donor-funded projects. Population growth in Kigali had led to
significant demand for housing, and returning refugees had triggered considerable construction in
rural areas.
Other industries Total employment in the industrial sector was estimated at 36,000, mostly in
state-owned enterprises.68 Manufacturing, most in the vicinity of Kigali, accounted for less than 10%
of GDP. Food, beverages, and tobacco accounted for 80% of manufacturing. Chemical industries
accounted for 4% and textiles and clothing for 2%, both below regional averages. Firms complained
about low local purchasing power, the high costs of manufacturing inputs, and competition because
of tariff reductions.
Future Challenges
One thing was clear: Rwanda had made real progress since 1994. The challenge was how to
accelerate the growth of the nation’s prosperity while bringing a sense of justice and reconciliation to
its people. One observer noted that while the country appeared placid during the current period of
economic growth no one could predict how the population would react in the event of an economic
crisis. A cabinet member commented, “We have to remember that nobody owes us anything. Today
our donors may be feeling generous, but tomorrow they may not. We have to work twice as hard as
other people. We don’t have the resources that others have; the only resource we have is ourselves.”
706-491-20-
Exhibit1MapofRwanda,2003
KENYA
ETHIOPIA
SUDAN
EGYPT
NIGER
MAURITANIA
MALI
NIGERIA
SOMALIA
NAMIBIA
LIBYA
SOUTHAFRICA
TANZANIA
ANGOLA
ALGERIA
MADAGASCAR
MOZAMBIQUE
LakeTurkana
LakeVictoria
LakeTanganyika
LakeAlbert
LakeNyasa
LakeKariba
BOTSWANA
ZAMBIA
GABON
CENTRAL
AFRICANREPUBLIC
UGANDA
SOUTHAFRICA
(WalvisBay)
SWAZILAND
LESOTHO
MALAWI
BURUNDI
RWANDA
TOGO
BENIN
GHANA
IVORY
COAST
LIBERIA
SIERRALEONE
GUINEA
BURKINA
GAMBIA
SAOTOME
&PRINCIPE
Cabinda
(ANGOLA)
ZIMBABWE
CONGO
EQUATORIALGUINEA
WESTERN
SAHARA
DJIBOUTI
SENEGAL
GUINEABISSAU
SouthAtlantic
IndianOcean
CAMEROON
CHAD
DRC
500KM
500Miles0
0
YEMEN
SAUDIAARABIA
Kibuye
ByumbaRuhengeri
Kigali
Gisenyi
Butare
Virunga
NationalPark
UGANDA
TANZANIA
BURUNDI
DRC
Busizi River
KageraRiver
Lake
Victoria
Lake
Tanganyika
RWANDA
Lake
Kivu
Akagera
NationalPark
Nyungwe
Forest
Bujumbura
125KM
125Miles0
0
Source:Casewriter.
•Cyangugu
Rwanda: National Economic Transformation 706-491
21
Exhibit 2 Rwandan GDP per Capita Performance and Labor Productivity versus Other Nations
0
2,000
4,000
6,000
8,000
10,000
12,000
-4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6%
Gabon
Compound Annual Growth Rate of GDP per Capita (constant 2000), 1998-2003
Zambia
Namibia
Cape Verde
DRC
Uganda
Guinea
Comoros
Burundi
Togo
TanzaniaCameroon
Cote d’Ivoire
Gambia
Lesotho
MaliEthiopia
Ghana
Kenya
Rwanda
Guinea-Bissau
South Africa
Mauritius
Average GDP per
Capita for SubSaharan
Africa:
$1,755
CAGR of Average GDP per
Capita for Sub-Saharan
Africa: 1.23%
Swaziland
Angola Sudan
Botswana
Eritrea
Central
African
Republic
Congo
Mauritania
Chad
MozambiqueNigeria
GDP (PPP) per Capita, 2003
0
5,000
10,000
15,000
20,000
25,000
-4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6%
GDP (PPP) per Employee, 2003
Compound Annual Growth Rate (CAGR) of real GDP per Employee, 1998-2003
Botswana
South Africa Mauritius
GDP per
Employee for
Sub-Saharan
Africa: $3,961
CAGR of GDP
per Employee for
Sub-Saharan Africa:
1.0%
Namibia
Cape VerdeGabon Swaziland
Lesotho
Sudan
Uganda
Ghana
Mauritania
Guinea-Bissau
Mali
TanzaniaBurundi
Zambia
Angola
Cote d’Ivoire
Rwanda
Kenya
DRC
Madagascar
CameroonSierra Leone
ComorosTogo
Nigeria
Chad
Ethiopia
Eritrea
Central
African
Republic
Niger
Congo
Gambia Mozambique
Guinea
Source: World Bank World Development Indicators, author’s analysis.
