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Country Profile 2004

RwandaThis Country Profile is a reference work, analysing thecountry's history, politics, infrastructure and economy. It isrevised and updated annually. The Economist IntelligenceUnit's Country Reports analyse current trends and provide atwo-year forecast.

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© The Economist Intelligence Unit Limited 2004 www.eiu.com Country Profile 2004

Contents

3 Regional overview3 Membership of organisations

8 Basic data

9 Politics9 Political background11 Recent political developments15 Constitution, institutions and administration16 Political forces18 International relations and defence

20 Resources and infrastructure20 Population21 Education22 Health22 Natural resources and the environment23 Transport, communications and the Internet24 Energy provision

25 The economy25 Economic structure26 Economic policy29 Economic performance30 Regional trends

30 Economic sectors30 Agriculture32 Mining and semi-processing32 Manufacturing32 Construction33 Financial services33 Other services

34 The external sector34 Trade in goods36 Invisibles and the current account37 Capital flows and foreign debt38 Foreign reserves and the exchange rate

39 Appendices39 Sources of information41 Reference tables41 Population41 Population breakdown by age41 Labour force, 199641 National energy statistics42 Government finances42 Money supply42 Gross domestic product42 Gross domestic product by expenditure

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43 Gross domestic product by sector43 Consumer prices43 Food crop production44 Agricultural production for export44 Mineral production44 Manufacturing production44 Exports45 Imports45 Main trading partners45 Balance of payments, IMF estimates46 External debt, World Bank estimates46 Net official development assistance47 Foreign reserves47 Exchange rates

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Regional overview

Membership of organisations

Based in Lusaka, Zambia, the Common Market for Eastern and Southern Africa(Comesa), is the successor organisation to the regional Preferential Trading Area(PTA), and came into force on December 8th 1994 with 12 members. Comesanow has 19 members: Angola, Burundi, Comoros, the Democratic Republic ofCongo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius,Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. TheComesa region has a total population of around 385m and an estimated GDPof US$170bn. Lesotho, Mozambique and Tanzania have all withdrawn fromComesa since 1997 to concentrate on their membership of the Southern AfricanDevelopment Community (SADC), while Namibia withdrew in July 2003stating that its industries were too weak to compete with Comesa's free-tradearea (FTA). South Africa's decision not to join Comesa makes SADCmembership more attractive to its main trading partners.

The original PTA, launched in 1981, aimed to liberalise trade and encourage co-operation in industry, agriculture, transport and communications. Comesa'sprincipal aims build on these ideals; its main goals are to eliminate thestructural and institutional weaknesses of member states and to promote thepolitical security and stability necessary for sustained development, bothindividually and collectively as a regional bloc. These aims are to be achievedthrough monetary union with a single currency and a common central bank.The creation of a free-trade area on October 31st 2000 was to be a major steptowards achieving them. However, by early 2003, only nine of the 19 membershad agreed to participate fully (Djibouti, Egypt, Kenya, Madagascar, Malawi,Mauritius, Sudan, Zambia and Zimbabwe)—Rwanda, Burundi and Swazilandhave undertaken to join by early 2004, albeit hesitantly, following Namibia'swithdrawal from Comesa. Comoros and Uganda are still considering theirfutures within the FTA. The nine FTA members have removed all barriers tointra-regional trade, although they retain tariffs on imports from outsideComesa. To encourage other members to join the free-trade area, a fund wascreated in 2002 to compensate those countries facing revenue loss, although thesource and extent of this funding is not clear. The targets of achieving a customsunion by December 2004 and full monetary union by 2025 remain, but neitheris likely to be attained.

The most recent figures, for 2002, give total intra-Comesa trade as US$3.9bn;intra-Comesa trade as a proportion of total trade ranged from 4.3% for theSeychelles to 17.6% for Kenya. Over the past 30 years the share of Comesaexports as a percentage of intra-regional exports has grown only slightly, from9% in 1970 to 10.7% in 2002 (although these figures do not capture the high levelof illegal crossborder trade). Reasons for the low level of intra-Comesa tradeinclude a lack of political commitment and political stability in membercountries, plus weak balance-of-payments and foreign-reserves positions. Insome cases there are hardly any official trade links between member states.

Common Market for Easternand Southern Africa (Comesa)

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Egypt, Kenya, Uganda, and Zimbabwe accounted for 58.8% of the trade betweenmembers of Comesa in 2002.

As industry and manufacturing are generally poorly developed, manymembers are unprepared to reduce tariffs further for fear of undermining localindustries (Tanzania's main reason for leaving) and fiscal revenue collection. Afurther constraint has been the strict and cumbersome rules of origin, whichare open to conflicting interpretations and are not due to be harmonised until2004. In addition to these impediments, progress towards free trade ishampered by political tensions between member states.

Regional free-trade areas like Comesa's FTA aim to increase intra-regionalcommerce, leading to higher economic growth rates, but they attract criticismfrom many who feel that this cannot be achieved while supply-sideconstraints—such as poor infrastructure, inefficient transport links, loweducation and skills levels, and cumbersome bureaucracy—remain. Comesa hasconcentrated on trade integration, but the lack of uniformity in investmentcodes and regulatory arrangements has been an impediment to crossbordertrade and investment. The commitment to Comesa of many of its members isweak—in 2002 most members were not paying their membership contrib-utions—and meetings are frequently cancelled. Moreover, attempts at promotingcrossborder investment and monetary harmonisation have been superseded byinitiatives introduced by the East African Community and SADC.

Under the old PTA system, a multilateral clearing facility was established and aPTA unit of account (UAPTA), equivalent to the IMF's SDR, was used to settledebts between members, the balance being payable in US dollars. In 1997 theUAPTA was replaced by the Comesa dollar, which is pegged to the US dollar. AComesa court was officially opened in March 2001, although it had beenestablished three years earlier. In theory, the court, which aims to be anindependent arbitrator in trade-related disputes, has jurisdiction over nationalcourts, but in practice it does not have the powers to enforce its rulings and hasbeen hamstrung by a lack of finance. Comesa also set up the African TradeInsurance Agency (ATI) in 2001. Financed by a US$5m start-up loan from theWorld Bank, the ATI aims to provide political risk cover for investors in allmember countries. In November 2002 Comesa, along with other Eastern andSouthern African regional integration organisations, established the Inter-regional Co-ordinating Committee (IRCC) to promote regional economicintegration, and the integrated management of natural resources, transport andcommunications.

A new 20-year convention was signed in June 2000 in Cotonou, Benin, offeringa group of 77 African, Caribbean and Pacific (ACP) countries preferential tradeand aid links with the EU. The Cotonou Convention replaced Lomé IV, aconvention which was signed in 1989 and replaced previous agreements signedin 1975, 1979 and 1984. Although similar to the Lomé conventions, the newconvention has a stronger political dimension. Respect for human rights,democratic principles and the rule of law were essential components of LoméIV; under the Cotonou agreement, ACP countries have also agreed to promote

Cotonou Convention

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good governance, combat corruption and try to prevent illegal immigration intothe EU.

Under previous conventions, ACP products, whether agricultural or industrial,entered the EU duty-free, although four agricultural products—beef, sugar,bananas and rum—were subject to a more restrictive system of tariff quotas.Because the type of trade agreement established by the Cotonou Conventiondoes not comply with the rules of the World Trade Organisation (WTO), thenew agreement offers a negotiating framework for tailor-made regional free-trade agreements (RFTAs), under which ACP countries, preferably withinexisting economic groupings, will gradually open their domestic markets toEuropean products. Given the adjustment costs involved, a preparatory periodof eight years has been agreed, during which the old system of preferences willcontinue to apply. However, under existing global trading rules, the 33 Africancountries classified as least developed countries will still have the option ofentering the EU's generalised system of preferences (GSP). Unlike the LoméConvention, the GSP, which benefits all developing countries, complies withthe rules of the WTO because it is based on the twin principles of non-reciprocity and non-discrimination. In September 2003 the ACP countries andthe WTO signed an agreement at the Cancun trade round, whereby the WTOwill provide training and technical assistance to ACP countries as a form ofmutual co-operation.

The European Development Fund (EDF) will remain the main source ofmultilateral European aid to the ACP countries. Under the new convention,EDF instruments have been regrouped and rationalised into two programmes:one to provide grants for long-term development schemes being carried outeither at the national or the regional level, with additional support available inthe event of a fall in export earnings; and the other to finance risk capital andloans to the private sector. The ninth EDF will total €13.5bn (US$12.9bn). Inaddition, about €10bn left undisbursed from previous programmes will remainavailable until 2007, and €1.7bn will be provided by the European InvestmentBank. The Cotonou Convention finally entered into force on April 2003 with all15 EU members and 76 ACP nations (except Somalia) ratifying the treaty. Amonth later ACP representatives signed the Brussels Declaration, which calls forthe timely and effective implementation of EDF funds. This represents acommitment towards the efficient disbursement of EDF resources for thebenefit of ACP countries.

The African Union (AU) is the successor to the Organisation of African Unity(OAU) and is based in the Ethiopian capital, Addis Ababa. The AU was formallylaunched in July 2002 at a meeting of African heads of state in the SouthAfrican city of Durban. This came two years after the AU's formation was firstagreed in Togo in July 2000 and followed a one-year transitional period whichbegan after the ratification of the constitutive act of the AU by two-thirds ofmember states in May 2001. The AU is modelled on the EU and has ambitiousplans for a parliament, a central bank, a single currency, a court of justice andan investment bank. The most advanced of these is for a Pan-AfricanParliament to serve as the law-making body of the organisation. This issupposed to have five members from each state and is scheduled to hold its

African Union (AU)

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inaugural meeting in March 2004 (although this was put back in January). Theremaining institutions are unlikely to be established in the foreseeable future.

The AU also aims to have common defence, foreign and communicationspolicies, based loosely on those of the EU. The success of the AU, like that of itspredecessor, will depend on the individual performance of its 53 memberstates, many of which suffer from very weak governance. The OAU wascriticised for ineffectiveness—little real action resulted from its policy decisions—and it is not clear how the AU will differ. But the organisation fills the need fora forum for discussing the continent's problems and the idea of pan-Africanunity exerts a strong hold over member countries. Many of the proposed newinstitutions and policy co-ordination mechanisms are costly and cannot befunded within the AU's current resource allocations. In early December 2003donors and external lenders expressed their full support for the AU's initiativesand the creation of new institutions. Another problem for the OAU was that itwas hindered by a shortage of funds, because many members failed to paytheir membership dues. This is unlikely to change and several states arecurrently banned from voting in the AU because of this. In addition, mostAfrican states are unlikely to give up the sovereignty required to make severalof the proposed initiatives—such as a single currency or a court of justice—operate effectively. Less costly initiatives that could more effectively promoteAfrican unity include trade integration, particularly the rationalisation of themany overlapping regional trade blocs; regulatory harmonisation; and thepromotion of the rule of law and macroeconomic stability.

The principle of non-interference, which has been a major hindrance to theresolution of conflicts on the continent, is a contentious issue among membergovernments. Although non-interference was enshrined in the old OAU, the AUis attempting to tackle this issue. However, to date, it has shown the old OAUtendency to support existing governments, including that of Didier Ratsiraka inthe disputed Madagascar elections of December 2001 (although hesubsequently left office) and of the Zimbabwean president, Robert Mugabe,following his disputed re-election in June 2002. However, this could change ifthe proposed Peace and Security Council (PSC), which is to replace the OAU'sMechanism for Conflict Prevention, Management and Resolution, is set up.

Modelled on the UN Security Council, it is envisaged that the PSC couldsanction military intervention in member states in cases of genocide,unconstitutional changes of government and gross human rights abuse. The AUheads of state conference held in Maputo, Mozambique, in July 2003 discussedthe PSC but failed to reach agreement as member governments are wary ofcondoning intervention in their own affairs. At the end of 2003 23 countrieshad ratified the convention, which means that the support of an additionalfour countries is required for it to come into effect. A series of meetings ofAfrican defence ministers will be held in 2004 in order to try to agree on thesecurity and legal ramifications of the PSC. If established, it is planned that thePSC will have a standing armed force comprising five battalions at its disposalby 2010. Western countries have promised to help fund the force if it isestablished. Even without the establishment of the PSC, since May 2003 the AUhas had an observer mission in Burundi, led by South Africa and including

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troops from Mozambique and Ethiopia, to help enforce a peace agreement inBurundi's civil war.

In practical terms, the most high-profile AU event is the annual conference ofheads of states, which is hosted by the member state that is due to hold thechairmanship of the organisation for the next year. The current chairman of theAU is the Mozambican president, Joaquim Chissano, who took over from SouthAfrica's Thabo Mbeki in July 2003. The day-to-day affairs of the AU aremanaged by the AU commission, which is modelled on the EU commissionand was endorsed by the AU heads of state summit in July 2003. Thecommission is headed by the former Malian president, Alpha Konaré, aided bya deputy, Patrick Mazimhaka of Rwanda, both of whom were elected at thesummit. There are also seven appointed AU commissioners.

