Rwanda WT/TPR/S/129 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The Rwandese Republic is a la ndlocked Central African country  with an area of 26,300  km2.  
It borders on Burundi to the south, the Democratic  Republic of the Congo to the west, Uganda to the 
north and Tanzania to the east.  Its population, of wh ich more than 90 per cent is rural, was estimated 
at 8.3 million in 2002.  With 315 inhabitants per squa re km., it is the most densely populated country 
in Africa.  Its demographic structure has evolve d but little since the first population census was taken 
in 1978.  In 2001, 45 per cent of the population was under 15 years of age, and 75 per cent under 30. 
2. With a per capita GDP of US$220, Rwanda is am ong the least developed countries.  Close to 
two thirds of its population live in absolute poverty.1  The country is still suffering from the economic 
consequences of the 1994 genocide2, in particular the lack of infrastructure in certain regions as a 
result of the destruction perpetrated during th e war and the public expenditure involved in 
compensating the genocide victims and meeting the costs generated by the 107,000 or so persons in 
prison awaiting trial for crimes relating to the geno cide.  The economic costs of Rwanda's prolonged 
involvement in the 1998-2002 war in the Democratic  Republic of the Congo (DRC), particularly the 
military expenditures, have further hindered its recons truction and development efforts.  Added to this 
is the HIV-AIDS pandemic, which has also contributed  to lowering life expectan cy to about 39 years. 
3. Agriculture employs more than 90 per cent of the population and accounts for some 44 per 
cent of real GDP, as against approximately 10 per cent for manufacturing activities and 46 per cent for services (Table I.1).  The mining sector's cont ribution is negligible, although Rwanda does have 
certain mineral resources, notably colombo-tanta lite (coltan) - the mining and export of which 
increased sharply in 2001 - and to a lesser exte nt, wolframite and cassiterite.  Methane reserves 
amounting to 70 billion cubic meters are thought to exis t near Lake Kivu, but they have not yet been 
exploited.
3  Rwanda's agricultural activities consist chiefl y of subsistence farming.  Its high population 
density has led to soil depletion and reduced output due to continuous exploitation and the limited use 
of inputs.  The weakness of its land tenure system h as also contributed to this situation.  Coffee and 
tea are the main cash crops.  Together with co ltan, they account for close to 95 per cent of goods 
exports.  The low level of foreign investment, par tly due to insecurity in the region, does not favour 
diversification of the country's production and export st ructure.  This lack of diversification has left 
Rwanda vulnerable to external shocks of a climat ic nature or resulting from international market 
fluctuations. 
4. The national currency, the Rwanda franc (RF), ha s a managed floating exchange rate with no 
pre-announced path.4  Rwanda accepted Article VIII of the IM F Articles of Agreement in 1998.  It has 
also liberalized certain capital account transactions.  Indeed, any resident may open a foreign currency 
account in an authorized bank in Rwanda, while non-resident foreign currency accounts have been 
completely liberalized.  Since 2000, residents have been able to withdraw freely up to US$50,000 per 
year, or the equivalent thereof in any other fore ign currency, from their foreign currency accounts.  
Foreign currency can be freely transferred from abroad.  There are no restrictions on foreign direct investment or on the repatriation of  the net return on such investment s and of income relating thereto, 
or of the proceeds from the transfer or disposal of  capital.  Residents may take out foreign currency 
                                                     
 
1 i.e. on less than US$1 per day. 
2 Close to one million people were killed, while some 3 million went into exile in the neighbouring 
countries. 
3 See the website www.mbendi.co.za. 
4 IMF (2002). WT/TPR/S/129 Trade Policy Review 
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loans from non-residents.  Non-residents are free to  buy treasury bills, subject to certain conditions 
(Chapter IV.2). 