706-491-22-
Exhibit3Rwanda,SelectedEconomicDatabyPresidentialAdministration,1962–2003
PeriodYear
Nominal
GDPPPP
(US$
billions)
RealGDP
perCapita
PPP
($,1995
prices)
Real
GDP
Growth
(%)
Inflation,
Consumer
Prices(%)
Exchange
Rate
(Rw
Francsper
US$)
Commercial
Bank
Lending
Rate(%)
Exportsof
Goodsand
Services
($m,
2000prices)
Importsof
Goodsand
Services
($m,2000
prices)
Gross
International
Reserves
(current$m)
FDINet
Inflows
(BoP,
current
$m)
Official
Development
Aid
(current$m)
Outstanding
WorldBank
andIMFLoans
(current$m)
20035.521,1043.27.5538N/A2744452154.7332909
20025.361,0899.42.0476N/A2794222442.6355826
20014.821,0236.73.344316.42644472124.6299713
Paul
Kagame
20004.411,0016.03.939316.51514451918.3322692
19994.071,0117.6-2.433816.31385031741.7351692
19983.731,0308.96.231415.71165351697.1326639
19973.391,04713.812.030116.71144911532.6206558
19962.931,00212.77.430617.2883531072.2393536
19952.5592735.2N/A26215.462341992.2617512
Pasteur
Bizimungu
19941.85674-50.2N/A14115.057525510698474
19933.631,272-8.112.414415.0146465475.8336446
19923.871,2765.99.613416.7177399792.2315408
19913.571,126-2.519.612519.01943891104.6354390
19903.541,113-2.44.28413.2210211447.7291340
19893.491,1370.01.08012.02172497015.5266302
19883.361,1654.53.07612.020726611821284274
19873.111,1640.04.17913.026026716417.5292251
19863.031,2235.5-1.18814.023429816217.6297195
19852.811,2134.41.810113.923125911314.6325152
19842.611,205-4.25.410013.518325010715.1300118
19832.631,2996.06.69613.516024411111.126395
19822.381,2611.812.69313.517725111920.726277
19812.211,2735.46.58713.51731761681825665
19801.911,2439.07.28613.517117819616.423658
1979N/AN/A11.915.78713.018415116512.624748
1978N/AN/A9.213.38912.5136143954.723037
1977N/AN/A2.013.796N/A9411284520531
1976N/AN/A19.57.297N/A147116625.918821
1975N/AN/A-2.130.292N/A879925322513
1974N/AN/A1.431.193N/A112117132.21318
Juvenal
Habyarimana
1973N/AN/A3.49.484N/A106731521234
1972N/AN/A0.33.192N/A738560.51091
1971N/AN/A1.20.5100N/A686861.71040
1970N/AN/A6.00.5100N/A75618-0.2970
1969N/AN/A11.00.5100N/A48543N/A84N/A
1968N/AN/A7.03.2100N/A49516N/A80N/A
1967N/AN/A6.91.5100N/A55497N/A63N/A
1966N/AN/A7.0N/A88N/A55595N/A57N/A
1965N/AN/A7.0N/A50N/A55474N/A40N/A
1964N/AN/A-12.5N/A50N/A51334N/A36N/A
1963N/AN/A-9.8N/A50N/A2937N/AN/A36N/A
Gregoire
Kayibanda
1962N/AN/A11.3N/A50N/A5042N/AN/A62N/A
Sources:WorldBank,WorldDevelopmentIndicators;RwandaDevelopmentIndicators;EIUcountrydata.
Rwanda: National Economic Transformation 706-491
23
Exhibit 4 External Aid by Major Donor (over $10 million) and Usage Category ($ millions)
Disbursed Disbursed
Aid by Donor ($M)
Cumu-
lative
Pledges
1994 –
2002
2000
and
before 2001 2002 Aid by Usage Category ($M)
Cumu-
lative
Pledges
1994–
2002
2000
and
before 2001 2002
Bilateral Donors $851.2 $374.3 $160.0 $128.4 Governance $663.7 $292.0 $154.7 $76.9
USA $259.5 $153.2 $27.4 $21.3 Public Administration $558.1 $257.7 $146.0 $68.5
United Kingdom $134.5 $71.2 $39.3 $32.6 Defense $8.4 $1.6 $0.0 $0.0
Germany $112.3 $60.0 $21.6 $6.0 Justice and Public Security $97.3 $32.6 $8.7 $8.3
Belgium $111.4 $21.3 $25.0 $19.5
Netherlands $68.6 $35.9 $14.0 $18.7
Canada $52.7 $0.4 $10.5 $9.3 Production and Environment $256.7 $38.4 $25.9 $23.4
Sweden $41.6 $2.6 $5.8 $11.5 Environmental Protection $8.5 $4.1 $2.3 $1.0
France $19.8 $8.8 $5.0 $3.6 Agriculture $236.2 $28.8 $19.7 $21.0
Switzerland $18.4 $7.9 $3.0 $1.8 Industry and Commerce $12.1 $5.6 $3.9 $1.4
Luxembourg $11.8 $4.1 $2.0 $2.5
Other (7) $20.6 $8.9 $6.3 $1.6
Infrastructure $595.2 $182.5 $69.0 $50.4
Multilateral Donors $1,252.9 $347.8 $155.0 $77.4 Energy and Fuel $41.7 $21.6 $1.2 $0.4
World Bank $379.1 $155.3 $54.1 $16.0 Transport and Communication $237.4 $69.2 $20.2 $12.2
EU $355.7 $3.7 $38.4 $19.4 Land and Public Infrastructure $222.5 $66.2 $39.3 $31.8
ADB $153.7 $68.2 $15.5 $12.8 Water and Decontamination $93.7 $25.5 $8.4 $6.1