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Basic data

26,338 sq km

8.2m (Rwanda National Census, 2002)

311 people/sq km

Kigali (capital), population 750,000 (2001 estimate)

Tropical, moderated by altitude

Average annual temperature, 19°C; average monthly rainfall, 85 mm

English, French and Kinyarwanda

Metric system

Rwandan franc (Rwfr) = 100 centimes. Average exchange rate in 2003,Rwfr537.66:US$1; exchange rate on March 26th 2004, Rwfr557.25:US$1

2 hours ahead of GMT

January 1st (New Year's Day), February 1st (Heroes' Day), April 7th (GenocideMemorial Day), May 1st (Labour Day), July 1st (Independence day), July 4th(Liberation Day), August 15th (Assumption), September 25th (Kamarampaka/Republic Day), October 1st (Patriotism Day), November 1st (All Saints' Day),December 25th (Christmas Day)

Land area

Population

Time

Public holidays

Population density

Main town

Climate

Weather in Kigali

Languages

Measures

Currency

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Politics

The present government came to power in 1994 when the Rwandan PatrioticFront (RPF) overthrew the previous government and ended the genocide ofTutsis and moderate Hutus that had been unleashed. Presidential andlegislative elections in the second half of 2003 officially marked the conclusionof the nine-year transition to normal, open, party political activity. As expected,the elections produced a resounding victory for the governing RPF and thepresident, Paul Kagame. However, the democratic process established in thecountry is still heavily constrained and places most of the real power in thehands of the RPF. Most of the opposition parties have in effect been silenced byrestrictive new regulations or state manipulation.

Political background

Human settlement in Rwanda and Burundi began with the Twa (pygmy)hunter-gatherers, who have inhabited the countries' rainforests for thousands ofyears. Increased task specialisation, in part because of population pressures,gave rise to the emergence of a cattle owning class known as Tutsi around1000 AD. The Tutsi monarchy began its expansion in the 15th century, and themwami (king), Kigeri Rwabugiri, had brought the last independent Tutsichieftaincies under royal control by 1895.

The meanings of Hutu and Tutsi

The meaning of an ethnic name evolves, although its authenticity derives from itsappeal to tradition and history. Rwandans are divided over whether the origins ofthe terms Hutu and Tutsi lie in class or ethnicity, and this division has deeplyinfluenced the politics of the past 40 years. Respective meanings of Hutu and Tutsiinclude client/servant and patron/master, although the primary meanings now referto parentage and lineage.

Colonial rule shaped the meanings of Hutu and Tutsi, partly because of thespeculative and inaccurate theory of the Tutsis' supposed racial superiority. Physicaldifferences were invoked by the colonial authorities to perpetuate these distinctions,with the result that the tallest and lightest-skinned were cast as Tutsi archetypes andthe shortest, stockiest and darkest-skinned as their Hutu counterparts.

The changing economy, including enforced coffee cultivation, transformed Rwandansocial relations. Patron-client relationships previously based on cattle werefundamentally altered once patrons acquired coffee plantations and clients becamewage labourers. To the wage labourers, Tutsi came to imply boss, while ownersincreasingly equated Hutus with labourers. In the charged atmosphere just beforeindependence, these terms easily became "exploiter" and "the mob", respectively.

The terms Hutu and Tutsi have assumed new, polarised meanings after the atrocitiescommitted in Rwanda and Burundi since independence. Being a Tutsi today is tobelong to a community massacred in 1959, 1973 and 1994, and to be still threatenedby genocide. To be a Hutu is to belong to the ethnic group massacred in Burundi in

The development of theTutsi monarchy

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1972, 1988, 1990 and 1991, in northern Rwanda in 1990-94, and subsequently ineastern Zaïre and Congo.

Belgium assumed control over the territory, named Rwanda-Urundi, followingGermany's defeat in the first world war, and in 1926 the colony was incorpor-ated administratively with neighbouring Belgian Congo. In the 1920s and 1930sthe colonial authorities imposed cash taxation and extensive coffee planting. In1926 local government reforms merged the separate land, cattle and armychieftaincies as one post, greatly increasing Tutsi political control and Huturesentment at local level. Urged on by a mistrustful and impatient UN, Belgiumexperimented with limited democratic reform in the early 1950s. Fearing thatthe longer the Belgians experimented with democracy the more likely theywere to bequeath a system that would reflect the population as a whole andentail Hutu majority control, Tutsi politicians demanded immediate in-dependence for Rwanda, hoping to organise subsequent elections to their ownadvantage. Backed by Roman Catholic missionaries, the White Fathers, and thecolonial administration, a Hutu Catholic catechist and advocate of socialrevolution to empower Hutus, Grégoire Kayibanda, emerged as a major polit-ical force. Monarchists founded the Union nationale rwandaise (UNAR), andMr Kayibanda the Mouvement démocratique républicain-Parmehutu (MDR-P).

The Belgians, worried by the assertiveness of UNAR, switched allegiances andbegan providing assistance to the MDR-P. In 1959 the mysterious death of themwami sparked politically orchestrated communal violence, known as themuyaga ("wind"). Thousands of mostly Tutsi casualties followed, with a further300,000 or thereabouts fleeing for Burundi and Uganda. The MDR-P woncommunal elections in 1960, which led to more ethnic killings and a furtherexodus of refugees. In 1961 the MDR-P toppled the monarchy in a coupsupported by Belgium, broke with Burundi and was formally grantedindependence in July 1962, with Mr Kayibanda as its first president.

By 1973 the MDR-P government had achieved little and was practicallybankrupt. Invasions by refugee groups provoked increased internal repressionof Tutsis by the government, which threatened to get out of hand. In July 1973the army chief-of-staff, Major-General Juvénal Habyarimana, staged a successfulcoup d'état, claiming that such a course of action was necessary to restoreorder. Further politically organised violence followed, during which around100,000 people were killed. Some victims were from the MDR-P, includingMr Kayibanda, but most were ordinary Tutsis. Tens of thousands more Tutsisfled to Burundi and Uganda. Mr Habyarimana dissolved parliament, bannedthe MDR-P and established the Mouvement révolutionnaire national pour ledéveloppement (MRND). Civilian rule, under one-party government, was intro-duced in 1978, and a legislature, the Conseil national du développement (CND),was established in 1981, although the real power was to remain withMr Habyarimana and the MRND central committee for the whole of the 1980s.

In September 1990 Ugandan-based Tutsi refugees, their children and many whohad belonged to the National Resistance Army (NRA) of the Ugandanpresident, Yoweri Museveni, invaded Rwanda under the banner of the RPF andseized control of large swathes of territory, perpetrating massacres along the

Tutsi rule suffers an abruptand violent end

A refugee invasion results in apower-sharing agreement

The colonial period breedspolitical polarisation

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way. In 1991 the RPF's advance on the capital, Kigali, was blocked by Frencharmed forces—an important, although covert, element of France's military co-operation with Rwanda.

The threat posed by the RPF, combined with donor pressure, particularly fromFrance, led to the MRND finally sanctioning multiparty politics. The mostsignificant of the new parties was a revived MDR (the MDR-P having droppedthe "P"), the leader of which, Dismas Nsengiyaremye, became prime minister ofthe transitional government in 1992. Negotiations between the new govern-ment and the RPF at Arusha, Tanzania, resulted in a settlement in August 1993under which the RPF were to join the government. However, the Arushaagreement was unacceptable to the MRND elite, some of whom covertlyformed the Hutu supremacist Coalition pour la défense de la république (CDR)in order to resist it. The CDR, senior army officers and others opposed to theArusha agreement who had remained in the MRND began to arm and trainradical Hutu militias. In 1993-94 Mr Habyarimana orchestrated splits in theopposition, thus delaying the implementation of the Arusha agreement.

Recent political developments

Given the reluctance of the MRND, the Arusha agreement was never reallyimplemented. Against the background of increased political uncertainty onApril 6th 1994, unknown assassins shot down Mr Habyarimana's plane overKigali. An elite faction, apparently led by a Rwandan army colonel, ThéonesteBagasora, and operating according to a predetermined plan, installed a newgovernment and immediately launched the elimination of its politicalopponents, including moderate Hutus, and the genocide of all Tutsis. The mainparticipants in the systematic massacres were the MRND and CDR militias,respectively known as the Interahamwe and Impuzamugambi, and the army,although thousands of civilians took part either voluntarily or throughcoercion. The UN Security Council had been informed months earlier aboutplans to implement the genocide, although when the killing began thisinformation was misleadingly represented by council members as chaotic tribalwarfare. The killing of Belgian soldiers by the Interahamwe was followed, asthe killers had hoped, by the prompt withdrawal by the UN of all but 270 of itstroops. Those that remained played little role in subsequent events. Thegenocide intensified after the departure of the UN troops, and an estimated800,000-1m people were killed in around 100 days.

The RPF renewed its offensive when the killings started and took Kigali onJuly 19th. The RPF's advance ended the genocide—although it was held up for atime in the west by a controversial military-cum-humanitarian French inter-vention force, Operation Turquoise, which was deployed in northern andsouth-western Rwanda in mid-June—and facilitated the withdrawal of membersof the former regime before departing in mid-August. The RPF advance pre-cipitated a mass Hutu exodus of over 2m people to (the then) Zaïre, Tanzaniaand Burundi, orchestrated by members of the former regime. The refugeesgathered in huge camps run by the office of the UN High Commissioner forRefugees and international aid agencies, where tens of thousands died of

Genocide is unleashed

The RPF takes power

12 Rwanda


disease in full view of the international media. Aid agencies slowly stabilisedthe situation, while the government-in-exile and the militiamen regrouped,establishing political control over the refugee camps partly by supervising thedistribution of relief aid and by using intimidation to prevent refugees fromreturning home. Militiamen among the refugees used the camps in Zaïre andTanzania as bases from which to launch raids into Rwanda. In late 1996 the RPF,and a newly formed Zaïrean group, the Alliance des forces démocratiques pourla libération du Congo-Zaïre (AFDL) led by a (then) obscure figure, LaurentKabila, forcibly broke up the camps. A total of 1.2m refugees returned from Zaïrebetween November 1996 and January 1997. The Tanzanian government alsoexpelled 500,000 Rwandan refugees in January 1997. Hutu militias joined themass return, leading to a temporary upsurge of fighting within Rwanda. Theinsurgency, which was concentrated in the north-west, was eventually put downby the RPF, partly through a programme of creating villages. Hutu communityleaders were then drawn into local government structures in a move that helpedto ensure their neutrality, if not loyalty, vis-à-vis the Hutu militias. Sporadiccrossborder raids from the Democratic Republic of Congo (DRC) continue, butare no longer considered a serious threat to the government or to the security ofthe area.

War in the Democratic Republic of Congo

The RPF played a major role in the rise to power of Laurent Kabila in Zaïre, andinitially dominated the government. The country was soon renamed the DemocraticRepublic of Congo (DRC). In 1998 Mr Kabila drastically curtailed the RPF's influenceand ordered it out of the DRC. In response to security concerns over the sanctuarygranted to hostile rebel groups in the DRC, Uganda and Rwanda launched a majoroffensive against Mr Kabila's government in August 1998. The events that followedplunged Rwanda and the DRC into Africa's largest war, which at its height involvedseven sovereign states as direct combatants.

Following the peace agreement to end the conflict, signed in July-August 1999,limited progress has been made in disarming Hutu militias, for which size estimatesvary between 15,000 and 100,000. The Congolese government has handed overbetween 1,000 and 3,000 people who are said to be members of Rwandan anti-government militias as proof of its commitment to the disarmament of "negativeforces". In November 2003 Paul Rwarakabije, a senior commander with a DRC-basedrebel group, Forces démocratiques pour la libération du Rwanda (FDLR), voluntarilyreturned to Kigali with around 100 fellow FDLR officers.

The perception that the conflict in the DRC was a resource war, with the belligerentsusing political and security concerns as a cover for the plunder of the country'sresources, has become increasingly widespread. The Rwandan government, like allother parties accused of plundering the DRC, has denied this and has angrily insistedthat the security threat posed by anti-government militias based in the DRC is real.However, Rwanda has undoubtedly benefited from unrecorded mineral exportsfrom the DRC and probably still benefits from illicit gold and diamond sales,although the war has depressed trade between the two countries, to the detrimentof the Rwandan commercial sector.

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Between October 1999 and March 2000 an extensive government shake-uptook place. The parliamentary speaker, Joseph Sebarenzi, fled into exile in theUS; three cabinet ministers and the prime minister, Pierre-Célestin Rwigyema,were forced to resign; the president, Pasteur Bizimungu, a Hutu, resigned andwas succeeded by the vice-president, Paul Kagame. Mr Bizimungu wasimprisoned in April 2002 for having founded the Parti démocratique pour lerenouveau (PDR), which the government alleged promoted ethnic division. In afurther blow to the Rwandan government's already tattered image ofinclusivity, Mr Kagame removed Brigadier Emmanuel Habyarimana from thecabinet. Formerly an officer in the Forces armées rwandaises (FAR, the formerRwandan army), he had been minister of defence. Mr Habyarimana defected toUganda in March 2003.