Table I.1 
Main economic indicators, 1995-2002a 
1995 1996 1997 1998 1999 2000 2001 2002
Percentage 
Miscellaneous        
Real GDP growth 35.2 12.7 13.8 8.9 7.6 6.0 6.7 9.4
Inflation rate (measured on the basis of consumer prices)b .. 7.4 12 6.2 9.8 4.3 2.9 2.5
Interest rate (end of period)        
- Borrowing rate .. .. 8.24 7.76 8.75 10.11 10.18 9.02
- Lending rate .. .. 16.2 17.1 16.8 17.0 17.29 16.4
Exchange rate        
Rwanda francs per US$ (end of peri od) 299.8 304.2 304.8 320.1 349.2 430.3 455.8 511.9
Nominal effective exchange rate (e nd of period – rate of change)c -54.8 3.8 12.3 -11.9 5.7 -12.3 -3.4 -14.8
Real effective exchange rate (e nd of period – rate of change)c -39.7 8.6 26.5 -18.2 5.1 -9.7 -5.3 -12.0
Share of real GDP        
Agriculture 44.0 46.8 42.8 43.4 43.9 45.1 45.8 ..
Mining and quarrying industry 0.1 0.1 0.2 0.3 0.2 0.2 0.2 ..
Manufacturing industry 10.2 10.5 11.0 10.5 9.4 8.5 8.6 ..
Services 45.7 42.6 46.0 45.8 46.5 46.1 45.4 ..
Percentage of GDP 
National accounts         
Domestic final consumption 107.3 104.2 106.0 103.5 98.6 98.0 95.5 ..
  Government authorities 10.3 11.5 9.6 10.0 11.0 10.5 11.7 ..
  Households 96.9 92.7 96.4 93.5 87.6 87.5 83.9 ..
Domestic investment  13.4 13.0 15.6 18.5 19.0 15.2 14.7 ..
  Public 8.1 8.4 9.3 8.5 7.0 5.2 5.3 ..
  Private 5.3 4.6 6.2 10.0 12.0 10.1 9.4 ..
Exports of goods and non-factor services 5.2 6.5 7.4 7.0 7.7 7.9 10.4 ..
Imports of goods and non-factor services 25.8 23.7 28.9 29.0 25.3 21.2 20.6 ..
Percentage of GDP 
Public financed        
Deficit (-) or surplus (+) 1.6 -3.6 -2.2 -6.7 -6.4 -1.5 -5.3 -2.0
Deficit (-) or surplus (+), excluding grants -13.7 -13.2 -9.2 -8.3 -9.7 -8.9 -9.5 -11.0
Overall revenue plus external grants 18.1 16.7 17.2 15.9 16.1 18.8 19.8 20.8
Expenditure plus loans minus refunds 11.3 7.4 6.8 5.3 5.9 9.1 8.4 8.6
Statistical discrepancies 20.5 22.5 19.6 18.9 21.8 19.4 21.0 23.2
Annual growth rate 
Monetary situation (at 31 December)      
M1 (fiduciary money + scriptural mo ney) 41.1 11.7 22.7 -0.8 7.0 1.6 5.8 ..
M2 (M1 + demand deposits) 69.5 8.6 29.1 3.5 7.9 12.6 14.0 ..
Percentage of GDP 
External accounts        
Balance in the current transactions account -3.1 -6.7 -9.5 -9.6 -7.6 -5.0 -5.9 -7.3
  of which:  trade balance -11.1 -10.9 -10.0 -9.7 -9.8 -8.4 -8.5 -9.6
Capital account balance 7.2 6.5 6.3 4.8 3.7 4.1 3.9 3.8
Financial account balance -1.5 1.7 2.4 2.6 3.4 1.8 4.6 4.3
 
.. Not available  
a Figures in italics are estimates 
b Annual average 
c The sign (-) indicates depreciation 
d At 31 December  
 Source : IMF (2003), International Financial Statistics , October;  IMF (2003), Country Report – Rwanda , 29 May and Statistical 
Appendix , 5 July 2002;  and National Bank of Rwanda , available at:  httpt://www.bnr.rw/bnrnet/. 
 
5. Rwanda's budget remains heavily dependent on fo reign aid (US$45 per inhabitant, 18 per cent 
of the value of imports of goods and services, and 9. 2 per cent of GDP in 1999).  Rwanda is a heavily 
indebted poor country (HIPC), with an overall exte rnal debt of US$1.4 billion at the end of 2002.  Rwanda WT/TPR/S/129 
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Some 89 per cent of its debt is multilateral, its  main multilateral creditor being the International 
Development Association.  Close to 46 per cent of its bilateral debt comes from the Paris Club 
creditors, chiefly France.  The other bilateral credito rs include the People's Republic of China, Kuwait 
and Saudi Arabia.  Rwanda qualifie d for debt relief under the HIPC in itiative in December 2000, with 
a planned reduction at that date of 71 per cent of its current net value, i.e. US$810 million. 