PNUD $94.3 $56.4 $7.1 $4.3
FIDA $66.4 $3.2 $8.5 $2.2
UNICEF $50.5 $22.9 $5.7 $3.5 Social & Human Development $770.4 $296.2 $97.0 $90.2
OPEP $43.3 $0.0 $6.1 $0.0 Youth and Sports $30.3 $6.9 $6.1 $4.0
IMF $40.7 $25.1 $12.1 $0.7 Health $220.3 $66.0 $33.7 $26.9
FNUAP $21.9 $5.1 $3.0 $3.4 Education $203.4 $38.0 $22.2 $19.8
BADEA $15.8 $0.0 $0.1 $0.6 Social Services $316.5 $185.3 $35.0 $39.4
HCR $14.9 $6.5 $3.1 $2.9
Red Cross $11.1 $0.0 $0.0 $11.1 Total $2,286.1 $809.1 $346.7 $240.9
Other (2) $5.6 $1.5 $1.2 $0.5
NGOs 182.03 $87.0 $31.7 $35.1
Catholic Relief Service $19.2 $1.1 $4.6 $4.9
Int’l Rescue Committee $18.4 $8.3 $2.8 $2.2
Norwegian People’s Aid $18.0 $15.9 $0.0 $0.0
Trocaire Ireland $17.0 $10.1 $3.0 $2.7
Care International $11.3 $3.8 $1.4 $1.5
Agro Action Allemande $9.6 $5.1 $1.2 $0.6
Concerne $8.9 $6.2 $1.2 $0.0
Lutherian World Fed. $8.8 $4.8 $1.7 $3.7
Avocat Sans Frontiere $5.2 $5.3 $0.0 $0.0
Population Services Int’l $5.1 $0.0 $1.6 $0.9
Other (34) $60.8 $27.0 $14.1 $18.8
Total $2,286.1 $809.1 $346.7 $240.9
Source: Rwanda Development Indicators 2003.
706-491 Rwanda: National Economic Transformation
24
Exhibit 5 Summary of the Vision 2020 National Development Plan, 2002
Goals
Reconstruction of the Nation Rwanda will be a reconstructed, modern, united, and prosperous nation,
open to its Diaspora
Human Resource development Rwanda’s population will be fully literate and have raised and diversified
professional and technical skills. Major epidemics (AIDS, Malaria) and causes of death will be under control.
The population will have more access to quality health services.
Land Use Management, Urban Development and Basic Infrastructure Land use will be rationally
planned. Imidugudu (villages) will become pillars for development. Rural population will have basic
infrastructure necessary for non-agricultural income generating activities. Towns will be better planned.
Urbanization will have exceeded 10% to 30% of the population.
Transport: There will be a modern, well-maintained road network connecting to the Indian Ocean and
Atlantic Ocean. Rwanda will be a sub-regional hub for air and railway transport.
Communication: ICT will be an engine of development. The majority of the population will have access
to ICT. The efficiency of public services will be improved using ICT.
Energy: Rwanda will produce enough energy while avoiding environmental degradation. The use of
wood will be replaced by electricity, solar energy, methane gas, and wind energy.
Water: Universal access to safe drinking water. Better use of techniques to collect and store water.
Water resources will be rationally managed.
Waste management: More than 80% of the population will have access to waste management
infrastructure.
Private Sector Development There will be a culture of initiative and entrepreneurship and a dense,
competitive private sector. Private sector investment will have increased.
Modernization of Agriculture and Animal Husbandry Agricultural and animal production will have
increased in quality, quantity and value. Only 50% of the population will be employed in primary agricultural
production. 50% of farms will use modern methods, improved varieties and breeds.
Gender Issues There will be equality between the sexes in all areas of civil life and before the law.
Natural Resources and Environment Environmental pressures will have been eased, pollution will have
been reduced and environmental degradation will have been reversed.
Science and Technology Rwanda will be able to generate and disseminate skills and technological
innovations. The country will have become a regional center of excellence in ICT.
Regional and international integration Rwanda will have become more stable. It will be enjoying
comparative advantages at the regional and international level, in the framework of NEPAD and other subregional
organizations.
