Rwanda: Economic and Political Overview
From 2014 to 2023, Rwanda's GDP per capita grew at an average rate of 4.3% per year. However, this growth has been largely driven by public investment, supported by external aid, which has not led to sufficient job creation or significant improvements in productivity and poverty reduction. The economy grew by 8.9% in 2024, up from an average of 8.2% in 2022-2023, driven by strong private consumption—fueled by the creation of nearly half a million jobs, particularly in rural areas—and solid investment. On the supply side, growth was led by continued expansion in services (+10%), industry, and a recovery in food production. Furthermore, private consumption grew by 4.2% in 2024, driven by improved labour market conditions and lower inflation. Public consumption rose by 14.8%, while investment surged by 16.0%, up from a slight decline of -0.2% in 2023, mainly due to strong construction activity. Looking ahead, real GDP is expected to grow at an average of 7.1% from 2025 to 2027, fueled by continued growth in agriculture, services, and industry (data from the World Bank).
Rwanda’s fiscal position improved in the first half of FY2024/25, driven by higher tax collections and fiscal consolidation efforts. Revenue reached 21.9% of GDP, up 1.5 percentage points from the previous year, largely due to the increased use of Electronic Billing Machines (EBM). On the expenditure side, total outlays were 26.7% of GDP, in line with the budget, reflecting efforts to streamline spending. Consequently, the fiscal deficit narrowed to 4.8% of GDP, with the primary balance deficit reducing to 2.8% of GDP. The government is focused on fiscal consolidation, cutting costs through reduced official travel, virtual meetings, and expanding public services digitalization. It is also improving public investment management and revenue administration to broaden the tax base. Public debt, estimated at 78.8% of GDP in 2024 by the World Bank, is projected to peak at 86.4% in 2026 before gradually declining. Meanwhile, inflation eased to 4.8% in 2024, down from over 13% in the previous two years, driven by lower food prices, easing global inflation, and monetary tightening. However, core inflation remained high due to rising transport costs after the removal of government subsidies. The banking sector stayed stable, with private sector credit growing by 20.3%, non-performing loans at 5%, and banks maintaining strong liquidity and capitalization, as seen in a liquidity coverage ratio of 305.9% and a capital adequacy ratio of 22.8%, well above regulatory thresholds.
According to the World Bank, Rwanda's labour market improved in 2024, with unemployment falling to 14.9% and labour force participation rising to 62.3%, although gender and urban-rural disparities remain. Using the international poverty line of USD 2.15/day in 2017 PPPs, poverty in Rwanda was estimated at 47.6% in 2024. Rwanda has a low GDP per capita, estimated at USD 3,814 in 2024 by the IMF (PPP).
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 14.10 | 13.66 | 14.02 | 14.93 | 16.15 |
| GDP (Constant Prices, Annual % Change) | 8.2 | 7.0 | 6.5 | 6.8 | 7.2 |
| GDP per Capita (USD) | 1,044 | 986 | 990 | 1,032 | 1,093 |
| General Government Gross Debt (in % of GDP) | 64.5 | 71.4 | 73.3 | 73.4 | 71.8 |
| Inflation Rate (%) | 14.0 | 4.9 | 5.1 | 5.0 | 5.0 |
| Current Account (billions USD) | -1.65 | -1.64 | -1.54 | -1.44 | -1.48 |
| Current Account (in % of GDP) | -11.7 | -12.0 | -11.0 | -9.7 | -9.2 |
Source: IMF – World Economic Outlook Database, October 2021
The Rwandan economy relies on a subsistence economy, exports of tea and coffee, and tourism. The mining sector is also a significant contributor to the economy, with the country being one of the largest producers of tantalum, a crucial material used in mobile phone construction. Agriculture serves as Rwanda's primary economic activity, directly employing 54.8% of the total population (World Bank). This sector constitutes 27.1% of GDP and contributes roughly 80% of foreign income from exports such as coffee, tea, hides and skins, horticulture, and pyrethrum (a chrysanthemum-based insecticide). Approximately 61% of Rwanda's land is suitable for agriculture due to its fertile soils. However, food production often falls short of demand, necessitating imports. According to the National Institute of Statistics Rwanda, in 2024, food crop production in agriculture rose by 5% thanks to good harvests. However, export crop output fell by 1%, as modest increases of 2% in coffee and 1% in tea were outweighed by an 8% drop in other cash crops such as pyrethrum and sugarcane.
The industrial sector in Rwanda is closely tied to the processing of primary agricultural products and represents 21.5% of GDP and 14.5% of employment. Nearly 70% of industries are concentrated in Kigali, with minimal activity in urban centres in the hinterland. The government is committed to gradually privatizing the productive sector and fostering the development of the private sector. Rwanda's manufacturing industry is modest yet expanding, witnessing a transition from basic production to more value-added activities across various sub-sectors. These include fast-moving consumer goods like detergents, body care products, and plastics, as well as construction materials such as cement and steel bars. Additionally, there's a growing presence in furniture, laboratory equipment, electronic products, and automotive assembly, including phones, computers, and vehicles. Overall, the World Bank estimates the manufacturing sector to contribute 10% of GDP. In 2024, Rwanda’s industrial sector grew by 10%, driven by strong gains in manufacturing and construction—up 7% and 12% respectively—boosted by growth in metal products, chemicals, textiles, and infrastructure projects. This was partly offset by a 12% decline in mining and quarrying (data NISR).
The tertiary sector accounts for approximately 44.3% of GDP and employs 30.7% of the total workforce. Rwanda's banking sector consists of 15 commercial banks, microfinance banks, development banks, and cooperative banks. The sector posted strong growth in 2024, with total banking assets reaching RWF 7.8 trillion and net profits rising by 36.7% to RWF 132.5 billion in the first half of the year, supported by increased lending and greater operational efficiency (data Rwanda Bankers' Association). Additionally, Rwanda aims to bolster the growth of its tourism industry and position itself as a regional leader in information and communication technologies. Tourism has emerged as a significant source of foreign exchange, driven in part by the rise in international conferences, and is expected to continue growing due to substantial investments in infrastructure (in 2024, it generated USD 647 million in revenue, a 4.3% increase from the previous year). The services sector grew by 10% in 2024, driven by an 18% surge in wholesale and retail trade. Transport expanded by 9%, with air and land transport rising by 18% and 10% respectively. Strong growth was also recorded in information and communication services (25%), hotels and restaurants (11%), public administration (10%), financial services (7%), and education (5% - data NISR).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 54.8 | 14.5 | 30.7 |
| Value Added (in % of GDP) | 27.1 | 21.5 | 44.3 |
| Value Added (Annual % Change) | 1.7 | 10.2 | 11.2 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Latest Update: May 2025