In May 2003 the government announced the dates of the country's firstpresidential and legislative elections since independence: August 25th andSeptember 30th respectively. Shortly afterwards, the MDR, the country's largestopposition party, was dissolved on the recommendation of the multipartyparliamentary committee, which included members of the MDR but in whichthe RPF played the decisive role. Safari Stanley, the main MDR committeemember supporting the party's dissolution, was later appointed a senator byMr Kagame. Two parties founded by prominent MDR officials subsequentlyapplied to the Electoral Commission for registration: the application of theAlliance for Democracy, Equality and Progress-Mizero (ADEP-Mizero), foundedby Célestin Kabanda, which was critical of Mr Kagame and the RPF, wasrefused, while the application of the Parti du progrès et la concorde (PPC),founded by Alvere Mukabaramba, was granted. After the elections, Mr Kagameappointed Ms Mukabaramba a senator.

Mr Kagame won the presidential election by a landslide, officially receiving 95%of the vote. The presidential election was monitored by observer teams fromthe EU, the African Union (AU), Switzerland, Norway, Canada and South Africa.The AU and South African teams endorsed the poll, but the EU alleged theintimidation of the opposition in the build-up to the vote, and "irregularitiesand instances of fraud" during the poll itself, and concluded that "optimalconditions for free and fair elections were probably not entirely met". Thegovernment denied the charges and accused the EU monitors of having wanteda former prime minister, Faustin Twagiramungu, to win. Mr Twagiramungu,who had lived in exile in Europe for many years, challenged Mr Kagame in thepresidential election as an independent. He subsequently contested the validityof the election result in the Supreme Court on grounds of electoral malpracticebut the case was thrown out, leaving Mr Twagiramungu with little option butgrudgingly to accept the result.

In the first round of the legislative election, 53 of the 80 National Assemblyseats were contested under a system of proportional representation. Sevenparties, four of which are in an alliance with the RPF, secured the 5% requiredto win a seat, but the PPC and all the independent candidates failed to do so.As a result, nothing remains of the MDR in the new National Assembly, whilethe RPF and its allies won 40 seats, with the Parti libéral (PL) and the Parti

Mr Kagame and the RPFtriumph in the elections

The main opposition party isbanned in run-up to elections

The RPF consolidates its holdon power

14 Rwanda


social démocrate (PSD), both of which supported Mr Kagame's candidature forthe presidency, securing the balance. The rest of the seats were reserved for"special groups", including youth, disabled and women's groups. OnOctober 9th National Assembly members and senators, including fourappointed by Mr Kagame, were sworn into office, and on October 19thMr Kagame appointed his new cabinet. Most former cabinet ministers kepttheir jobs in the new government, including Donald Kaberuka, the country'slong-serving minister of finance, the minister of foreign affairs, CharlesMurigande, and the minister of defence, Marcel Gatsinzi.

Rwanda: result of presidential election, Aug 25th 2003Candidate Party % of votePaul Kagame Rwandan Patriotic Front (RPF) 95.0

Faustin Twagiramungu Independent 3.6Jean-Nepomuscene Nayinzira Parti démocrate centriste (PDC) 1.3

Source: National Election Commission.

Rwanda: result of legislative election, Sep 30th 2003Party No. of seatsRwandan Patriotic Front (RPF) 33Parti démocrate centriste (PDC)a 3

Parti démocratique idéal (PDI)a 2Parti socialiste rwandais (PSR)a 1Union démocratique du peuple rwandais (UDPR)a 1

Parti social démocrate (PSD) 7Parti libéral (PL) 6

Total 53

a In an alliance with the RPF.

Source: National Election Commission.

Important recent events

April-July 1994: The aircraft carrying the president, Juvénal Habyarimana, is shotdown over Kigali. A rump government begins the genocide against Tutsis andmoderate Hutus. The Rwandan Patriotic Front (RPF) renews its offensive and takespower in July, precipitating a mass exodus of Hutu refugees to Zaïre.

May 1997: The Alliance des forces démocratiques pour la libération du Congo-Zaïre(AFDL) and Laurent Kabila take power in Zaïre, now the Democratic Republic ofCongo (DRC), with Rwandan assistance.

August 1998: Rwandan soldiers and Congolese Tutsis launch a rebellion againstMr Kabila in the DRC.

July-August 1999: Rwanda and other parties to the conflict sign the Lusaka Accord,intended to end the war in the DRC.

March-June 2000: Concluding several months of high-level political turmoil, thepresident, Pasteur Bizimungu, resigns and is replaced by the vice-president, PaulKagame. In June clashes between Rwandan and Ugandan troops in Kisangani ineastern DRC leave hundreds of casualties, provoking international condemnation.

Rwanda 15


July 2002: The government signs the Pretoria Agreement, committing it towithdrawing from the DRC. The Rwanda Defence Force (RDF) later pulls out, onschedule, in October 2002.

October 2002: Rwanda is named in the final report of the UN panel investigatingresource exploitation in the DRC. Together with other countries, commercialexploitation is adjudged to have replaced security as the prime motive for itspresence in the DRC.

February-May 2003: The newly approved constitution includes controversialmeasures that restrict personal freedoms, in the name of national unity.

August-October 2003: The first multiparty presidential and legislative electionssince independence see Mr Kagame and the RPF returned to power with massivemajorities, but many observers protest at the alleged intimidation of oppositionactivists prior to the poll.

Constitution, institutions and administration

A new constitution, in preparation since 2001, was approved by 93% of theelectorate in a referendum in late May 2003 and signed into law in early June.The constitution, drawn up after extensive consultation across the country by aspecially appointed commission, reflects the viewpoint of the RPF. It accordsRwandans most basic civil liberties, such as freedom of association and thelegal presumption of innocence until guilt is proven, but these arecircumscribed by the prohibition of any activity deemed divisive by the state.Multipartyism is entrenched in the constitution, but all parties are obliged "toreflect Rwandan unity". The constitution adds a Senate to the existing NationalAssembly, and formalises the position of the parliamentary multiparty forum,which has at times controversially orchestrated the removal of cabinetministers and National Assembly members for alleged misconduct. Theconstitution also grants more powers to the president than those laid down inthe Arusha agreement concluded between the (then) government and the RPFin 1993, which had been Rwanda's main constitutional text since 1994. Duringthe negotiations leading to the 1993 agreement, however, the RPF had arguedstrongly in favour of decreasing presidential powers, in an effort to curb theinfluence of the (then) president, Juvénal Habyarimana.

The judiciary is constitutionally independent and its rulings are binding on theexecutive and legislature. Appointed by the government, it has never displayedmuch de facto independence and can usually be relied on to deliver verdictsfavourable to the authorities. A seven-member Human Rights Commission wasset up in 1999, which, although occasionally critical of the government, hasnever tackled it head-on over any important issue. An AnticorruptionCommission was established in 1999, composed of 12 civil servants, but it has alow profile and is overshadowed by the more powerful, RPF-chaired,parliamentary multiparty forum.

A new constitution

The judiciary

16 Rwanda


Seeking justice after the genocide

Genocide trials began in Rwanda in December 1996. Although nearly 10,000 trialshave been completed, over 90,000 people remain in prison awaiting trial. In order tospeed up the judicial process for genocide cases, the government revived atraditional judicial process (gacaca). A total of 260,000 gacaca judges were elected inOctober 2001, and pilot gacaca trials began in June 2002. The government initiallyhoped that the entire genocide caseload could be processed using gacaca by 2005,but a delay seems likely since, by March 2004, although some preparations had beencompleted, mass gacaca trials had not yet begun. Around 25,000 genocide suspects,primarily the very old, the very young, the terminally ill and those who haveconfessed to genocide, were provisionally released in January 2003. The move wasunpopular with genocide survivor associations, who feared that it would undermineboth the safety of their members and the gacaca process, but it has certainlyencouraged further confessions from prisoners. A March 2004 deadline forconfessions led to over 60,000 prisoners confessing to participation in the genocideby this date, and the deadline was subsequently extended for another twelvemonths.

Genocide trials have also been under way since 1995 at Arusha, Tanzania, under theauspices of the UN International Criminal Tribunal for Rwanda (ICTR). The ICTR hascompleted 21 trials during this time, resulting in 18 convictions and three acquittals.Several major trials are in progress, including that of Mr Bagasora, who is said tohave masterminded the genocide. The prosecutor's office—headed since September2003 by Bubacar Jallow, a Gambian judge who had previously led an expert panelon the workings of UN war crimes tribunals and judged war crimes in Sierra Leone—had hoped for a further 136 prosecutions, but this has been slimmed down to 26,some of which Mr Jallow hopes can take place in national courts, so that the ICTRcan wind down, as planned, in 2008. Despite opposition from the Rwandangovernment, Mr Jallow's predecessor, Carla Del Ponte, sought to prosecute membersof the RPF for war crimes, but Mr Jallow has not yet indicated his position on thematter. Prior to Ms Del Ponte's departure, the prospect of trials for RPF members, aswell as the slow pace of the ICTR to date and controversies surrounding the cross-examination of genocide survivors, led to poor relations and weak co-operationbetween the Rwandan government and the tribunal.

Government administration is centralised and hierarchical, but is undergoingextensive reform under a rolling decentralisation programme. Under theprogramme, resources and responsibilities currently exercised by centralgovernment are being devolved to local level. The process is not an easy one,and has been hampered at every stage by capacity problems, but nonethelessprovinces and districts have more powers than they used to, and many of thewide-ranging powers of district mayors (formerly bourgmestres) have beendevolved to elected councils. Mayors are also now elected by these councils.

Political forces

The RPF is currently the main political party, controlling the presidency and thearmed forces. It has been the dominant force in the National Assembly andgovernment since 1994. The party is predominantly English-speaking and Tutsi,

Local government

The RPF's agenda isto retain power

Rwanda 17


with a technocratic and broadly liberal economic focus. The party professes acommitment to political pluralism but in practice has proved unwilling toloosen its grip on power and allow space for genuine non-violent opposition.Despite repeated allegations from its many critics to the contrary, the RPF insiststhat it is not anti-Hutu, although most Hutus awarded top posts in governmenthave not lasted long and on departure from office have usually fled thecountry. Nonetheless the RPF has apparently made considerable progress inconvincing ordinary Hutus of its even-handedness and administrativecompetence, and both the party and its president would probably have securedcomfortable victories in the elections of 2003 without any electoral malpracticefor this reason. The party has adopted an essentially military approach toforeign policy since taking power, although, since the 2003 elections, it has triedto project a more diplomatic image in the region.

The 2003 elections saw seven political parties, including the RPF, securing seatsin the 80-member National Assembly. The RPF lacks an overall majority, butfour of the other six parties are in an alliance with the RPF and have nodistinctive identities. The remaining two parties, the PL and the PSD, have13 parliamentary seats and two cabinet posts between them. Both parties wereestablished when Mr Habyarimana legalised multipartyism in 1991 and were inthe transitional government and the National Assembly from 1994 to 2003.Both supported Mr Kagame's candidature for the presidency. With the MDRdissolved, its radical successor, the ADEP-Mizero, denied permission to register,and the MDR's moderate successor, the PPC, having failed to win parliamentaryrepresentation, there is no credible democratic opposition.

Parties in government, Apr 2004No. of ministries incl presidency

Rwandan Patriotic Front (RPF) 7Parti social démocrate (PSD) 1

Parti libéral (PL) 1Parti démocrate centriste (PDC) 1

Independents 7

Source: Economist Intelligence Unit.

Many dissident political parties are operating in exile, seeking to build a unitedfront and to challenge more effectively what they regard as the RPF'sdictatorship. Western governments share some of the concerns of the exiledopposition, but are inhibited from working too closely with the parties becauseof the association of many of them with genocide and Hutu supremacism.

There are still some armed groups in opposition to the Rwandan governmentbased in the DRC, formed by members of the former Rwandan armed forces,elements of the Interahamwe militias responsible for the 1994 genocide andnew recruits, most of whom are now grouped under the Forces démocratiquesde libération du Rwanda (FDLR). Since the formation of a new transitionalnational government in the DRC in mid-2003, assistance to the FDLR from ele-ments within DRC state structures appears to have fallen away, and the militiahas come under some pressure to leave the country. A number of fighters havedone so, either returning to Rwanda and abandoning their struggle, or heading

The political allegiancesof armed groups

18 Rwanda


for Burundi and pursuing it with Burundian Hutu militia. The majority,however, have remained in the DRC and continue to operate in North andSouth Kivu. The Rwandan government rejects demands for negoti-ations by thearmed opposition, branding its leaders war and genocide criminals. Thus far,most of the international community has supported this view.

Main political figures

Paul Kagame: Elected president by a huge majority in 2003 and unchallenged fromwithin his party, the Rwandan Patriotic Front (RPF), Mr Kagame's position remainsunassailable. Mr Kagame has directed Rwanda's military-driven foreign policy sincethe RPF took power in 1994, but has shown signs since the 2003 election of crafting agentler approach designed to win back Western allies who distanced themselvesbecause of the war in the DRC. At home, Mr Kagame has proved an effective andoften bold administrator, but the credibility of his commitment to good governancehas been undermined by a growing intolerance of dissent.