(2) RECENT ECONOMIC PERFORMANCE  
6. Rwanda is pursuing its reconstr uction programme, largely funded by foreign aid.  Thanks to 
this programme, it has been able to bring its economy  back to the level of 1990, with a real GDP for 
2000 matching the 1990 figure.  Despite a decline in the terms of trade of some 40 per cent between 
2000 and 2002 (due to the fall in coffee and coltan prices), real GDP grew by 9.4 per cent in 2002 (as 
compared to 6 per cent in 2000 and 6.7 per cent in 2001), thanks in particular  to the construction 
industry and agriculture.  Estimated growth for 2003 is about 3.5 per cent. 
7. The exchange rate system was partially liber alized in 1995, and payment restrictions on 
current transactions were abolished in 1998.  U nder Article 45 of the Exch ange Regulations, export 
proceeds must be repatriated within three months fr om the date of physical departure of the goods.  
They must either be surrendered onto the excha nge market or preserved in foreign currency in 
accounts opened in authorized banks.  Should an y unforeseen circumstances delay payment, the 
National Bank of Rwanda (NBR) must be so notifie d.  The obligation to surrender foreign exchange 
was abolished in 1997, enabling exporters to use the totality of their export revenue for current 
transactions.  However, the foreign currency repatr iation obligation is still in force.  A number of 
tariff reductions have been introduced (Chapter III(2 )(iv)(b)).  The privatization programme launched 
in 1997 has led to the privatization of more than 20  per cent of State enterprises (Chapter III(4)(iii)).  
Thanks to the pursuance by the NBR of a monetary policy aimed at controlling the growth of monetary aggregates
5 and the improvement of tax planni ng, including measures to boost public 
revenue, the inflation rate was brought back to under four per cent in the year 2000. 
8. Public revenue has risen thanks, inter alia , to improved collection of customs revenue, the 
introduction of VAT in 2001 and the increase in its  standard rate from 15 to 18 per cent, the 
introduction of excise duties on vehicles, the setting up of a tax auditing system for large enterprises 
to reduce tax evasion, and the subjection of all salary -related benefits and allowa nces to income tax.  
These measures led to an increase in public revenue from 9.7 per cent of GDP in 2002 to 11 per cent 
in 2003.  A monthly expenditure control system and measures to reduce extra-budgetary expenditures 
have been introduced.  However, the efficiency of  these measures has been limited by the enormous 
cost of maintaining internal security and financ ing Rwanda's involvement in the DRC as well as 
expenses stemming from the national reconstruction and reconciliation process, malfunctions in the 
system of information (on loans) between the regional authorities and the central government, and 
substantial losses sustained during the transfer of  budgeted funds between th e central government and 
the regional authorities.6  The public deficit (excluding grants) was at 8 to 10 per cent of GDP 
between 1998 and 2001, but increased in 2002 (11 per cent) and 2003 (12.1 per cent), owing mainly 
to non-recurrent expenses (estimated at 4.7 per cent of GDP in 2003) relating to the demobilization of 
                                                      
5 The NBR fixes the levels of monetary aggregates and the inflation rate to be achieved, and uses, as its 
main monetary policy instruments, treasury bills, refinanc ing rates, and reserve requirement rates.  The NBR, 
which does not have an independent committee for the formulation of monetary policy, is limited in its 
independence;  the Chairman appoints  the members of the NBR's Management  Board.  According to the Law on 
the Statutes of the NBR, the debit balance of the public treasury's current account during a particular financial 
year cannot exceed 11 per cent of the St ate's ordinary revenue in the course of the preceding financial year.  Any 
expenditure beyond that limit is subject to parliamentary approval. 
6 Fofoack H., Obidgewu C., and Ngong R. (2003). WT/TPR/S/129 Trade Policy Review 
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soldiers returning from the DRC, the holding of el ections, the increase in strategic oil reserves, and 
the purchase of equipment for the health sector. 