Rwanda: National Economic Transformation 706-491
25
Exhibit 5 (continued)
Reforms
Political reforms: Governance and Reconciliation
• National reconciliation
• Rule of Law
• Good governance
• Decentralization
• Regional and international integration
Creation of Wealth and Poverty Reduction
• Liberal and stable macroeconomic environment
• Reduced reliance on foreign aid
• Withdrawal of government from private sector activities
• Stabilization of national debt
Agricultural Development
• Promotion of commercial agriculture
• Use of improved varieties and breeds
• Improved rural infrastructure
• Improved land use management, water management and
irrigation techniques
• Increased use of agricultural inputs
• Promotion of marketing, processing and storage
• Environmental protection
• Promotion of processed agricultural products
• Improved access to credit for agriculture
• Creation of land titles to serve as commercial assets
• Human resources development
Promotion of Industry and the Service Sector
• Emphasis on producing goods and services for mass
consumption and export
• Improving and reducing the cost of utilities and transportation
• Human resources development
Emergence of a Business and Entrepreneur Class
• Liberalization of the economy
• Privatization/liquidation of public enterprises
• Public/private sector partnership
• Establishment of free trade zones
Creation of Jobs and self-employment
• Large-scale labor intensive public works
• Human resources development
• Regional integration
• Promote the communication and tourism industry
• Connected to agricultural development
• New labor policy and a new national training and
apprenticeship policy
• Micro-credit particularly to young technicians, the selfemployed
and to rural entrepreneurs
• Leveraging the informal sector
Increase Investment Capacity
• Improved resource allocation and monitoring at the national
and decentralized level
• Increased and diversified exports
• Increased internal revenues
• Reduction of recurring public expenditure
• Decentralized public administration
• Reduction in military expenditures
• Reducing government employment
Human Capacity Improvement
• Emphasis on science and technology
• Adult literacy campaign and universal education
• Intensive teacher training programs
• Training senior officers in technology, engineering and
management
• Teaching computer science, information management,
electronics and electrical engineering in secondary
schools
• Special emphasis on educating youth and women
• Transform technical schools into polytechnic schools and
technological colleges
• Programs focusing on on-the-job training, continuing
education, and correspondence courses
Entry into Regional and Global Markets
• Develop cheaper transport alternatives, e.g. a railway link
to Tanzania or Uganda
• Infrastructure investment program to promote Rwanda as a
regional transport and communications hub
• Encourage provincial and regional trade and exchange
• Regional free trade agreements, e.g. COMESA, and
bilateral cooperation agreements
Funding the Vision 2020
• Funds from international financing institutions and debt
reduction
• Foreign direct investment
• Community development works and activities
• Internal revenue
• Promotion of savings
• Establish new capital markets
• Financial sector reform and privatization
• Improved financial sector regulation
• Banking sector opened up to competition
• Specialized financial institutions for long-term savings to be
created
• Micro-finance activities
• Bank guarantee system
Source: Vision 2020, 2002.
706-491 Rwanda: National Economic Transformation
26
Exhibit 6 Rwandan Development Budget by Sector, 2002–2003 ($ millions)
Sector 2002 2003
No. of Projects
2003
General Administration $16.8m $25.6m 21
Defense 1.8 1.6 10
Justice, Public Order & Safety 8.4 7.8 15
Environmental Protection 1.3 1.2 6
Agriculture 18.2 14.0 21
Industry, Commerce, Tourism 4.1 5.1 9
Fuel & Energy 1.4 7.8 12
Transportation & Communication 11.5 11.7 12
Land, Housing, Community Development 8.3 10.8 11
Water & Sanitation 7.4 8.4 11
Youth, Culture, Sports 2.8 1.8 4
Health 9.3 5.9 10
Education 20.4 14.2 12
Social Protection 6.9 6.4 11
Total 118.4 122.4 165
Source: Rwandan Government, Budget Statement to Parliament for 2003; IMF, International Financial Statistics.
Exhibit 7 Rwanda’s Foreign Direct Investment
0%
10%
20%
30%
40%
50%
60%
0% 5% 10% 15% 20% 25% 30% 35%
FDI Stocks as % of GDP,
Average 2000 - 2003
FDI Inflows as % of Gross Fixed Capital Formation, Average 2000 - 2003
Burundi
Rwanda
CameroonBurkina Faso
Guinea
Zimbabwe
Kenya Madagascar
Ethiopia
Senegal
Ghana
Zambia
Eritrea
Lesotho
SwazilandMozambique
NamibiaTogo Sao Tome
Cote d’IvoireCape Verde
Uganda
South Africa
TanzaniaBotswanaBenin
Malawi
Mauritius
Nigeria
(39%, 45%)
Angola
(48%, 100%)
Source: EIU (2005), author’s analysis.