Charles Murigande: The secretary-general of the RPF and foreign minister sinceNovember 2002, Charles Murigande has also chaired the powerful multiparty parlia-mentary forum. Before taking up his new post he played a leading role in managingdiplomatic relations with Uganda following the clashes of 1999-2000, and in hiscurrent position has been prominent in restoring relations with the DRC.

Donald Kaberuka: The minister of finance since October 1997, and one of thelongest-serving ministers in government, Donald Kaberuka occasionally hints atretirement but is still too valuable for Mr Kagame to let go. A respected technocrat,particularly among donors, Mr Kaberuka has crafted the government's generallycompetent economic management and policy, but has come under pressure since2003 because of faltering national economic performance and the government'sstrained relations with the IMF.

Marcel Gatsinzi: The minister of defence since November 2002, Marcel Gatsinzi is aHutu and former member of the Forces armées rwandaises (FAR), which fought theRPF for control of Rwanda in 1990-94. He replaced Emmanuel Habyarimana, whofled to Uganda in March 2003, as minister. His position is precarious, but he seemsto be trusted by the RPF for the time being.

Tito Rutaremara: The RPF's senior intellectual, he chaired the constitutional com-mission that successfully completed its work in late 2002 and is currently the stateombudsman, charged with investigating corruption and malpractice, particularly inthe public sector.

International relations and defence

Uganda, Rwanda's main economic partner, is a major source of imports andthe main conduit for its exports. The RPF has close historical links with theruling National Resistance Movement (NRM), but competition between thecountries' two armed forces in the DRC, which degenerated into open warfarefrom late-1999 to mid-2000 has severely damaged relations. There have beensigns recently of a thaw in relations. Uganda's president, Yoweri Museveni,attended Mr Kagame's presidential inauguration in September 2003 and was

Uganda

Rwanda 19


loudly applauded by the crowd, which evidently hoped that this heralded along-awaited rapprochement between the two men.

The governments of Rwanda and Burundi share strategic interests, since pre-dominantly Tutsi armed forces are the true power base of both, and both facerebel opponents operating from the DRC who have formed an informal pan-Hutu alliance. Nonetheless, relations with Burundi are lukewarm. Rwandawishes to ensure that Burundi does not collapse into further anarchy, norbecome a base for anti-Rwandan government militias or, worse still, for ahostile Hutu-led government. The Rwandan government has tended to supportBurundi's peace process, although the successful implementation of a peaceagreement between the Burundian government and the Hutu militias wouldrepresent a challenge to its position to which military combat, rather thannegotiations, is the most appropriate response.

Since the end of hostilities and the withdrawal of Rwanda's armed forces fromthe DRC, Rwanda's main ally has been the Rassemblement Congolais pour laDémocratie (RCD), which nominally controls the east of the country. It has alsonegotiated alliances with other, smaller Congolese militias, particularly inNorth Kivu. Rwanda has developed extensive commercial and political interestsin eastern DRC, which it used to finance its military campaign and which manyallege became the main motivation for its continued presence in the country. InMarch 2004 Rwanda reopened its embassy in the DRC, marking continuedprogress in the normalisation of relations between the two countries.

Rwanda has cordial but cool relations with Tanzania. The major irritant formany years between the two governments was Rwandan refugees in Tanzania,but these were repatriated in late 2002. There are suspicions within Rwandathat the Tanzanian government covertly supports the Rwandan rebels, althoughit vehemently denies this allegation.

Since 1994 Rwanda has had close relations with South Africa, a major source ofinvestment in telecommunications, aviation and tourism. The South Africangovernment has proved sympathetic to Rwanda's security concerns in the DRC,although this position has opened it to charges that it is biased in favour ofRwanda. South Africa is playing a significant role in mediating the peaceprocess in DRC, and is responsible for verifying the implementation of the 2002peace agreement, under the terms of which Rwanda was required to withdraw.

Rwanda receives considerable support from the international donor com-munity, because its competent economic management is judged capable ofreducing poverty. International recognition has also been given to the securitythreat from armed groups in the DRC because of lingering international guilt atthe failure to stop the genocide. The UK is the main bilateral ally, and bothLabour and Conservative administrations have supported Rwanda. Relationswith the US were warm during Bill Clinton's presidency, but have notablycooled since George W Bush took office. The current US administration wishesto achieve a balance in its relations with Rwanda and the DRC. Relations withFrance have long been strained as France gave staunch support to the former

Burundi

Democratic Republic of Congo

Tanzania

South Africa

Relations with donors

20 Rwanda


government. France is perceived to be hostile and continues to use its influencewithin the EU and the UN Security Council to counter what it regards asRwandan hegemony in the region.

The Rwanda Defence Force (RDF) consists mostly of RPF troops, along withseveral thousand soldiers integrated from the former Rwandan army. The RDFis one of the most battle-hardened and disciplined forces in Africa, and since1994 has ensured Rwanda a political status in the region out of all keeping withthe country's tiny size and meagre resources. The old gendarmerie, formerlycontrolled by the Ministry of Defence, was disbanded in 2000 and replaced bya police force under the control of the Ministry of the Interior. The governmentis continuing its demobilisation, with support from donors for the resettlementof demobilised personnel, with the aim of eventually reducing the army to25,000.

Military forces, mid-2002Rwandan Patriotic Army 40,000Air force 1,000

Police 10,000Forces abroada 15,000-20,000

Armed oppositiona 15,000a Estimates.

Source: International Institute for Strategic Studies, The Military Balance 2003-2004.

Resources and infrastructure

Population

It is estimated that in 1994 800,000-1m of Rwanda's (then) population of 7.6mwere killed and another 2m displaced as refugees outside the country. Sincethen there have been further epic population movements. Up to 200,000refugees have died in exile, although most others have returned. Some 220,000children are orphans and more than 90,000 people are in jail on suspicion ofgenocide. However, population movements are now largely at an end. In 2002a national census put the population at 8.2m. Ethnic monitoring is illegal inRwanda, but Hutus are thought to outnumber Tutsis by at least 4:1. The Twa(pygmy) community, estimated at 30,000 in 1993, is now believed to numberless than 15,000.

Population, 2002(m)

Total 8.2 % change, year on year 2.9

Sources: National Census Commission; World Bank.

Rwanda has the highest population density in Africa. In 2002 this was311 people per sq km, compared with 183 per sq km in 1981. Some 92% of thepopulation lives in rural areas, and rural population density relative to arableland is 430 per sq km. Poverty monitoring by the Rwandan government isbased on the findings of a household living conditions survey conducted in

A young population

Defence

Rwanda 21


2001 as part of the poverty reduction strategy paper (PRSP). This paper definesthe poverty line as adult income of Rwfr64,000 per year (US$140). Using thismeasurement, 60% of Rwandans live in poverty. One legacy of the 1994genocide is that one-third of households are headed by women and 20% bywidows. According to official estimates, in 2000 46% of Rwandans were agedunder 15 and 53% were women. Most of Rwanda's 4m economically activepeople are subsistence farmers. According to official statistics, only around65,000 Rwandans are in salaried employment, mostly in the civil service;however, these figures do not fully capture self-employment and employmentin small to medium-sized enterprises.

Owing to major population movement during the last few decades, calculatingRwanda's population growth is difficult. It is estimated to have averaged 2.5% ayear between 1980 and 1998, on a par with regional standards. The growth ratehas averaged 2.9% since 1999—one of the most rapid rates of populationincrease in the world.

Education

Following the trend of Sub-Saharan Africa, and as part of the World Bank'sgeneral strategy, recent budgets have included funding for the introduction offree primary education. Net primary school enrolment (the ratio of the numberof children of official primary school age enrolled in school to the number ofchildren of official primary school age in the population) is almost 100%, higherthan the Sub-Saharan average, although only 39% of pupils actually remain forthe full five years. The quality of primary education remains poor, albeit muchimproved: in 1996 only 47% of primary school teachers had received anytraining, but by 2000 the figure had risen to 63%. The adult literacy rate is 50%.Studies conducted for the PRSP showed that those who complete primaryschooling earn on average 40% more than those who do not. The government'spolicy to provide basic education for all, including vocational education andfunctional adult literacy by 2015, has been endorsed by observers, but there isconsiderable criticism of the practicalities of such expenditure, particularly attertiary level. At secondary level, where net enrolment is currently around 7%,and very few students come from low-income households, the governmentaims to boost enrolments, particularly among the poor. Fewer than 1% ofRwandans enrol for tertiary education, compared with a Sub-Saharan Africanaverage of 2% in 1998.

There is little vocational training available and little co-ordination between theeducational curriculum and the needs of the labour market. As part of movesto change this, the Kigali Institute of Science and Technology has been estab-lished. Preparation of a new national syllabus and examination system hasbeen under way for several years and is keenly awaited. English and French aretaught from primary level upwards in theory, but in practice language learningdepends on teacher availability. Education received 20.2% of governmentexpenditure in 2001, about 2% of GDP, and this proportion is set to rise with theimplementation of the PRSP.

Universal primary education issought by 2005

22 Rwanda


Health

Rwanda's healthcare infrastructure has been largely rebuilt since the genocide,and the emphasis is now less on reconstruction than on decentralisinghealthcare. In 2001 there were a total of 358 health centres, an average of abouttwo per district (formerly communes). The Ministry of Health has dividedRwanda into 40 health districts, 33 of which have district hospitals. In addition,there are four referral hospitals. Churches operate more than 40% of healthcentres and district hospitals, while in the commercial private sector there isjust one tertiary hospital, in Kigali, and a few private clinics. Access tohealthcare, at 87%, is among the highest in the region, although there are only1.8 doctors and 17.9 paramedics per 100,000 people. In an attempt to boostaccess to healthcare, the government is trying to decentralise healthcareprovision and is promoting a community health insurance scheme (mutuelles).Communities subscribe less than US$10 per year to join. Membership grantsfree access to state health facilities.

The Ministry of Health received 5% of total government spending in 2001, upfrom an average of 2-3% in 1995-99. However, state expenditure on health is stillonly 0.5% of GDP, just one-quarter of the Sub-Saharan average. Internationaldonors pay for 60% of total expenditure and nearly all capital expenditure onhealth services. Life expectancy in Rwanda is 49 years and the infant mortalityrate is 130 per 1,000 population, compared with Sub-Saharan averages of 54and 91 respectively. Less than one-half of the population has access to safewater. AIDS is becoming an increasingly serious problem: 14% of Rwandansaged 15 and over are HIV-positive, and AIDS patients fill 80% of hospital beds.Despite attempts at public health education, condom use is estimated at lessthan 10%. Fewer than 1% of HIV-positive Rwandans have access to anti-retroviral drugs, something that the government has set out to tackle in its mostrecent budget, proposing an extra Rwfr1.3bn (US$2.3m) for their purchase.

Natural resources and the environment

Most of Rwanda is hilly and lush, with mountains in the north-west. Thecountry is located just south of the equator and enjoys tropical weather. Thereare two rainy seasons: a short one between mid-October and early December,and the main one between March and June. Harvests follow in January andJuly-August respectively. Land and population settlement pressures are highand, unusually in Africa, there is no more currently uncultivated land availablefor exploitation. In 1994 part of the Akagera National Park was zoned forhuman settlement. Some 98% of Rwandans use charcoal for cooking, andremaining forested areas are shrinking owing to land pressure and theconsumption of wood fuel.

A steady investment in thehealth sector since genocide

A tropical country

Rwanda 23


Transport, communications and the Internet

Nearly all of Rwanda's imports and exports travel over 1,500 km by roadthrough Uganda to or from the port of Mombasa in Kenya, or to Dar es Salaamin Tanzania. This situation contributes directly to the country's high transportcosts, making trade more expensive as a result. Rwanda has no railways. In thelong term, the government wishes to establish a rail link from Kigali to Isaka inTanzania, where a rail service runs to Dar es Salaam. Donors have not pledgedfunds for this proposal, although China is helping to finance a feasibility study.A dry port for Rwandan goods opened in Isaka in October 1999 has eased thebusiness of importing and exporting goods, although the port is hampered byproblems of infrastructure and bureaucratic shortcomings.

Rwanda's arterial roads already compare well with those in neighbouringcountries, and are being further improved. Rwanda has about 1,100 km oftarred roads, 400 km of which are in need of significant repairs. There areanother 12,000 km of unpaved main and secondary roads, which are vul-nerable to rain damage. The average distance from most households to a trunkroad is 4 km, and the furthest that anyone lives from a trunk road is 20 km.Despite considerable growth in private transport, the number of registeredvehicles recorded in national statistics shrank from 28,720 in 1999 to 27,018 in2000 because of the exclusion of official and diplomatic vehicles from thefigures. Commercial and public transport is in private hands.

A private company, Rwandan Airlines, runs internal air services. Direct servicesto Europe are provided by SN Brussels Airlines between Kigali and Brussels.Much intercontinental and international traffic is directed through the large andwell-serviced regional hub at Nairobi in Kenya, from which regular flights go toKigali. South African Airways flies from Johannesburg, and regular regionalservices run from Kigali to Entebbe, Uganda; Bujumbura, Burundi; AddisAbaba, Ethiopia; Dar es Salaam, Tanzania; and Kinshasa, Democratic Republicof Congo (DRC).

