Rwanda is a small but growing market, with a population of nearly 13 million people and a Gross Domestic Product (GDP, Current) of $10.354 billion, according to the World Bank.  Before the COVID-19 pandemic, Rwanda enjoyed strong economic growth, averaging over seven percent GDP growth annually over the last two decades.  The Rwandan economy grew more than nine percent in 2019 thanks to strong growth in industry, construction, services, and agriculture.      

Due to the COVID-19 outbreak, the Rwandan economy experienced its first recession since 1994, with a 3.4 percent GDP contraction in 2020.  In February 2020, the World Bank reported that Rwanda was among the most affected economies in Africa since the difference between pre-and post-growth projections reached 8 percent.  In May 2021, the IMF projected Rwandan GDP growth to rebound to 5.1 percent by the end of 2021.  Rwanda’s economic recovery from the pandemic has been affected by delays in obtaining vaccines and resurgences of infections driven by more contagious variants, prompting the Government of Rwanda (GOR) to impose lockdowns from time to time.  As of June19, 2022, 66 percent of all Rwandans had received at least two doses of COVID-19 vaccine. The vaccination rates are even higher in Kigali city.  

The World Bank reported in July 2021 that Rwanda’s public debt increased from 61 percent of GDP in 2019 to 71.4 percent in 2020 and was expected to reach 81 percent in 2023.  Public debt increased due to reduced revenue, the need to support a struggling private sector and households impacted by lockdowns, inflation, and general government expenses.  The percentage of foreign assistance (external grants and loans) in the country’s annual budget has dropped from over 80 percent a decade ago to 33 percent in the 2021/2022 National Budget.    

Leading sectors include energy, agriculture, trade and hospitality, and financial services.  Rwanda’s economy is overwhelmingly rural and heavily dependent on agriculture.  Strong growth in the services sector over the past decade, particularly in construction and tourism, has contributed to overall economic growth.  GNI per capita was $830 in 2019, according to the World Bank. 

The government is seeking to turn Rwanda into a regional trade, logistics, and conference hub.  Pillars of this strategy include the construction of several new international business class hotels, a convention center in downtown Kigali, a new inland container terminal and bonded warehouse in Kigali.  The government has also invested in expanding the fleet for the national carrier RwandAir and is pursuing U.S. authorization for a direct flight from Kigali to the United States.  Construction of the new Bugesera International Airport is ongoing.

Rwanda’s principal exports (coffee, tea, cassiterite, coltan, wolfram, hides and skins, and pyrethrum) decreased 10 percent in value and 8 percent in volume between 2019 and 2020 due to reduced global demand from the COVID-19 pandemic, according to the Ministry of Finance and Economic Planning (MINECOFIN).  Major markets for coffee exports are the United States and Europe, while Middle Eastern countries and Pakistan are the main buyers of Rwandan tea.  Prior to the COVID-19 pandemic, tourism was the country’s leading foreign exchange earner.  In October 2020, the IMF predicted that Rwanda’s tourism revenues would fall from $411 million in 2019 to only $82 million in 2020.  Revenues from Rwandan strategic investments in meetings, incentives, conferences/conventions and events/exhibitions (MICE) are expected to recover slowly given disruptions to international travel patterns and advances in teleworking.

Rwanda’s small industrial sector contributes around 19 percent to GDP and employs less than three percent of the population.  The services sector – including tourism - generates almost half of GDP (46 percent) and has grown at an average annual rate of around ten percent in recent years.  Rwanda is highly import-dependent, and the Rwandan government faces chronic and large current account deficits.  In 2020, imports totaled $3.109 billion compared to $2.725 billion in 2019, an increase of 14 percent due to increased imports of consumer goods.  Imports of capital and intermediary goods increased by 5 percent and 6 percent respectively while energy product imports decreased by 33 percent over the past two years, according to the Ministry of Finance and Economic Planning.  In 2020, principal imports included electrical machinery and parts; electronic equipment and parts; machinery appliances and parts; vehicles and accessories; cereals and other food stuffs; pharmaceutical products; construction equipment including iron and steel; and energy and petroleum products.  China, Europe, Kenya, India, the United Arab Emirates, and Tanzania are among Rwanda’s major suppliers. 