Rwanda: National Economic Transformation 706-491
27
Exhibit 8 Country Economic Data, Selected African Countries
Indicator Year Rwanda Burundi DRC Tanzania Uganda
Population
Population, total (million) 2002 8.2 7.1 53.8 35.2 23.4
Population growth (annual %) 2002 1.7 1.9 2.7 2.0 2.6
Urban population (% of total) 2002 6.4 9.6 N/A 34.2 14.9
Health
Life expectancy at birth, total (years) 2002 39.8 41.7 45.3 43.1 43.1
Mortality rate, infant (per 1,000 live births) 2001 96 114 129 104 79
Adult Population living with HIV/AIDS (%) 2001 8.9 8.3 N/A 7.8 5
Economic Indicators
GDP (current $m) 2002 1,736 719 5,704 9,383 5,866
Average GDP Growth Rate (last 5 years, %) 2002 7.7 1.9 -2.4 4.8 5.5
Average GDP Growth Rate (last 10 years, %) 2002 4.2 -1.5 -3.5 3.8 6.8
Average GDP Growth Rate (last 20 years, %) 2002 2.9 1.2 -2.3 3.7 5.2
GDP per capita, PPP (current international $) 2002 1,221 613 606 557 1,354
GNI per capita, PPP (current international $) 2002 1,210 610 580 550 1,320
Inflation, consumer prices (annual %) 2002 2.5 -1.4 31.5 4.6 -0.3
Inflation, food prices (annual %) 2001 6.0 N/A N/A 6.1 -3.4
External debt, total (DOD, current $m) 2001 1,283 1,065 11,392 6,676 3,733
Trade and Investment Flows
Exports of goods and services (current $m) 2002 140 47 1,047 1,533 699
Growth in exports of goods and services (annual %) 2002 -6.8 6.4 8.0 -2.2 2.8
Imports of goods and services (current $m) 2002 435 136 1,224 2,290 1,636
Balance of trade (current $m) 2002 -294.3 -88.8 -176.1 -756.4 -936.9
Current account balance (BoP, current $m) 2002 -207 -58 N/A -699 -546
Current account balance (% of GDP) 2002 -11.9 -8.1 N/A -7.5 -9.3
Net current transfers from abroad (current $m) 2002 -17.9 39.9 N/A 90.8 545.0
Foreign direct investment, net inflows (% of GDP) 2001 0.3 0.0 0.6 2.4 2.5
Foreign direct investment, net inflows (BoP, current $m) 2001 4.6 0 31.9 224.4 144.7
Foreign Aid
Official development assistance (current $m) 2001 291 131 251 1,233 783
Aid per capita (current $) 2001 36.6 18.8 4.8 35.8 34.3
Aid (% of GNI) 2001 17.3 19.3 5.3 13.3 14.1
GDP Structure (% of GDP)
Agriculture, value added (% of GDP) 2002 41.6 49.3 56.3 44.7 31.4
Total Industry, value added (% of GDP) 2002 21.8 19.4 18.8 16.0 22.7
Manufacturing, value added (% of GDP) 2002 10.4 N/A 3.9 7.5 10.2
Services, etc., value added (% of GDP) 2002 36.6 31.3 24.9 39.4 45.9
Education
Public spending on education, total (% of GDP) 2000 2.8 3.4 N/A 2.1 2.3
School enrollment, primary (% gross) 2000 118.6 65.2 N/A 63.0 135.8
School enrollment, secondary (% gross) 2000 12.1 10.3 18.4 5.8 18.6
School enrollment, tertiary (% gross) 2000 1.7 1.2 1.4 0.7 3.0
Illiteracy rate, adult total (%, age 15 and above) 2002 30.8 49.6 35.9 22.9 31.1
Infrastructure
Internet users (thousands) 2001 20 6 6 300 60
Internet service provider access charges ($ per 30 hours) 2001 38.5 N/A 95 69 30
Telephone mainlines (per 1,000 people) 2001 2.7 2.9 0.4 4.1 2.8
Financial Sector
Credit to private sector (% of GDP) 2002 10.2 24.7 0.7 6.3 6.6
Domestic credit provided by banking sector (% of GDP) 2002 12.5 35.0 0.1 10.0 15.2
Sources: WORLD DEVELOPMENT INDICATORS by STAFF WRITER. Copyright 2006 by WORLD BANK. Reproduced with permission
of WORLD BANK in the format Textbook via Copyright Clearance Center.
706-491 Rwanda: National Economic Transformation
28
Appendix A Rwanda's Neighbors
Uganda
Following independence from the British in 1962, Uganda experienced political upheaval
culminating in the rule of Idi Amin between 1971 and 1979. Asians, who had run most trade and
manufacturing and contributed the majority of private investment, were expelled in 1972. The
economy was devastated.
Uganda returned to political stability in 1986 when Yoweri Museveni and the National Resistance
Movement came to power. The government embarked on an economic recovery program in 1987.
Strict fiscal and monetary controls were enacted to curb inflation, the currency was devalued by 77%,
the exchange rate was liberalized, tariffs were reduced, and many price controls were removed. The
country began a privatization campaign, and two-thirds of the country’s 142 SOEs were sold.
Uganda’s investment law was reformed. The government created the Uganda Revenue Authority in
1991, reformed land laws in 1995, and introduced a VAT in 2000. A Poverty Eradication and Action
Plan was finalized in 2000. The country had received substantial foreign assistance, and foreign debt
had risen to $3.7 billion in 2001.
Uganda’s economy had grown by an average of 5% per year since 1986. Coffee ($109 million in
2002), fish ($90.1 million), tobacco ($51.1 million), tea ($30 million), and cotton ($26.2 million) were
the country’s main exports. Fish exports were expected to exceed coffee exports going forward. The
banking sector was dominated by large, respected foreign banks. Tourism at the country’s 10 national
parks was growing quickly, and 282,000 tourists (114,247 from African countries) visited in 2001.
Corruption was endemic in the Ugandan economy. Both high-level and petty corruption were
common. The country was ranked 113
th
in the world by Transparency International in 2003, and
between 1996 and 2001, corruption was estimated to have cost Uganda $500 million.