There are about 60,000 telephone lines in Rwanda, more than 90% of whichare in Kigali. Until recently, all services were provided by the state-ownedtelecommunications company, Rwandatel. Its possible privatisation took a stepforward with the sale in late September 2003 of around two-thirds of its 28%stake in the monopoly mobile phone company, MTN-Rwandacell, to MTN-Rwandacell's other two investors, MTN (South Africa) and Telstar. The deal hadbeen long awaited, but also long delayed because of wrangles between MTN-Rwandacell's shareholders over the value of the Rwandatel stake. The servicehad around 80,000 subscribers in 2002, up from 20,000 in 2000, and operatesin most Rwandan towns, as well as in large towns like Bukavu and Goma ineastern DRC. The disposal of Rwandatel's holding in MTN-Rwandacell clearsthe way for the full privatisation of Rwandatel, which is now expected to takeplace during 2004. It is planned that 80% of Rwandatel's shares will be sold to amultinational strategic investor, significantly higher than the 51% that hadoriginally been proposed. Of the remainder, 18% will go to Rwandan investorsand 2% to Rwandatel staff. Rwandatel will also be awarded a mobile phone

Transport

Air services

Telecommunications

24 Rwanda


licence of its own. Rwandatel has a monopoly on Internet service provision,and would-be competitors have found it impossible to establish themselvesthus far.

Radio is Rwanda's main medium of mass communication. Radio Rwanda isstate-owned and government-controlled, and does not broadcast items criticalof the government. Radio Burundi is popular, in part because it plays bettermusic. The BBC's Kinyarwanda service also attracts a keen audience. Genocidetrials at Arusha are covered by the independent radio station, Hirondelle.

The printed press, largely confined to Kigali, is hampered by high productioncosts and low sales. The main newspaper is the semi-official New Times. Alsopopular are the Kenya-based East African and the Ugandan Monitor, both ofwhich are available in the capital. The two main independent publications,Newsline and the Rwanda Herald, which were critical of the government, bothceased publication in mysterious circumstances during 2001. The RPF values a"patriotic" press, and the harassment and detention of critical journalists iscommon.

Energy provision

More than 90% of energy consumed in Rwanda comes from wood, peat andcharcoal. Electricity accounts for about 1% and petrol products make up theremainder. Rwanda produced 110m kwh of electricity in 2000, down from128m kwh in 1999, and imported a further 94m kwh, mostly from the DRC.Kigali accounts for two-thirds of national consumption. Fewer than 2% ofRwandan households have electricity. Bids from the private sector to managethe energy parastatal, Electrogaz, were received in late 2001, and the winnerwas finally announced in early 2003. The team is from a consortium thatincludes Lahmayer International and Hamburger Wasserwerke of Germany.Lake Kivu has reserves of methane gas estimated at 55bn cu metres. Use of thisresource is currently low, with the Gisenyi-based Bralirwa brewery the sole cus-tomer. An engineering study is currently under way to see if this gas resourcecan be more fully developed as a source of electricity for the national grid.

Driven by Rwanda's strong, energy-intensive GDP growth, imports of petroland diesel fuel have risen steadily in recent years, to US$36.7m in 2002. In 1998the national fuel parastatal, PetroRwanda, sold its network of filling stations toShell Uganda for US$50m. Engen (South Africa) bought BP-Fina's Rwandan andBurundian assets in the same year, but owing to constant bureaucraticobstruction and threats against its senior managers it sold these assets in 2001to a Rwandan consortium, reportedly for a modest sum.

Mass media

Energy is dependent onimports

Rwanda 25


The economy

Economic structureMain economic indicators, 2003a

Real GDP growth (%) 3.5Consumer price inflation (av; %) 7.5b

Population (m) 8.3

Current-account balance (US$ m) -110Total external debt (US$ m) 1,283c

Exchange rate (av; Rwfr:US$) 537.66b

a Estimates; b Actual; c World Bank figure for end-2001.


The structure of Rwanda's economy has remained unchanged for decades.Agriculture, the main employer, contributes just under one-half of GDP. Tea andcoffee, the main cash crops, contribute less than 2% of GDP, but usuallygenerate over 80% of export earnings. In 2001, however, for the first timeRwanda's largest export earnings were from mining, specifically from the saleof colombo-tantalite (coltan), which is alleged by many to have originated inthe eastern Democratic Republic of Congo (DRC). Export earnings from coltanwere substantial as a result of exceptional prices for the metal that year. Pricessubsequently dropped, and coltan was the third largest export earner in 2002,behind tea and coffee. Rwanda's manufacturing sector, which accounts forabout 20% of GDP, is small, and struggles to maintain market share in the faceof regional competition. Most manufacturing is in agricultural processing, butRwanda also produces a small range of general consumer goods. Commercedominates the tertiary sector, but the significance of telecommunications,banking and insurance is growing. Tourism has largely recovered to pre-genocide levels, although many potential visitors still regard the country as asecurity risk.

Gross domestic savings were negative between 1994 and 1998, but by 2000 hadrecovered to 2.7% of GDP, before slipping back to 2% in 2002, in part because ofrising effective tax levels. Private consumption during the early 1990s wasaround 75% of GDP, but rose after the war and genocide to 84% in 2002.Government consumption fell from a peak of 14.4% of GDP in 1992 to 8.9% in2000, but has since risen, largely because of increased expenditure resultingfrom the implementation of the poverty reduction strategy paper (PRSP). Publicconsumption was 12.9% of GDP in 2002 and is estimated at over 13% for 2003.Gross fixed investment climbed in the late 1990s, peaking at 18% of GDP in1999, but has since declined, to 14.7% of GDP in 2001. Reduced capitalexpenditure from donors is the main reason for the drop, since over 90% of thetotal comes from them.

Subsistence farmingpredominates

The PRSP is leading to highergovernment consumption

26 Rwanda


Comparative economic indicators, 2002Rwanda Uganda Tanzania South Africa Burundi

GDP (US$ bn) 1.7 5.9 9.1 104.6 0.7GDP per head (US$) 201 240 256 2,324 100

Consumer price inflation (av; %) 2.0 -0.3 4.6 9.9 8.0Current-account balance (US$ m) -141 -547 -606 255 -50

Merchandise exports fob (US$ m) 68 458 870 31,775 26Merchandise imports fob (US$ m) 253 1,140 1,671 26,563 132


Economic policy

Ten years after the country's devastating genocide, the government has focusedeconomic policy on establishing macroeconomic stability and creating theconditions for a rapid increase in the real GDP growth rate. Rwanda signed athree-year enhanced structural adjustment facility with the IMF in June 1998,which was later converted into a poverty reduction and growth facility (PRGF)worth about US$93m. This funding is mainly used for balance-of-paymentssupport. Rwanda's performance under the PRGF has, until recently, been judgedsatisfactory by the IMF, and in October 2001, after completing its annual reviewof the programme, the Fund released a further disbursement, bringing total dis-bursements under the PRGF to US$67m. The PRGF expired in April 2002, witha replacement finalised in June 2003 following talks that had begun in January2002. The talks were prolonged, as the IMF and the Rwandan governmentdiffered on the fiscal implications, with the government pushing for greaterspending and to be allowed to run a substantial fiscal deficit (in the order of10% of GDP), while the Fund has been keen to restore greater fiscal discipline.

The deterioration in relations with the IMF culminated with the suspension ofthe PRGF in late 2003, as the Rwandan authorities failed to meet key pro-gramme targets, most of which were related to overspending. This in turnreduced aid flows from most donors during early 2004. The reduction inexternal revenue, increased public spending and the country's own falteringgrowth rate in 2003-04 have pressured the government into adopting a morecautious fiscal stance and prevented additional resources from being shifted topoverty reduction, as envisaged. Agreement between the government and theIMF was finally reached in March 2004, with the IMF accepting the govern-ment's proposed 2004 fiscal deficit, provided that it was fully financed. As ofApril 2004, funding for US$50m of the proposed spending is not in place, andthe IMF has increased pressure on the government to detail which programswill be cut in consequence.

A key part of the PRGF is the greater emphasis than previously on povertyreduction, and the requirement that GDP growth and economic policy reducepoverty in as direct a manner as possible. Developing a poverty reductionstrategy (PRS) is one of the criteria for obtaining a PRGF, and the governmentproduced a final version of its PRS in November 2001. Priority areas identifiedin the paper were rural recapitalisation, human resource development, thepromotion of the private sector, state capacity building and the improvement of

Implementation of the PRGFleads to problems

The government launches itspoverty reduction strategy

Rwanda 27


governance. The PRS has identified a variety of core programmes within theseareas, which the government is in the process of implementing first. Amongthem are support for small-scale agriculture through the provision of credit andassistance with marketing; labour-intensive public works, including road main-tenance; the demobilisation of soldiers; adult literacy; and genocide trialsthrough the traditional court system (gacaca).

In addition to the restoration of macroeconomic stability, the government hasattempted to boost growth through a number of other key macroeconomicpolicies, typically recommended by the IMF and the World Bank. These includethe following:

• Trade liberalisation: The average import tariff was about 11% in 2002,compared with 17.5% in 1998. Like many developing countries, Rwanda derives ahigh proportion of its revenue from trade taxes, which has made the fiscal deficitworse, although it has boosted trade flows. It also joined the Common Marketof Eastern and Southern Africa (Comesa) free-trade area in January 2004, zero-rating all imports of Comesa origin.

• Privatisation: The government says that it is prepared to privatise all of its74 parastatals. So far, the Rwanda Privatisation Secretariat has privatised 30 ofthem, but the sales have been almost entirely of the smaller entities, and totalrevenue from the sales was only US$7m at the end of 2003. The deadline for thesale of the telecommunications parastatal, Rwandatel, has been extended severaltimes, and is currently set for April 2004. A start has been made, again after longdelays, with the sale of the country's tea estates, but the privatisation of themain commercial bank, the Banque commerciale du Rwanda (BCR) is dragging.

• Foreign investment: The main foreign investors in Rwanda since 1994have been South African, and have been assisted by strong diplomatic relationsbetween the two countries. Some companies, such as the mobile-phone giantMTN, have prospered, while others, such as the fuel company Engen, which leftthe country suddenly in 2001, after just a three-year presence, have found theoperating environment hostile.

Aside from fiscal constraints, a major problem in implementing the PRS is theweakness of budget performance data. This is being further complicated by theongoing policy of decentralisation, since at local level expenditure tracking iseven worse than at national level. Another issue is defence spending, with realspending much higher than official figures indicate, possibly by as much astwo-thirds. There have been increases in taxation, with the aims of ensuringthat a higher proportion of total revenue is domestically generated anddecreasing the country's reliance on donor support. Value-added tax (VAT) wasintroduced at the rate of 15% in 2001 and increased to 18% in 2002, a higher ratethan the regional average. This has boosted domestic revenue, but hasencouraged smuggling by traders seeking to evade VAT.

From 1998-2002 the government maintained a tight monetary stance, which hashelped inflation to fall to single-digit levels. However, the monetary stance hasbeen substantially loosened since late 2002, as delays in donor disbursements

Fiscal expansion leads to alooser monetary stance

Budget data remain weak

Growth strategy is based onIMF-World Bank standards

28 Rwanda


and growing expenditure commitments have led to a cash shortage for thegovernment. The monetary authorities have printed money in response, andthe increase in the money supply has helped to weaken the Rwandan franc,which depreciated by 19% against the US dollar during 2003. Domestic creditexpanded by nearly 38% during the first three quarters of 2003, owing mainlyto domestic borrowing by the government in order to finance the fiscal deficit,as well as increased private-sector demand, although it fell back slightly in thefinal quarter. Average lending rates increased during 2003, in a gesture by themonetary authorities towards reining-in domestic credit.

Financial operations of central government, 2003(Rwfr bn)

Revenue 228.5 Fiscal receipts 112.4 Non-fiscal receipts 7.0 Grants 109.1

Expenditure 220.5 Current expenditure 149.3 Capital expenditure 69.0

Net lending 2.3Balance 8.0Payment of arrears –22.5

Overall balance –14.5Financing (net) 13.9 Foreign 43.7 Domestic –29.8

Source: Ministry of Finance.

Corruption

Mr Kagame has, since the election, shrugged off criticism about the manner of hisvictory and has taken steps to fulfil campaign promises for less corrupt government.In March 2004 the office of the auditor-general presented its most critical report todate to the National Assembly, detailing alleged substantial embezzlement andfraudulent tendering in state departments during 2002. According to the auditor-general, government departments are evading rules requiring that all tendersexceeding Rwafr3m (US$6,300) are handled by the National Tender Board (NTB), byartificially dividing higher tenders into smaller components. The result was that,during 2002, tenders worth US$5.8m that should have been handled by the NTBwere not. The auditor-general further alleged that US$7m of government spendingwas not accounted for during the year. While troubling, the sums missing are notparticularly high by regional standards, and underline Rwanda's reputation as one ofthe less corrupt countries in the region. Nonetheless, the lack of predictability inexecuting routine matters, owing to slow-moving bureaucratic structures and the laxenforcement of contracts, are among the problems encountered by investors andother foreign actors in Rwanda.

