IV.

Economy

Rwanda has essentially a subsistence economy. The gross domestic product (GDP) in 2005 was only $2.2 billion, or $238.30 per person. The country suffers from soil erosion and occasional droughts and subsequent famines, making Rwanda heavily dependent on foreign assistance, mainly from Belgium.

A.

Agriculture

Most of the people of Rwanda depend on subsistence agriculture, generally using a hoe as the main tool. The main cash crops are tea and coffee. Food crops include bananas, sweet potatoes, cassava, sorghum, beans, and rice. Cattle and goats are the main livestock raised. Overgrazing and soil erosion are serious difficulties that affect the entire country. Furthermore, Rwanda’s instability has caused disruptions in trade and a decline in exports, leading even more people to revert to subsistence agriculture.

B.

Mining

Minerals are Rwanda’s second most important source of foreign exchange after agricultural products. However, due to drops in world commodity prices, the mining of cassiterite was halted in 1986. The following year the country’s wolframite mines were also closed for the same reason. By 1991 some cassiterite and other mineral ores were being exported again, but mining in general was disrupted by the instability of the mid-1990s. In the early 21st century, the main exploited minerals were columbite, cassiterite, gold, and beryl.

C.

Manufacturing

Industries in Rwanda mainly revolve around the processing of agricultural products, such as coffee, tea, and sugar. Other important products include beer, soft drinks, cigarettes, and cement. The 1994 civil war brought Rwanda’s manufacturing sector to a standstill, but industry began to pick up again in 1995.

D.

Currency and Trade

The currency is the Rwanda franc, consisting of 100 centimes (558 Rwanda francs equal U.S.$1; 2005 average). The National Bank of Rwanda (1964) is the issuing bank. The chief exports, coffee and tea, are shipped primarily to Germany and other European countries. Motor vehicles, fuels, textiles, and machinery are imported, mainly from Kenya, Belgium, the United States, Israel, and South Africa. Exports earned $50 million in 2003, while imports cost $261 million. In 2007 Rwanda became a member of the East African Community (EAC). Membership in the EAC customs union was expected to help Rwanda increase trade and revenues with the other member nations of the EAC, such as Kenya, Tanzania, and Uganda.

E.

Transportation and Communications

Rwanda has a road network of 12,000 km (7,456 mi), only about 8 percent of which is paved. The country has no railroads but is linked by road to the Uganda-Kenya railroad system; most of Rwanda’s international trade passes through the Kenyan port of Mombasa. The main international airport is near Kigali. Two radio stations and one television station operate from the capital.