Burundi
Previously ruled by the Belgians as part of a union with Rwanda, Burundi had been plagued by
ethnic conflict and numerous massacres between Tutsis and Hutus since its independence in 1962.
Burundi had been in a state of internal conflict since 1988 with the Tutsi-dominated government
fighting Hutu militias and rebel groups, some based in the DRC. The conflict worsened throughout
the 1990s, and hundreds of thousands were displaced. After a military takeover in 1996, regional
economic sanctions were imposed against Burundi until 1999. A peace agreement had been signed in
2000, and a transition government was in place until elections could be held. However, cease-fire
agreements had still to be signed with rebel groups. Following the peace agreement there were
substantial pledges of international aid, and the government drafted an interim PRSP in March 2002.
Burundi had experienced low or negative real GDP growth for a decade. Subsistence farming
constituted 50% of GDP. The main exports were coffee ($33.9 million in 2000), tea ($12.1 million),
cotton, and fishing. The output of these industries had declined substantially in the last decade.
Mineral resources existed, but extracting them had been impossible due to the conflict. Substantial
corruption existed among civil servants and soldiers, and there were many cases of senior politicians
being involved in smuggling.
Roughly 80% of the population lived in poverty. Gross primary-school enrollment had shrunk to
55%, with public expenditure disproportionately weighed toward secondary and tertiary education.
Health care had collapsed in many provinces.
Rwanda: National Economic Transformation 706-491
29
Tanzania
From independence in 1964 until the 1980s, Julius Nyerere ran Tanzania as a socialist country,
modeled on Chinese communism. The country embarked on a structural adjustment program in
1986, which entailed strict fiscal discipline, a privatization program, floating exchange rates, and a
liberalized financial sector. The country ceased to be a single-party state in 1992 and conducted its
first multiparty elections in 1995, though Nyerere’s CCM party still dominated. A favorite among
international donors since the 1960s (particularly Scandinavian and eastern European countries),
Tanzania was one of the most aid-dependent states in Africa, having received an average of $1 billion
a year between 1993 and 1999. The government had formulated a PRSP in 2000.
Tourism had grown strongly in the 1990s, reaching 628,000 tourists in 1999, though the number
had fallen to 525,122 in 2001, earning roughly $500 million. New mining legislation was enacted in
1997, and the mining sector had grown to $373 million in 2002 (up from $51.1 million in 1997), mainly
in gold, diamonds, and gemstones. Other exports were cashews, coffee, cotton, tobacco, and fish.
Agriculture employed two-thirds of the labor force. Tanzania had 20 banks including most
international banks that were active in Africa. A stock exchange was launched in 1998. Businesses
were affected by frequent blackouts and water-supply problems.
In terms of corruption, Tanzania was ranked 92
nd
in the world by Transparency International in
2003 (higher than neighboring Kenya at 112
th
), and there was substantial corruption in the judicial
and police system.
Democratic Republic of Congo (DRC)
The third-largest country in Africa and one of the richest in natural resources, the DRC had been
plagued by colonialism, corrupt government, and civil war. Before independence in 1960, the country
was the private property of the Belgian king and underwent some of the worst human rights abuses
of any colony. Joseph Mobutu ruled for 32 years following a U.S.-backed takeover in 1965, and
corruption was unprecedented by his authoritarian government. Mobutu was overthrown by Laurent
Kabila in 1997, backed by the Rwandan government. Kabila implemented disastrous economic
policies and blocked attempts at reaching a peace agreement. When he was assassinated in 2001, his
son, 32-year-old Joseph Kabila, became president, appointed many respected technocrats in
government, and supported a peace process. An all-party government was due to take power in 2003
in preparation for multiparty elections.
The economy had experienced several decades of economic decline. Copper, once the mainstay of
the economy, had fallen 18-fold since the 1980s and accounted for only $42 million of exports. The
country produced coffee, palm oil, cotton, cocoa, rubber, and tobacco. Despite excellent conditions,
agricultural production had been in steady decline, and the country was a net importer of food. On
the positive side, diamond mining and crude-oil extraction had grown rapidly, reaching $462 million
and $2,001 million in 2001, respectively. Many foreign banks (French, Belgian, South African, U.S.)
were active in the DRC. With the ongoing conflict, there had been a collapse in the education and
public health systems.