The full extent of corruption is difficult to assess. Some international companiesoperating in Rwanda with long memories say that corruption is not as bad as it wasbefore 1994 and that currently it compares favourably with the rest of the region;however, some local manufacturers and import-exporters insist that it has worsened

Rwanda 29


and that unofficial payments to state officials are a major impediment to profitability.The application of customs tariffs is also problematic, particularly those in respect ofthe Democratic Republic of Congo (DRC), from where traders regularly import goodswithout declaration. However, the establishment of the Rwanda Revenue Authority(RRA) in 1998 has helped to reduce customs and tax corruption nationwide. Even thewell-connected are wary of the RRA, particularly as evidence of corrupt acts are fre-quently cited when it becomes expedient to force politicians from office or into exile.

Economic performance

The country recorded exceptionally high real GDP growth rates from 1995-2002as the economy recovered from the genocide and earlier civil war, andbenefited from sound economic management from the government andsustained assistance from international donors. Real GDP growth averaged 7.7%between 1998 and 2002, but was estimated at only 3.5% in 2003, the country'slowest annual growth rate since 1994, a clear indication that the post-genocideera of rapid catch-up growth is over. After an excellent year in 2002, agriculturalproduction, which accounts for roughly 40% of GDP, registered almost nogrowth in 2003, and officially recorded agricultural export earnings fell in valueby 30% because adverse weather conditions induced low production and weakinternational prices for tea and coffee, the two main exports. In the industrialsector, mining production fell in value by an estimated 28%, on the back ofcontinued weakness in coltan prices, which has weakened returns for artisanalminers, causing many to abandon their efforts altogether. Manufacturing hadanother difficult year, with production falling in value by over 5% in the face ofstiff competition from regional suppliers. Construction sector output, however,rose in value by an impressive 16% during 2003, to Rwafr65bn (US$114m),following the injection of government funds into two major hotel constructionprojects. Official statistics show the value of services to have risen by 6.6%during 2003, to Rwafr239bn, largely because of increases in recorded wholesaleand retail trade, and in finance and banking.

Real gross domestic producta

(% change)

2003 Annual average 1999-2003GDP 3.5 6.5

a Estimates.


The government has had a good track record in containing inflation since 1994,and the average annual inflation rate from 1998-2002 was just 2.2%. However,estimated average inflation in 2003 was 7.5%. As with many African countries,the consumer price index is heavily weighted toward basic foodstuffs, so the14% increase in food prices during 2003 owing to weak agricultural productionwas an important factor in the year's increase in inflation. Other contributingfactors included rising import prices, given regional transport constraints; asharp depreciation in the value of the Rwandan franc; and increasing moneysupply, primarily because of increased domestic borrowing by the governmentafter the suspension of the PRGF and delays in donor dispersals.

Inflation is low

The era of post-genocide catch-up growth is over

30 Rwanda


Regional trends

Rwanda is a small country with a uniform, tropical climate. The north-westernprovinces are at a higher altitude than those in the south and are thereforecooler at night, making them more suitable for tea and coffee cultivation. Thenorth-eastern province of Umutara is the least developed, and until 1994 wasmostly made up of the Akagera National Park. The park has been reduced toprovide settlements for Rwandan refugees returning from Uganda since 1994,many of whom have substantial herds of cattle.

The capital, Kigali, has grown enormously since 1994 and is now home to anestimated 600,000 people. The city's infrastructure is poorly maintained andmany districts suffer from power and water shortages. No other urban centresin Rwanda have populations exceeding 35,000.

Economic sectors

Agriculture

About 90% of Rwandans work in agriculture. Land is in short supply and theaverage size of smallholdings is just 0.7 ha. Land shortage and declining yieldswere concerns for Rwandan agriculture a century ago and remain so today, thepassage of time serving only to intensify the problem. Cooking banana, sweetbanana and sweet potato account for 80% of the harvest, and cassava, beans,sorghum and maize account for most of the remainder. Land abandonedduring the war and genocide of the early 1990s has since been brought backinto production, access to inputs has improved, and agricultural productionreached pre-war levels in 1998. Livestock numbers only recovered to pre-warlevels in 2000. The use of fertiliser, increasingly supplied by the private sector,is expanding, and is expected to drive up yields and output, at least in the shortto medium term. However, production per head is lower than in 1990 and doesnot meet Rwanda's food needs. A major challenge for the government isensuring that food production keeps up with population growth.

Traditionally, Arabica coffee has been Rwanda's main export crop, but it wassupplanted by tea in 2000. Quality used to be good, but has declined since 1993because of neglect and a lack of inputs. The coffee harvest starts in May andcontinues until December. Yields are about 700 kg/ha. Post-war productionpeaked in the 1999/2000 crop year (April-March) at 18,800 tonnes, less thanhalf of its pre-war level, but has declined since then, with production estimatedat just 14,000 tonnes in 2003. The continued decline in coffee production,largely as a result of the relentless fall in prices, has been worsened by ageingand diseased trees and adverse weather. The abolition of the coffee tax in 1999was intended to improve producer incentives and thus production, but so far itseffect has been more than offset by sharp falls in international coffee prices.The government has committed itself to privatising coffee processing plants.The involvement of the private sector is likely to boost production and toimprove quality.

Subsistence agriculture

Coffee

A small uniform country

Rwanda 31


As Rwandan tea is of good quality, fetching above average prices, it has becomeRwanda's main source of export earnings. Tea production during 2003 isestimated to have been 14,200 tonnes, about 3% lower than in 2002, againbecause of adverse weather and the ongoing problem of underinvestment.Officials claim that with better input supplies, yields and hence the harvestcould more than double. All nine of the country's tea estates were due to beprivatised in 2001, but the sales have been delayed. By early 2004 technicaloffers had been received for two of the tea estates, but the Rwanda PrivatisationSecretariat says that it is awaiting financial offers. The long delay in the processhas generated suspicion that the government has identified preferred biddersand may be attempting to discourage other bidders.

Floriculture exports are being promoted in an attempt to diversify agriculturalexports toward higher-value products. A local company, Highland Flowers,began exporting roses to Europe in 1999. The company claims that Rwanda'sclimatic conditions are ideal for floriculture; flowers reach maturity in Rwandaon average in 44 days, compared with 60 days in Kenya. Exports to Europehave been aided by a direct air service between Rwanda and Belgium, operatedby the SN Brussels Airline.

Agricultural policy

The government is seeking to address population and land pressures by increasingagricultural productivity and moving farmers beyond subsistence towards producingmarketable surpluses. It aims to recapitalise rural areas, improve road access andpromote security of land tenure, while seeking to develop the market in land. Landownership is a sensitive issue and any new legislation would be prepared withextreme caution. The government wants to keep the state's agricultural extensionservice, which offers soil management and farming advice, but to divest itself ofagricultural input provision. It also wishes to promote rural credit provision throughthe establishment of a regulatory environment that facilitates microcredit, while pro-moting farmers' associations in order to increase smallholders' bargaining powers.

After substantial restocking efforts since the genocide, livestock numbers arenow approaching pre-war levels. Official statistics record that the numbers ofcattle and poultry have reached 88% and 70% of pre-war levels respectively,although the number of goats remains at around 30% of the pre-war figure. Inorder to boost milk output, Rwanda has imported several hundred head ofcattle from South Africa. These are more productive than the domestic Ankolebreed, although they are proving to be more prone to disease and sunstroke.

The UN Food and Agriculture Organisation estimates that 9% of total land inRwanda is forested. Wood is the main fuel source, but there is very littlecommercial timber production. The fishing potential of Lake Kivu and LakeIhema, and that of fish farming, have not yet been fully exploited. The catchwas 5,000-6,000 tonnes before the war and is now about 4,500 tonnes.

Tea and floriculture

Livestock

Forestry and fishing

32 Rwanda


Mining and semi-processing

Rwanda has deposits of cassiterite, colombo-tantalite (coltan), wolfram, goldand sapphires, all of which are mined in small quantities. The largest mineraldeposit in volume terms is cassiterite, production of which peaked at1,000 tonnes in 1990 but fell to as little as only 155 tonnes in 1997, beforegradually increasing to 555 tonnes in 2001. Coltan production has increasedrapidly in recent years, averaging about 95 tonnes per year from 1993 to 1996and 324 tonnes per year from 1997 to 2001; indeed it was Rwanda's biggestexport earner. Production growth is partly attributable to the exploitation ofrecently discovered deposits, but is also a result of the re-export of Congolesecoltan, which has often been fraudulently recorded as being of Rwandan origin.International demand for coltan, and therefore international prices, rose sharplyin 2000-01, driven by tight supplies and the usefulness of the metal in high-technology industries, particularly for mobile phones. However, world coltansupplies improved in mid-2001, causing prices to collapse, and Rwanda'searnings from the mineral have been much lower in the last two years. Illegaldiamond exports from the Angolan rebel movement, União Nacional para aIndependência Total de Angola (UNITA), are alleged to have been sold throughRwanda, although the Angolan government has apparently accepted Rwanda'sprotestations of innocence.

Manufacturing

Manufacturing accounts for about one half of industrial output in value termsand under 10% of total GDP. The sector is poorly developed, and food,beverages and tobacco account for 80% of total manufacturing, a higherproportion than anywhere else in the region. Chemical industries account for4% of total manufacturing, and textiles and clothing another 2%, the lowestshare in the region. After growth in 2001 and 2002, manufacturing outputsuffered in 2003, decreasing in value by an estimated 5.2% in real terms. Thiswas a result of strong competition in the domestic market from imports,primarily sourced in the region, and high input costs. Manufacturers complainabout low purchasing power and the negative impact of tariff reductions onregional imports, but the government has shown little sympathy for them,arguing that further protection would constitute a tax on the poor, who benefitfrom cheaper prices.

Construction

Construction has boomed since 1994, particularly in Kigali. Demand for thereconstruction of infrastructure destroyed during the genocide has been fundedpredominantly by donors. Substantial demand for new construction continuesin the capital, where rapid population growth is far outstripping availableservices. In rural areas growth is mainly stimulated by the housing needs ofpreviously displaced people. The government estimated annual growth of over15% in the sector during 2003. This has increased demand for constructionmaterials, including cement, where output is estimated to be up by 13.5% from

Modest mineral resources

A poorly developed sector

A minor construction boom

Rwanda 33


2002. Cement exports, primarily to the Democratic Republic of Congo (DRC),have risen in value by 44%.

Financial services

Nine commercial banks operate in Rwanda, five of them established since 1994.The largest is the partially state-owned Banque commerciale du Rwanda (BCR).European banks divested much of their shareholding in the sector during1998-99; however, Belgium, the former colonial power, retains a presence.Banque Bruxelles Lambert is, along with the government, a major shareholderin BCR, and Banque Belgolaise has retained its 35% stake in Banque de Kigali.The director of Banque continentale africaine au Rwanda (Bacar), ValensKajeguhakwa, was forced into exile in the US in late 2001. The governmentclaims that Mr Kajeguhakwa had embezzled money, but observers were moreinclined to accept Mr Kajeguhakwa's story, that he was being persecuted forpolitical reasons.

Efforts are being made by the authorities to improve banking supervision. Allcommercial banks were audited between 1999 and 2002, and yearlyinspections began in 2004. Regulations introduced in 1999 increased theminimum capital base for commercial banks from Rwfr300m (US$558,000) toRwfr1.5bn (US$2.8m). In addition, capital requirements for development andmerchant banks have been increased to Rwfr500m. Although at the time therewere concerns that banks would not be able to meet these changes, owing toweak capitalisation and a large number of non-performing loans (estimated at30% of commercial loans), the threat of banking failure has not materialised.

The debt-ridden government savings and development bank, Banquerwandaise de développement, which was looted in 1994, is due to be privatisedin the long term. The sale of BCR is proceeding more slowly than promised,despite some recapitalisation, financed by the World Bank. There are also plansto attempt to sell Bacar, along with BCR, to make the package more attractive.Banque populaire co-operative, established with Swiss help in 1975, specialisesin lending money for housing construction and has 137 branches. The ruralsavings institution, Caisse d'épargne, is undergoing a painfully slow liquidationprocess, which has already lasted more than two years.

There are four insurance companies, all of which are locally owned. The state-owned Sonarwa is the largest and is due to be privatised. Another parastatal,Soras, has 25% of the insurance market and, like Sonarwa, concentrates onvehicle insurance. Cogear is closely connected to Cogebanque, and is estimatedto have a 15% market share.

Other services

A total of 60 businesses with annual turnovers of Rwfr100m or more areregistered in Rwanda, along with 5,000 small and medium-sized enterprises. Inrecent years, service growth has been below that achieved in the economy as awhole and appears to be the result of the termination of emergency relief

The banking sector isgrowing strongly

The commercial sectoris still small

Banking supervisionis being tightened

34 Rwanda


programmes by most donor organisations. However, in the last two years theservice sector has shown more robust growth, registering an estimated 6.6%growth in 2003 on the back of increases in recorded wholesale and retail trade,and finance and banking. Also, the rapid spread of mobile phones using pay-as-you-go vouchers has contributed to strong telecommunications growth.

