Thirty years ago, the Tutsi genocide destroyed Rwanda. Beyond the human devastation, with 800,000 people killed in 100 days, the country’s infrastructure and housing were destroyed. Food shortages ensued. Rwanda would be starting over from scratch.

“We had lost everything. We had no choice but to rebuild ourselves,” said the country’s president Paul Kagame on 28 February as he welcomed 30 young entrepreneurs and executives, most of them Africans, from the French-African Foundation’s Young Leaders Class of 2023 to his office in Kigali.

Over the past 10 years, Rwanda has recorded the strongest growth in the East African Community (EAC) and the most significant improvement in living standards. This can be explained chiefly by massive public investment and a booming agricultural sector, on which the Rwandan economy depends.

Tea and coffee exports

Rwanda, nicknamed the ‘Land of a Thousand Hills’ due to its mountains and valleys, specialises in harvesting tea and coffee grown mainly in the southwest, around Cyangugu town. According to data from the National Institute of Statistics and the World Trade Organisation, by 2022 the sector accounted for almost half of the country’s jobs. It also accounted for 25% of its GDP, being its leading export in terms of volume, at more than 40% of the total, ahead of the extractive industries – around 20% – with export revenues of $790m. This figure was up 45% in 2021 for all agricultural and agri-food products.

The country’s leading export by value is gold, which in 2022 alone brought in $556m in revenue. But many question where the precious metal comes from given Kigali is regularly accused of illegally exploiting the resources of its neighbour, the Democratic Republic of Congo (DRC). The country also exports petroleum oils and bituminous minerals – worth $198m in 2022, the second largest export item – as well as precious stones and other minerals and concentrates. Kigali is also planning to position itself as a sub-regional hub for mineral processing, a sector in which it faces competition from Uganda.

Perhaps surprisingly, the geopolitical situation and tense diplomatic relations in the sub-region do not seem to be destabilising trade between Rwanda and the DRC, which, according to WTO data, is its biggest customer (38% of exports) and its biggest trading partner (29.2%), ahead of the United Arab Emirates.

The all-powerful Rwanda Development Board

With its small domestic market and tightly knit economic fabric, Rwanda leaves little room for major private entrepreneurs. While one of the country’s biggest names, Gérard Sina, the boss of agri-processing company Urwibutso (“memory” in Rwanda’s national language Kinyarwanda), has succeeded in establishing himself as a leader in the sector, Rwanda, unlike South Africa or Nigeria, does not prosper through its business people.

The country’s economic system is centralised around the Rwanda Development Board (RDB), the powerful government agency responsible for attracting and facilitating investment in the national economy, headed by Francis Gatare, a former mining adviser to the president.

Today, Rwanda’s economic strategy is part of a programme Kagame has entitled ‘Vision 2050’. This programme is underpinned by substantial foreign investment, allowing Kigali to be recognised as a hub for logistics, finance and technology. By facilitating the entry of foreign capital through advantageous policy and tax provisions, which attract investors, and the establishment of special economic zones, at the heart of the country’s industrialisation strategy, Rwanda has built infrastructures, industrial units and hotel complexes.

Top-of-the-line tourism

Proof of the country’s attractiveness: since 2022, the number of French companies operating in Rwanda has almost doubled, from 25 to 45. This development follows the renewal of diplomatic relations between Kigali and Paris.

Among the main French groups active in the country are TotalEnergies and Duval, which is responsible for building and operating the Inzovu Mall, a vast shopping centre opposite the Kigali Convention Centre. The $68m project includes $35m from the French Development Agency (AFD) and the International Finance Corporation, a subsidiary of the World Bank Group. Duval, which is well established in the country through its local subsidiary Duval Great Lakes, also participated in constructing the Kigali golf course, which it manages.

Qatar, one of Rwanda’s other main economic partners, is currently negotiating the acquisition of a 49% stake in the national airline, RwandAir, and now owns 60% of Bugesera Airport, due to open in 2026.

Luxury tourism is another flourishing sector, directly managed by Visit Rwanda. The country has invested heavily in this sector and is generating substantial revenues. With luxury hotel complexes and safari tours, tourism now accounts for 10% of Rwanda’s GDP, generating revenue of $620m . The country was welcoming more than 1.48 million visitors by 2023.

However, there are limits to this economic model, given it relies heavily on the state and is largely dependent on donor funding and development aid. On 6 April, Rwanda signed a letter of intent with France for $400m in funding from AFD between 2024 and 2028. Given the inflation rate of 14.5% in 2023 and the public debt, which stands at 71.6%, it remains to be seen whether Rwanda’s economic model will be viable in the medium term.