706-491-30-
AppendixBPrivatizationsofGovernmentEnterprise,1997–2003
PrivatizedPlannedPrivatizationsLiquidations
CompanySectorYearCompanySectorCompanySector
KabuyeSugarWorksAgriculture19979TeaFactoriesAgricultureOproviab
Agriculture
Ovibar(beverages)Industry19983RiceProcessingFactoriesAgricultureSodepara
c
Agriculture
NationalPrintingHouseIndustry1998LakeKivuFishery,KibuyeAgricultureSoproriz
d
Agriculture
RuhengeriLimeProjectMining1998KigembeFisheryAgricultureSopab(animalfeedsfactory)Agriculture
19petrolstationsEnergy1998GishwatiDairyAgricultureRwandaInternationalTransportCorp.Transportation
KibuyeGuestHouseTourism1998CNPEKabuye(pigfarming)AgricultureAirRwandaTransportation
ReginaHotelTourism1998CNPECyanguguAgricultureRwandaSavingsFundFinance
LakeKivuFisheries,GisenyiFishing1998WisumosawmillAgriculture
NyagatareDairyAgriculture1998RubiriziNationalHatcheryAgriculture
RubiriziDairyAgriculture1998Imprisco(schoolprintingcompany)Industry
NyabugogotanneryAgriculture1998Bralirwabrewery(beerandsoftdrinks)Industry
NyabugogoslaughterhouseAgriculture1998MiningconcessionstobeputonsaleMining
KingFayçalHospital(private&public)Health1998Rwandatel(nationalfixedlinecarrier)Telecom
Boucherie-CharcuteriedeKigali(butcher)Services1999Onatracom(nationaltransportcompany)Transportation
GikondoCoffeeFactory(washingstation)Agriculture1999ItuzeTouristLodgeHotel
NkoraCoffeeFactory(washingstation)Agriculture1999Bacar(bank)Finance
Sorwal(matchsticks)Industry2000BankofKigaliFinance
KinigiTouristResortTourism2000RwandaCommercialBankFinance
LakeKivuFisheries,CyanguguFishing2000RwandaDevelopmentBankFinance
RwandaPyrethrumAuthorityAgriculture2000SONARWA(insurance)Finance
Tabarwanda(cigarettes)Industry2001MAGERWA(warehouses)Other
KarurumaFoundryMining2001
KiyovuHotelTourism2001
DiplomatesHotelTourism2001
IzubaHotelTourism2001
LakeIhemaFisheryFishing2001
Sonafruits(juiceproductionfactory)Agriculture2001
GatareFlourMillAgriculture2001
CNPEa
RuhengeriAgriculture2001
SeveralOproviab
BranchesSoldServices2001
RulibaBrickWorksIndustry2002
MukamiraMaizeProcessingFactoryAgriculture2002
CNPEa
Kabuye(Rabbit&Poultry)Agriculture2002
MasakaCoffeeFactory(washingstation)Agriculture2002
Electrogaz(privatemanagementcontract)Energy2003
AkageraHotelTourism2003
KamatsiraSawmillForestry2003
Source:GovernmentofRwanda,PrivatizationSecretariat;Author’sresearch.
aNationalCenterforSmallLivestockbranch.
bNationalOfficefortheDevelopmentandMarketingofFoodandAnimalProducts.
cCompanyforthePromotionandMarketingofAgriculturalandAnimalProducts.
dRwandan-Chinesecompanyforthepromotionofrice.
Rwanda: National Economic Transformation 706-491
31
Endnotes
1 EU, “Country Overview,” http://europa.eu.int/comm/development/body/country/country_home_
en.cfm?CID=rw&lng=en&type=home&status=new, accessed January 2004.
2 Organization for African Unity International Panel of Eminent Personalities (IPEP), “Rwanda: The
Preventable Genocide.” Source for much of the political and social history of Rwanda.
3 Republic of Rwanda, “The General Census of Population and Housing: Rwanda,” August 16–30, 2002,
http://www.minecofin.gov.rw/docs/report.doc, accessed January 10, 2003. Source also for population of
Rwandan cities.
4 EIU data services, EIU country data. Main source for macroeconomic data forecasted for 2003.
5 World Bank, WDI Online, http://devdata.worldbank.org/dataonline/. Main source for economic and
social data prior to 2003.
6 Economist Intelligence Unit, Country Profile: Rwanda: Burundi (Kent, U.K.: Patersons Dartford, 2000).
7 EIU country data.
8 Rwanda Ministry of Finance and Economic Planning, “A Profile of Poverty in Rwanda,” February 2002.
9 “Rwanda Gets a New Constitution,” The Monitor, http://www.monitor.co.ug/specialincludes/mplsups/
rwandasup/rwsup9.php, accessed January 2004.
10 Government of Rwanda, The Constitution of the Republic of Rwanda, 2003.
11 IPEP.
12 Government of Rwanda.
13 UPenn African Studies Center, East Africa Living Encyclopedia, “Rwanda—History,”
http://www.africa.upenn.edu/NEH/rwhistory.htm, accessed March 2004.
14 PBS Frontline website, “Rwanda: A Historical Chronology,” http://www.pbs.org/wgbh/pages/
frontline/shows/rwanda/etc/cron.html, accessed January 2004.
15 IPEP. Main source of data on the Habyarimana period.
16 Encyclopædia Britannica.
17 IPEP.
18 Ibid.
19 World Bank, Memorandum of the President of the International Development Association to the Executive
Directors on a Country Assistance Strategy for the Republic of Rwanda [CAS] (2002).
20 “The Rwandan genocide tribunal: Prosecutor accused,” The Economist, http://www.economist.com/
displaystory.cfm?story_id=2010873, accessed March 2004.
21 World Bank, WDI Online.
22 World Bank, CAS.
23 Sophie Da Camara, “The European Union’s Political and Development Response to Rwanda,”
http://www.oneworld.org/ecdpm/pubs/dp27_gb.htm, accessed January 2004.