Rwanda has considerable tourist potential, but attracts tiny numbers of visitorsas it is geographically isolated and because of its history of political instability.Just 3,771 people visited its national parks in 2000. The country's mainattractions are the north-western Virunga volcanoes and their gorillas, whichmostly survived the extreme turbulence in the region from 1994-98. VirungaPark, which officially reopened in June 1999 after three years of closure, canaccommodate 35 visitors at a time. The emphasis is on high-value luxury, ratherthan mass tourism, as visiting the gorillas costs US$250/day. The AkageraNational Park in the north-east is pleasant, although it compares poorly withwildlife parks elsewhere in East Africa. Nyungwe forest in the south-west offershiking trails, bird-watching and monkey-tracking. The forest also sheltersunknown numbers of anti-government militiamen, and is not always safe tovisit. Lake Kivu is the main domestic tourist destination, particularly thebeautiful lakeside town of Kibuye. Kigali has several good quality hotels,although prices range from the reasonable to the exorbitant.

The external sector

Trade in goodsForeign trade, 2002(US$ m; fob)

Goods exports 67.2Goods imports -233.3

Trade balance -166.1

Source: IMF, International Financial Statistics.

Rwanda exports goods worth just US$8 per person per year, compared with aSub-Saharan average of around US$100. Despite the fact that the policy stanceis liberal and open, the economy is not well-integrated globally, partly as thecountry is landlocked. Rwanda's external trade performance looks like beingworse than expected for 2003, down slightly on 2002's total, with recordedexports estimated at only US$61.8m, the lowest level for nearly a decade. In1986, by contrast, the country's recorded exports were worth US$187.9m, morethan three times the current amount in nominal terms.

Export performance has been weak since 1997 because of low international teaand coffee prices. Diversification has yet to produce significant results, apartfrom a temporary surge in colombo-tantalite (coltan) exports in 2001, to aboutUS$40m, although these dropped to only US$14m and US$6.3m in 2002 and2003 respectively, as international prices collapsed. Exports of coltan, at least inpart, probably include production in the Democratic Republic of Congo (DRC),rather than from domestic sources. Encouragingly, however, earnings from

Tourism still makes a marginalcontribution to the economy

Little international trade,despite an open economy

Rwanda 35


exports of foodstuffs, particularly maize, beans and potatoes, to other regionalstates are set to increase in the short to medium term.

Recorded imports were an estimated US$247m in 2003, slightly less thaninitially projected, producing a trade deficit of US$185.6m. The merchandisetrade deficit is substantial in almost every year, and export earnings cover, onaverage, less than 30% of imports, leading to dependence on foreign assistanceto finance the balance of payments. The government aims to close the deficitby accelerating export growth and diversifying production to limit reliance ontea and coffee.

Rwanda's unrecorded trade

Officially recorded exports and imports leave a substantial share of Rwanda's totaltrade unaccounted for and this "informal" sector is believed to be doing substantiallybetter than the formal sector. According to research supported by the World Bank,informal exports are vigorous, particularly across the western border into theDemocratic Republic of Congo (DRC) and south to Burundi, where Rwanda runs asubstantial trade surplus in both goods and services. At the Cyangugu-Bukavuborder crossing, for example, Rwanda exported goods and services to the DRCestimated to be worth US$10m—most of it food—during 2001, 87% of which wasunrecorded.

Principal exports, 2002(US$ m; fob)

Tea 21.8Coffee 14.4Coltan 13.7

Hides 2.6Cassiterite 1.4

Source: Banque nationale du Rwanda.

Rwandan official data for 2002 show that Kenya, followed by Germany, isRwanda's main source of imports. Neighbouring countries also export largevolumes of agricultural products to Rwanda, although these are not capturedby official statistics. South Africa has emerged as a major trade and economicpartner, underpinned by growing investment and other ties.

Main trading partners, 2002a

Exports to: % of total Imports from: % of totalGermany 37.2 Kenya 30China 20.8 Germany 11.6Belgium 6 Belgium 10.7

South Africa 6 US 4.7US 4.5 South Africa 4.7

a Based on partners' trade returns; subject to wide margins of error.


Changes in regionaltrading patterns

36 Rwanda


Rwanda is a member of three regional trade organisations: the CommonMarket for Eastern and Southern Africa (Comesa), the Communautééconomique des Etats de l'Afrique centrale (CEEAC) and the Communautééconomique des pays des Grands Lacs (CEPGL). CEPGL consists of Rwanda,Burundi and the DRC and has never functioned effectively, even thoughinformal trade between the three countries is resilient. Much the same can besaid for CEEAC. Rwanda failed to meet Comesa's October 2000 deadline for a100% tariff reduction on goods from the region, fearing that its industrial sectorwould be devastated, but implemented an 80% reduction in 2002 and movedto the full reduction in early 2004, despite claims that this would cost thegovernment Rwafr3bn (US$5.3m) in lost revenue per year.

Rwanda has applied to join the East African Community (EAC), but there isunwillingness to take on the challenge by the EAC's current members, Kenya,Tanzania and Uganda, until their own problems are resolved. Although theapplication has not been rejected, there is no indication yet that it will beaccepted. Rwanda has also been declared eligible for access to the USgovernment's preferential trade access agreement, the African Growth andOpportunity Act (AGOA). The US decision, announced on December 30th2003, made Rwanda the 37th African country to gain access to AGOA since theplan was first implemented. The AGOA plan provides preferential tariff accessto the US market for goods produced in Africa, and has been of particularbenefit to the local assembly of textiles. It is not yet clear which productsRwanda would benefit most from under the terms of AGOA, although thecountry is attempting to promote its fledgling cut flower industry, for whichEurope has so far been the main market, with Rwanda benefiting from the EU'sEverything But Arms (EBA) initiative of non-tariff access to markets.

Invisibles and the current account

Statistics from the IMF show that in 2002 Rwanda ran a deficit on its trade inservices of US$136.3m. Most trade is in non-factor services; with high rates ofeconomic growth, coupled with Rwanda's landlocked position, pushing up thetotal cost of freight and insurance in the balance of payments. Rwanda receivedUS$65.2m in non-factor service credit in 2002, slightly above the five-yearaverage for 1998-2002, with travel and foreign governments the two biggestitems.

In 2002 Rwanda earned a modest US$8.4m from investment income and spentUS$27.2m servicing public debt, yielding an income deficit of US$18.8m. Some96% of Rwanda's unrequited transfers are official rather than private. Despitethe concern of the Rwandan government that aid levels are falling, this figurehas remained fairly constant since 1995. In 2002 the current-account deficit,excluding grants, had a total value of US$126.2m, according to the IMF. Thisrepresents 15% of GDP, roughly consistent with recent years.

Rwanda and regionaltrade organisations

A sizeablecurrent-account deficit

Rwanda 37


Invisibles and the current account, 2002(US$ m)

Balance on services -136.3Balance on income -18.8

Balance on transfers 194.9Invisibles balance 39.8Trade balance -166.1

Current account balance -126.2


Capital flows and foreign debt

Rwanda has not attracted much foreign direct investment (FDI) since 1995.Rwanda's total foreign debt stock, including arrears, stood at about US$1.3bn atend of 2001, according to the World Bank's Global Development Finance,equivalent to 71% of GDP. Just over 90% of this amount is public and publiclyguaranteed long-term debt. The remainder is short-term debt. Access to privatefinance is minimal and almost all of the debt, 84% of which is owed tomultilateral donors, is on concessional terms.

Rwanda's debt has become less and less sustainable, and in 2000 the debtservice/exports ratio peaked at 44% of GDP. In December 2000 Rwandareached decision point under the IMF-World Bank's heavily indebted poorcountries (HIPC) initiative, entitling it to relief on debt service of US$810m incoming years, primarily from the World Bank. However, between 1999 and theHIPC decision point, Rwanda's debt-service obligations were largely met by adonor-financed multilateral debt trust fund (MDTF). The MDTF was dis-continued once Rwanda became entitled to HIPC relief. Deducting what wouldhave been paid by the MDTF, the Rwandan government calculates that the netsaving on debt servicing in 2001 was just US$4.5m When completion point isfinally reached, a formal debt write-off under HIPC will take place, reducingRwanda's nominal debt stock to US$585m. However, Rwanda is not expected toreach completion point for at least a year. It had been expected that this wouldhappen in the coming months, but completion of HIPC will now be affected bythe suspension of Rwanda's poverty reduction and growth facility (PRGF) bythe IMF.

Rwanda is a major recipient of international development assistance and, on aper head basis, is one of the largest recipients in Africa. Between 1995, when thefirst donor round-table conference for post-conflict rehabilitation was convened,and 2000, about US$3.9bn in aid was pledged and about US$2.7bn disbursed.Although the overall trend in assistance to the country has been a downwardone since the late 1990s, in 2002 total external assistance rose to US$356m, fromUS$299m in 2001, according to the OECD. Assistance is anticipated to be lowerthan this level for 2003, owing to the suspension of the PRGF towards the endof the year.

Further debt relief is sought

Extensive foreign assistance isprovided

38 Rwanda


The UK has been the largest bilateral donor since 2000, followed by the US.Historically, the World Bank has been the main multilateral donor, havingdisbursed US$298m, 68% of the amount pledged, between 1995 and 2000, ac-cording to official Rwandan figures. The EU has also played an important role,having disbursed US$287m in the same period, despite opposition from somemember states to the provision of substantial non-emergency aid. The country'shealth system has benefited from much of the assistance recently, with theWorld Bank and the African Development Bank both pledging around US$30m.The government's attempts at poverty reduction have also been a donor target,with the EU approving a proposal to provide extended budget support toRwanda for the next three years and the UK pledging financial support forRwanda's poverty reduction strategy over a period extending to 2006.

Foreign reserves and the exchange rate

Foreign reserves, 2003(US$ m; end-period)

Foreign exchange 184.9SDRs 29.8

Total reserves excl gold 214.7


Since 1995 Rwanda has been steadily building up its foreign reserves, owing tolarge foreign aid inflows. In 2002 foreign reserves reached US$244m, equivalentto just over a year's import cover, four times the amount that the IMF normallyrequires. However, although the Banque nationale du Rwanda (the centralbank) has significant foreign-exchange holdings, the foreign assets of thecommercial banks are not so strong.

The Rwandan franc was floated in March 1995, resulting in an immediate 85%fall, to Rwfr240:US$1, almost level with the parallel rate at the time. The francappreciated in real terms in 1996-97, ending 1997 at Rwfr305:US$1. From 1998 to2002 the franc gradually depreciated in real terms. The fall was quicker in 2003,as economic growth and donor inflows fell sharply. By early 2004 the francwas trading at Rwafr582.3:US$1, an annual depreciation of 19%. Despite this fall,and worryingly for the Rwandan authorities, the differential between theofficial and the parallel exchange rates increased from a mere 2% in June 2002to a more substantial 9% by June 2003. The franc's depreciation and theemergence of a significant differential between the official and parallelexchange rates are the result of a worsening shortage of foreign exchangerelative to demand because of lower-than-anticipated donor inflows, followingthe suspension of the PRGF, and weak export earnings. However, with thePRGF getting back on track and anticipated improvements in exportperformance, the gap between the official and parallel rates has sincenarrowed, and stood at 3% as of January 2004.

Strong reserves and astable currency

Rwanda 39


Appendices

Sources of information

Ministry of Finance, Background to the Budget. A useful overview of bothbudget and overall economic performance, usually made available just after thebudget is delivered.

Ministry of Finance, Poverty Reduction Strategy Paper. Comprehensive statementof Rwandan economic policy, complete with a synthesis of the wealth ofstudies into the Rwandan economy conducted during the poverty reductionstrategy paper process.

Banque nationale du Rwanda, Rapport Annuel/Mensuel, Kigali. Banquenationale du Rwanda (the central bank) publishes monthly and annualbulletins, providing a wide range of information on the country.

Ministry of Finance, Rwanda Development Indicators. A handy, clearly presentedand fairly comprehensive annual selection of official economic and socialstatistics, with commentary.

Except for agricultural produce statistics, where production and export figuresare given, official statistical sources give little idea of the size and extent of theparallel economy. Academic and informal studies suggest that it constitutesmore than 60% of total economic activity, particularly in regional merchandisetrade and retail trade.

The principal international sources for Rwanda are: the World Bank's GlobalDevelopment Finance, World Tables and World Development Report; the IMF'sInternational Financial Statistics and Direction of Trade Statistics; the UN Foodand Agriculture Organisation's yearly production statistics; Energy DataAssociates, Bishops Walk House, 19-23 High Street, Pinner, Middlesex HA5 5PJ;and the International Coffee Organisation. Most of their figures are based onnational returns, and are thus no more reliable than national statistics.