9. Excess expenditure at the end of 2002 and during the first half of 2003 was largely financed 
by the banking system.  This led to a broad mone tary growth rate (annualized) of 15 per cent in 
April 2003, as compared to the 8 per cent predicted for the entire year.  These developments coincided 
with a sharp depreciation of the Rwanda franc (close to 45 per cent against the euro between April 2002 and April 2003), reflecting a sharp decline in export revenue as of the first quarter of 2002, 
and the appreciation of the euro.  This acceleration of monetary growth coupled with the depreciation 
aggravated inflationary pressures.  The annualized  rate of inflation for April 2003 was 8 per cent 
(5 per cent excluding the impact of the demand for agricultural products) as against 3 per cent 
officially planned for that year and 2.5 per cent  recorded in 2002, when a bumper harvest relieved 
inflationary pressures. 
10. Faced with this situation, the NBR raised its refinancing rate to 14.5 per cent in 2003, while 
the weighted average treasury bi lls rate reached 11.5 per cent.  In both cases these were the highest 
rates recorded since 1998.
7 
11. The pressure of fiscal policy on monetary policy is helping to maintain the interest rates 
applied by commercial banks at a high level (ove r 15 per cent) with an average spread between 
borrowing and lending rates fluctuating between 7 and 8 per cent.  These high rates, which are also a 
reflection of the structural problems of the relatively under-developed banking system 
(Chapter IV (2)), constitute a major c onstraint on the financing of production. 
(3) TRADE AND INVESTMENT  
(i) Trade in goods and services 
12. Goods exports accounted for 4 to 5 per cent of GDP between 1997 and 2002, while imports 
accounted for 12.5 to 14 per cent during the same peri od.  Rwanda's balance of payments suffers from 
a chronic deficit, owing chiefly to the low covera ge of goods imports by exports as well as to a high 
services account deficit (Table I.2).  In spite of the steady fall in imports, the current account deficit 
has widened since 2001, reaching 7.3 per cent of GDP in 2002 and 11 per cent in 2003.  This is due to 
a decline of close to 28 per cent in export revenue, caused by the fall in intern ational prices and in the 
volume of Rwanda's main exports.  However, official transfers and long-term loans have enabled 
Rwanda to maintain a slightly positive overall bala nce, and official gross reserves equivalent to 
approximately six months of imports in 2001 and 2002. 
                                                      
7 The reserve requirement remained at 8 per cent. Rwanda WT/TPR/S/129 
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Table I.2 
Balance of payments, 1995-2002 
(US$ million) 
 1995 1996 1997 1998 1999 2000 2001 2002a 
Current account balance -39.6 -93.1 - 176.3 -190.2 - 147.5 -90.2 - 100.3 -127.4
Trade balance -143.7 -151.3 -184.5 -191.5 -186.7 -150.1 -144.4 -166.4
  Exports, f.o.b.. 50.4 62.0 93.0 64.1 62.0 89.8 93.5 67.3
  Imports, f.o.b. 194.1 213.3 277.4 255.7 248.8 239.8 237.9 233.7
Services -123.7 -127.8 -145.6 -159.1 -143.0 -141.4 -125.3 -136.7
Income 4.7 -14.1 -17.9 -6.6 -11.4 -15.4 -22.5 -19.1
Current transfers (net) 223.0 200.1 171.7 167.0 193.7 216.6 191.9 194.8
Capital account balance 93.5 90.0 115.9 95.1 70.9 72.8 67.0 66.3
Transfers 93.5 90.0 115.9 95.1 70.9 72.8 63.4 66.3
Debt forgiveness 0.0 0.0 0.0 0.0 0.0 0.0 3.6 0.0
Financial account balance -19.0 23.3 44.6 51.5 64.4 32.7 78.3 75.0
Direct investment in Rwanda 2.0 2.2 2.6 7.1 1.7 8.1 3.8 2.6
Public sector capital 25.9 34.6 40.8 46.5 52.2 20.9 55.4 62.9
Other capital -47.0 -13.6 1.2 -2.1 10.4 3.7 19.1 9.5
Errors and omissions 16.4 -21.1 27.5 20.8 -5.0 -19.1 -20.5 5.3
Overall balance 51.2 -0.9 11.7 -22.8 -17.2 -3.8 24.4 19.3
Financing -51.2 0.9 -11.7 22.8 17.2 3.8 -24.4 -19.3
Change in net foreign assets of NBR - 46.7 -17.2 -29.2 3.8 10.1 -9.8 -25.1 -29.7
Change in arrears -4.5 18.1 17.5 -58.2 -2.7 7.1 -37.8 4.6
Exceptional financing 0.0 0.0 0.0 77.2 9.7 6.4 38.6 5.9
Memorandum items:        
Gross official reservesb 3.3 2.7 4.0 4.6 4.7 5.4 5.8 6.3
External debtc 6.3 6.6 6.9 6.4 1.5 1.7 1.8 2.0
Overall balance (in percent of GDP) 4.0 -0.1 0.6 -1.1 -0.9 -0.2 1.4 1.1
 
a Estimates. 