U.S.-Rwanda bilateral trade in 2020 totaled $60 million ($27.4 million in exports to Rwanda, $32.6 in imports from Rwanda) compared to $64.5 million ($18.9 million exports to Rwanda and $45.6 million imports from Rwanda) in 2019.  Rwandan exports to the United States have grown significantly over the last 10 years.  However, after Rwanda implemented higher tariffs on imports of secondhand clothing and footwear in 2016, the U.S. government partially suspended African Growth and Opportunities Act (AGOA) benefits for apparel products from Rwanda, effective May 2018.  Many other Rwandan exports to the United States are still eligible for trade preferences under the Generalized System of Preferences and AGOA.  

U.S exports to Rwanda are historically dominated by civilian aircraft, engines, equipment, and parts.  Other exported products include mechanical and electrical machinery and related parts; medical, pharmaceutical, and scientific equipment; digital automatic data processing machines; and vaccines.  Rwandan exports to the U.S are dominated by coffee; tantalum ores and concentrates; tungsten concentrates; and macadamia nuts (shelled, fresh, or dried).

In 2007, Rwanda joined the East African Community (EAC).  Rwanda is also a member of the Common Market for Eastern and Southern Africa (COMESA).  Rwanda has signed and ratified agreements on the movement of goods and services within the Africa Continental Free Trade Area (AfCFTA).  Rwanda is the only nation in the region to have concluded a Bilateral Investment Treaty (BIT) with the United States.  Rwanda has also concluded a Trade and Investment Framework Agreement (TIFA) with the United States.  The most recent meeting on the TIFA was in October 2019.  In 2009, Rwanda became a member of the Commonwealth and hosted the Commonwealth Heads of Government Meeting (CHOGM) in June 2022, after postponements in 2020 and 2021 due to COVID-19, Rwanda joined the OECD Development Center in 2019.

Rwanda is a member of the Northern Corridor initiative, which includes Kenya, Uganda, South Sudan, and Ethiopia as core members and the Democratic Republic of the Congo (DRC), Burundi, and Tanzania as observers.  Rwanda is also at the forefront of the Central Corridor initiative, which also includes Burundi, DRC, Tanzania, and Uganda.   The large infrastructure projects (such as rail transportation) envisioned under these initiatives could help to reduce the cost of conducting business and transporting goods across the region.  The two corridor initiatives, however, are not currently fully active due to political and security disputes between Rwanda and Uganda and Rwanda and Burundi.  Trade with Uganda has been severely restricted since February 2019, but it is showing signs of recovery following progressive normalization of relations in 2022.

Rwanda benefits from low violent crime rates and its strong police and military provide a security umbrella that minimizes potential criminal activity and political conflicts. 

Leading reasons to consider the Rwandan market for U.S. export expansion include:

History of sustained high economic growth:  Strong average year-on-year GDP growth, albeit from a low base; relatively low inflation.

Low corruption:  One of Africa’s four least corrupt nations and 49th in the world in the Transparency International 2020 Corruption Perception Index.

Easy to start a business:  Top global consistent reformer since 2008.  Investors can register a business online or in person in as little as six hours through the Rwanda Development Board (RDB).

Access to markets:  Rwanda has a small but growing middle class plus a market and customs union with a market potential of 146 million consumers in the EAC and 460 million in COMESA.  Rwanda enjoys easy access to the eastern DRC market of approximately 35 million people.

Untapped investment opportunities:  Opportunities for investment are particularly attractive in the following sectors:  infrastructure, energy, agriculture, tourism, manufacturing, information and communication technology, mining, financial services, real estate, and construction.

Political & Economic Environment:  State Department’s website for background on the country’s political environment.