African Rights, Rwanda: death, despair and defiance, London, 1994

Colette Braeckman, Rwanda, Histoire d'un génocide, Fayard, Paris, 1994

Philip Gourevitch, We Wish To Inform You That Tomorrow We Will Be Killed WithOur Families: stories from Rwanda, Farrar Strauss and Giroux, London, 1998

Human Rights Watch, Leave None To Tell The Story, New York 1999

La Lettre du Collectif des Ligues et Associations de Défense des Droits de l'Hommeau Rwanda (monthly), Kigali

L Minear and P Guillot, Soldiers To The Rescue: humanitarian lessons fromRwanda, London, 1996

Gérard Prunier, The Rwanda Crisis: history of a genocide, Hurst and Co, London,1995 and 1997

National statistical sources

International statistical sources

Select bibliographyand websites

40 Rwanda


UN, The United Nations and Rwanda 1993-1996, New York, 1997

UN, Report of the Independent Inquiry into the Actions of the United Nationsduring the 1994 Genocide in Rwanda, New York 1999

Alertnet: http://www.alertnet.org (continuing series of articles on thehumanitarian response to crises in the Great Lakes region)

Banque commerciale du Rwanda: http://www.bcr-rwanda.com

Radio Rwanda: http://www.orinfor.gov.rw (to listen live to Radio Rwanda)

Rwanda government: http://www.rwanda1.com/government (official website)

Rwanda Information Exchange Index: http://www.rwanda.net (semi-officialwebsite featuring government press releases and information on the country)

UN International Criminal Tribunal for Rwanda: http://www.ictr.org (ICTRnews, including verdicts)

Ubutabera: http://intermedia-org/ubu.html (independent newsletter monitoringdevelopments at the international criminal tribunal for Rwanda)

UN Great Lakes information service: http://www.reliefweb.int/IRIN (regularnews agency-type reporting on the humanitarian and political situation)

Rwanda 41


Reference tablesPopulation(m)

1998 1999 2000 2001 2002Total 7.3 7.5 7.7 7.9 8.2 % change, year on year 2.8 2.9 2.9 2.9 2.9

Source: Nation Census 2002; World Bank.

Population breakdown by age(% of total)

1991 2000 0-14 years 48 46

15-34 years 32 3435-54 years 13 14

55+ years 7 6


Labour force, 1996(m)

Total Male FemaleEconomically active 4.41 1.96 2.44 Primary sector 4.02 1.70 2.30 Secondary sector 0.07 0.07 0.00 Tertiary sector 0.27 0.17 0.11


National energy statistics1996 1997 1998 1999 2000

Electricity (m kwh)Available supply 154.74 184.00 186.91 198.50 203.94 Domestic production 72.16 110.83 126.99 128.18 109.87 Imports 82.58 73.17 59.92 70.32 94.07Natural gas (cu metres)Production 310 357 855 1,353 1,373

Source: Rwandan authorities.

42 Rwanda


Government finances(Rwfr m)

1998 1999 2000 2001 2002Revenue 66,019 65,966 68,664 85,206 101,200

Grants 33,000 37,870 64,145 61,900 70,800Expenditure –117,632 –138,858 –136,298 –158,100 –191,700Statistical discrepancy -23,021 –4,506 –6,363 2,700 –1,900

Balance -41,473 -41,161 -10,326 -8,294 –21,600

Sources: IMF; Rwandan authorities

Money supply(Rwfr m unless otherwise indicated)

1999 2000 2001 2002 2003Demand deposits 36,936 37,575 38,522 45,346 52,220Money (M1) incl others 59,172 63,110 63,718 70,373 82,305 % change, year on year 7.0 6.7 1.0 10.4 17.0

Money (M2) 98,707 114,132 126,970 142,994 165,031 % change, year on year 7.9 15.6 11.2 12.6 15.4


Gross domestic product(Rwfr bn unless otherwise indicated)

1998 1999 2000 2001 2002At current prices 632.3 641.1 682.5 736.6 815.8At constant 1995 prices 482.7 513.9 546.1 582.8 639.3 % real change 9.2 6.5 6.3 6.7 9.7

Sources: IMF; Ministry of Finance.

Gross domestic product by expenditure(Rwfr bn; at current prices)

1998 1999 2000 2001 2002Private consumption 577.7 571.1 614.5 666.6 739.5

Government consumption 54.5 61.2 60.9 69.9 69.6Gross domestic investment 92.0 111.1 122.7 127.8 144.3Exports of goods & services 34.7 37.8 42.9 n/a n/a

Imports of goods & services –131.5 –147.9 -159.6 n/a n/aGDP at market prices 627.3 633.3 683.4 736.6 815.8


Rwanda 43


Gross domestic product by sector(Rwfr bn at current prices)

1997 1998 1999 2000 2001a

Agriculture 256.6 282.9 270.4 292.3 305.2 Food crops 215.1 244 228.5 248.7 258.5 Export crops 8.3 6.6 7.7 7.1 6.4 Livestock 25.9 24.1 24.4 24.9 28.3 Others 7.3 8.2 9.9 11.5 12.0

Industry 103.9 116.1 124.9 144.4 163.0 Mining 0.8 1.3 1.3 11.5 14.5 Electricity, gas & water 2.9 4.5 4.2 3.7 3.4 Manufacturing 66.6 68.8 67.8 68.6 73.9 Construction & public works 33.6 41.5 51.5 60.5 71.2

Services 197.8 222.3 249.6 269.0 286.2 Commerce & tourism 57.6 63.3 68.7 71.0 75.2 Transport & communications 23.2 28.5 41.8 49.7 55.1 Public administration 40.2 41.7 47.2 52.8 54.2 Other services 76.8 88.8 91.9 95.6 101.6GDP at factor cost 517.9 577.0 600.3 658.9 699.3 Indirect taxes 40.4 44.3 44.6 46.8 55.0

a Estimates.

Sources: IMF, Rwanda: statistical annex, 2002; Ministry of Finance.

Consumer prices1999 2000 2001 2002 2003

Index (1995=100) 124.7 130.1 133.9 136.6 146.8 % change, year on year –2.4 4.3 2.9 2.0 7.5


Food crop production('000 tonnes)

1997 1998 1999 2000 2001Bananas 2,248 2,626 2,897 2,151 2,103Beans 144 163 149 229 306Sorghum 122 121 108 155 175

Maize 83 59 55 63 92Sweet potatoes 742 751 863 1,026 1,137

Cassava 203 188 314 813 688

Sources: Ministry of Agriculture; UN Food and Agriculture Organisation.

44 Rwanda


Agricultural production for export('000 tonnes)

1997 1998 1999 2000 2001a

Coffee 14.5 15.0 18.3 16.1 17.8

Tea 13.1 15.1 12.7 13.7 15.2

a Estimates.

Sources: IMF, Rwanda: statistical annex, 2002; Ministry of Agriculture.

Mineral production(tonnes)

1997 1998 1999 2000 2001Cassiterite 155 440 359 365 555Wolfram 78 30 84 144 161

Colombo-tantalite 256 378 330 360 296Gold 10 17 10 n/a n/a

Source: IMF, Rwanda: statistical annex, 2002; Rwandan authorities.

Manufacturing production1997 1998 1999 2000 2001

Beer (m litres) 76.3 65.0 59.9 44.2 47.9

Soft drinks (m litres) 24.8 28.9 22.1 20.7 22.8Cigarettes (m) 253 303 217 327 278

Soap (solid & liquid; tonnes) 7,500 6,966 6,431 5,897 7,056Textiles (m metres) 8.6 10.3 9.8 9.9 10.4

Source: Rwandan authorities.

Exports(US$ m; fob)

1999 2000 2001 2002 2003a

Coffee 31.4 22.3 18.1 14.4 15.1Tea 12.58 23.6 22.6 21.8 22.4

Colombo-tantalite 4.6 11.9 39.2 13.7 6.3Cassiterite 0.1 0 1.1 1.4 4.6Hides 0.5 0.4 0.8 2.6 3.8

Pyrethrum 0.3 0.0 0.9 0 1.0Total incl others 61.5 68.4 93.3 67.2 62.0

a Estimates.


Rwanda 45


Imports(US$ m; cif)

1999 2000 2001 2002 2003a

Capital goods 44.4 38.6 30.6 38.1 40.7Intermediate goods 38.6 50.6 43.6 45.2 38.8

Energy goods 32.88 72.41 38.97 37.61 40.46Consumption goods 134.2 160.3 171.6 124.1 140.0

Total 250.2 321.9 286.1 245.0 259.5

a Estimates.


Main trading partnersa

(US$ m)

1998 1999 2000 2001 2002Exports to:Germany 16 9 17 33 25China 2 2 4 18 14Belgium 30 6 4 2 4South Africa 0 1 1 1 4US 4 3 5 7 3Imports from:Kenya 48 51 58 64 70Germany 11 7 10 9 27Belgium 17 20 18 23 25US 24 49 20 19 11South Africa 13 9 6 9 11

a Based on partners' trade returns; subject to wide margins of error.

Source: IMF, Direction of Trade Statistics Yearbook.

Balance of payments, IMF estimates(US$ m)

1998 1999 2000 2001 2002Goods: exports fob 64.2 61.5 68.4 93.3 67.2

Goods: imports fob –233.0 –246.9 -223.3 -245.2 -233.3Trade balance –168.7 –185.3 -154.7 -151.9 -166.1Services: credit 48.2 50.7 59.3 65.9 65.2

Services: debit -189.7 –193.3 –200.1 -189.2 -201.5Income: credit 8.7 7.8 13.7 14.1 8.4

Income: debit –15.9 –18.5 -28.4 -34.0 -27.2Current transfers: credit 251.4 209.9 232.9 210.5 215.3Current transfers: debit –16.8 –12.7 -17.0 -17.9 -20.4

Current-account balance –82.7 –141.4 -94.4 –102.5 -126.2Financial balance -16.7 –33.2 10.7 –44.1 75.5

Net errors & omissions 92.3 32.3 -109.6 26.0 -36.0Overall balance –7.1 –72.1 -131.1 –70.3 -20.8


46 Rwanda


External debt, World Bank estimates(US$ m unless otherwise indicated)

1997 1998 1999 2000 2001Long-term debt 994 1,120 1,162 1,147 1,163 Official creditors 992 1,118 1,160 1,145 1,162 Multilateral 850 959 1,008 995 1,014 Bilateral 142 159 152 150 147 Private creditors 1 1 1 1 1Use of IMF credit 40 56 76 86 84

Short-term debt 77 49 54 39 36 Interest arrears on long-term debt 29 15 16 17 17Total external debt 1,111 1,226 1,292 1,271 1,283Total debt service 22 21 31 35 18 Principal 13 11 20 24 12 Interest 10 9 11 11 7 Short-term debt 2 2 2 1 1Ratios (%)Total external debt/GNP 60.5 61.8 67.3 70.8 76.3Debt-service ratioa 14.1 17.0 25.9 27.5 11.3Short-term debt/total external debt 6.9 4.0 4.2 3.0 2.8Concessional long-term debt/long-

term debt 88.7 90.9 89.7 90.1 90.5

a Debt service as percentage of earnings from exports of goods and services.

Source: World Bank, Global Development Finance.

Net official development assistancea

(US$ m)

1998 1999 2000 2001 2002Bilateral 209.0 180.5 175.4 148.9 199.1 UK 20.6 26.5 52.7 36.8 52.6 US 23.0 39.8 22.9 31.1 46.4 Belgium 23.0 20.9 15.9 11.4 21.5 Netherlands 29.0 20.3 20.4 19.2 19.6 Germany 20.6 18.8 13.8 14.6 10.8

Multilateral 141.0 163.2 146.5 149.5 156.9 International Development Association 61.6 63.5 30.9 57.1 76.8 EU 26.7 39.1 49.3 44.8 42.3 World Food Programme 4.6 34.0 20.0 4.4 4.8 UN Development Programme 9.7 12.2 5.4 2.7 2.1 IMF 13.8 -2.4 22.8 14.0 0.7

Total 350.1 343.8 322.0 298.5 356.1 Grants 260.6 287.5 267.5 227.5 280.7a Disbursements minus repayments. Official development assistance is defined as those grants andloans with at least a 25% grant element provided by OECD and OPEC member countries andmultilateral agencies, and administered with the aim of supporting development and welfare in therecipient country.Source: OECD, Geographical Distribution of Financial Flows to Aid Recipients.

Rwanda 47


Foreign reserves(US$ m; end-period)

1999 2000 2001 2002 2003Foreign exchange 159.72 189.50 199.77 233.55 184.93SDRs 14.46 1.14 12.34 10.17 29.77

Reserve position in the IMF 0 0 0 0 0Total reserves excl gold 174.18 190.60 212.11 243.73 214.70


Exchange rates1999 2000 2001 2002 2003

Rwfr:US$ (av) 337.83 393.43 442.80 476.33 537.66Rwfr:US$ (end period) 349.17 430.82 455.82 511.85 571.39

Rwfr:SDR(end period) 479.24 560.67 572.84 695.88 849.07


Editors: Philip Walker (editor); David Cowan (consulting editor)Editorial closing date: April 14th 2004

All queries: Tel: (44.20) 7830 1007 E-mail: [email protected]

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