b In months of imports of goods and services. 
c In months of exports of goods and services.  
Source:  IMF (2003), Country Report – Rwanda , 29 May. 
13. Rwanda exports chiefly agricultural products, in  particular coffee and tea, to which it added 
coltan in 2001.  These three products accounted for 92 per cent of its exports in 2001 and 77 per cent 
in 2002 (Chart I.1 and Table AI.2).  Revenue from te a exports has remained more or less stable, while 
coltan export revenue fell by 65 per cent in 2002, inter alia  owing to the 16 per cent decline in volume 
and to the fall in the world market price.  The decline in revenue for 2003 was 48 per cent.  Revenue 
from coffee exports fell by 13 per cent in 2002 and 14 per cent in 2003 owing to the fall in world prices, and to reduced output attributable to management problems, climatic conditions and an 
increase in the price of inputs.  In spite of the Gove rnment's determination to diversify the structure of 
its exports, the share of manufactured goods has re mained extremely low.  A re-export trade, the 
extent of which varies from year to year, has also developed, with other African countries in 
particular.  In 2002, re-exports accounted for aroun d 16 per cent of Rwanda's  overall exports.  The 
main re-export products are fuel, worn clothing, "s uperwax" pagnes, and building materials, with the 
DRC and in particular the towns of Goma and B ukavu as the main destinations.  These re-exports (or 
more precisely, transit activities) are stimulated by the reconstruction of Goma and by the insecurity 
involved in shipping goods to the DRC. WT/TPR/S/129 Trade Policy Review 
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 0% 20% 40% 60% 80% 100% 
1996 1997 1998 1999 2001 2002
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 
1996 1997 1998 1999 2001 2002 Chart  I.1  
Structure of trade in  goods, 1996-2002
(a) Exports  
(b) Imports  
Source:  WTO Secretariat calculations, based on data taken from Comtrade, UNSD (SITC, Rev.3).Ores of molybdenum, niobium, etc. Other products of the mining industry  Coffee 
Other food products  Manufactures Other non-ferrous metal ores  
Agriculture  Other semi-manufactures
Chemicals  Fuel  
Other machinery and transport equipment  Automotive products
Iron and steel  Other products of the mining industry 
Other products Textiles and clothing Agricultural raw materials Other products TeaRwanda WT/TPR/S/129 
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14. The countries of Africa are the main destinati ons for Rwanda's exports, with Kenya alone 
accounting for some 55 per cent per annum on average during the period from 1996 to 2001 (Chart I.2).  Tea is the main export to Kenya, while re-exports dominate trade with Tanzania and 
Uganda.  After Africa, Europe is the second destin ation for Rwandan exports.  The main European 
markets are Germany, Belgium, and since 2001, Switzerland (Table AI.4). 
15. There was little evolution in the structure of  Rwanda's imports betw een 1996 and 2001.  They 
were dominated by manufactures, particularly ma chinery and transport equipment (Chart I.1 and 
Table AI.1).  The increase in imports of consum er goods, telecommunications equipment and office 
machines reflects the economic recovery and, in part icular, the expansion of service activities.  The 
other main categories of imports into Rwanda ar e food products, both for final consumption and for 
use as inputs in agri-food production, and products of  the mining and quarrying industry, in particular 
petroleum products. 