24 “Revenue Authority collects money for development,” The Monitor, http://www.monitor.co.ug/
specialincludes/mplsups/rwandasup/rwsup13.php, accessed April 2004.
706-491 Rwanda: National Economic Transformation
32
25 “Rwanda acts on corrupt police,” BBC, http://news.bbc.co.uk/2/hi/africa/3513968.stm, accessed April
2004.
26 Rwanda Investment Promotion Agency, “Investment Climate: Privatization,” http://www.rwandainvest.
com/index.php?action=section&page=privatization, accessed April 2004.
27 U.S. Department of State, “Rwanda Country Commercial Guide FY2003,” http://www.buyusainfo.net/
info.cfm?id=108398&keyx=40150EE0C3634EFB8DA825810D15FCAE&dbf=ccg1&loadnav=, accessed April 2004.
Main source for data on investment regulations and the business environment.
28 Comments by Alfred Kalisa, chairman of the Private Sector Federation, April 13, 2004.
29 UNCTAD, “Hand Book of Statistics Online,” http://www.unctad.org/Templates/Page.asp?intItemID=
1890&lang=1, accessed April 2004.
30 Human Rights Watch, “World Report 1997,” http://www.hrw.org/reports/1997/WR97/AFRICA-07.htm,
accessed March 2004.
31 World Bank, World Bank Project Database, http://web.worldbank.org/WBSITE/EXTERNAL/
PROJECTS/0,,pagePK:221246~piPK:95913~theSitePK:40941~menuPK:51559~category:country,00.html, accessed
January 2004.
32 European Commission website, “EU Relations with Rwanda,” http://europa.eu.int/comm/development/
body/country/country_home_en.cfm?CID=rw&lng=en&type=home&status=new, accessed January 2004.
33 Department for International Development.
34 World Bank, WDI Online.
35 World Bank, CAS.
36 Parliamentary speaker Joseph Sebarenzi and Prime Minister Pierre-Célestin Rwigyema both sought exile
in the United States.
37 World Bank, CAS.
38 World Bank, World Bank Project Database.
39 “Countries: Rwanda,” World Bank, http://www.worldbank.org/afr/rw2.htm, accessed December 2003.
40 Global IDP Database, “Referendum on constitution and presidential and parliamentary elections in 2003,”
http://www.db.idpproject.org/Sites/idpSurvey.nsf/wViewCountries/CEC95C03CA883C53C1256D570042BE3
E, January 2004.
41 “Rwanda’s new constitution: The fear of majority rule,” The Economist, http://www.economist.com/
displaystory.cfm?story_id=1817766, accessed March 2004, and Theogene.
42 Freedom House, Rwanda Country Report, 2006.
43 “Ruling Party Wins Election,” BBC, http://news.bbc.co.uk/2/hi/africa/3148122.stm, accessed January 2004.
44 Ministry of Finance and Economic Planning, Budget Statement to Parliament for 2003 (Republic of Rwanda).
45 EIU, Country Profile: Rwanda.
46 Government of Rwanda, Ministry of Infrastructure, “Presentation on the Energy Sector,” 5
th
Annual
Development Partners Meeting, December 2005.
47 Ibid.
48 Ibid.
Rwanda: National Economic Transformation 706-491
33
49 Government of Rwanda, Vision 2020.
50 “Poverty Reduction Support Grant,” World Bank, October 13, 2005.
51 “The economy offers great hope,” The Monitor, http://www.monitor.co.ug/specialincludes/mplsups/
rwandasup/rwsup11.php, accessed March 2004.
52 Government of Rwanda, Poverty Reduction Strategy Paper Summary Version, June 2002.
53 World Health Organization, “Mortality Country Fact Sheet 2006.”
54 EIU, Country Profile: Rwanda. Source for most of the data on health.
55 Ibid. Source for most of the data on financial markets.
56 “Rwanda: Diagnostic Trade Integration Study,” World Bank, November 1, 2005.
57 Donald Kaberuka, Budget Statement 2004: Statement Delivered to the Chamber of Deputies (2003), goods
only.
58 “Rwanda: Diagnostic Trade Integration Study,” World Bank, November 1, 2005.
59 Ibid.
60 “Review and Assessment of Micro and Small Scale Enterprises in Rwanda,” World Bank, May 2004.
61 “Rwanda: Diagnostic Trade Integration Study,” World Bank, November 1, 2005.
62 “Rwanda Competitiveness and Innovation Program: Executive Briefing,” OntheFrontier, July 2002.
63 “Rwanda: Diagnostic Trade Integration Study,” World Bank, November 1, 2005.
64 Ibid.
65 “Assessing USAID’s Investments in Rwanda’s Coffee Sector,” USAID, December 2005.
66 “Gorilla conservation: Good news for a change,” The Economist, http://www.economist.com/
displaystory.cfm?story_id=2367299, accessed March 2004.
67 “The economy offers great hope,” The Monitor.
68 “Rwanda: Diagnostic Trade Integration Study,” World Bank, November 1, 2005.