16. Since 1998, the African countries, in particular  Kenya, have constituted the main source of 
goods imported into Rwanda (Chart I.2).  The shar e of the European countries, among which Belgium 
has a predominant position, decreased by abou t 9 percentage points between 1996 and 2001 
(Table AI.3).  The increase in th e share of Asian countries (approx imately 6 per cent) during the same 
period partly reflects the increase in the price of  petroleum products, and to a lesser extent, the 
increase in the volume of manufactured goods im ported from the People's Republic of China and 
Viet Nam. 
17. Rwanda is a net services importer, with an av erage deficit (excluding factor income) of 
US$141 million per year between 1997 and 2001.  Tr ade-related services imports grew rapidly 
between 1996 and 2001, in particular in the freight  and transport category, where they increased by 
approximately 85 per cent, refl ecting the economic recovery. 
(ii) Investment 
18. Foreign direct investment (FDI) flows reached  RF 186.1 billion in 2001, 4.5 billion in 2002 
and 9.7 billion in 2003.
8  This represents a considerable progression with respect to the average of 
US$3.1 billion for the period 1995 to 19999, and is undoubtedly the result of the economic 
performances relating to the reforms, including libera lization and privatization.  Some 40 per cent of 
these investments in 2001, and 20 per cent in 2002,  took the form of joint ventures.  The services 
sector, in particular telecommunications and fina nce, accounts for the largest share of these 
investment flows (Chart I.3).  The share of the manufacturing sector has also grown thanks to 
investment in industry, in particular chemicals, sugar and tobacco.  The same  applies to construction 
activities. 
                                                      
8 These figures represent operational investment projects only.  If all of the projects registered with the 
Rwanda Investment Promotion Agency (RIPA) were included, the figures would be 208.1 billion, 22.9 billion 
and 17.1 billion respectively.  The statistics for 2001 are high because the RIPA only came into operation in 
2000.  These statistics are different from those contained in the balance of payments. 
9 UNCTAD (2002). WT/TPR/S/129 Trade Policy Review 
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 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%1996 1997 1998 1999 2001 2002 
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%1996 1997 1998 1999 2001 2002 Chart I.2  
Origin and destinatio n of goods, 1996-2002
(a) Exports  
(b) Imports  
Source:  WTO Secretariat calculations, ba sed on data taken from Comtrade, UNSD (SITC, Rev. 3).Tanzania United Arab Emirates Other countries of  Asia Belgium-Luxembourg  Other countries of Africa  United States South Africa  Japan
Kenya Other countries of the European Union Other countries Belgium-Luxembourg  
TanzaniaOther countries of the European Union South Africa    United States
Switzerland Other countries of Africa  Germany  
Kenya
Other countries Netherlands Hong Kong  Rwanda WT/TPR/S/129 
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19. Between August 2000 and December 2003, FDI r eached US$49 million, with investment per 
project ranging from US$50,000 to US$12 million.  Th e leading investors, in order of importance, 
were India, the United States, Kenya, Germany, Belgium, Canada, Great Britain, the Netherlands, 
Switzerland, South Africa, Lebanon and Oman.10  These investments were directed to the 
manufacturing sector (16 enterprises), services, including retail trade (four enterprises), mining (two 
enterprises) and construction (one enterprise), and ha ve resulted in the creation of 5,616 jobs.  Among 
the factors which, according to the authorities,  have had a positive influence on FDI are the 
macroeconomic and structural reforms (including the privatization programme), the introduction of 
the Investment Code and the setting up of a governme nt agency (the Rwanda Investment Promotion 
Agency – RIPA), good governance at the State en terprise level, membership of COMESA, and the 
availability of cheap, semi-skilled labour.  On the other hand, investment flows were considerably 
hampered by factors such as the high cost of energy, water and telecommunications, the lack of local raw materials and of skilled labour, and conflicts  and insecurity in the Great Lakes region. 
(4) O
UTLOOK  
20. An annual real GDP growth rate of 6 per cent is expected for the period 2004–2005, a 
projection which assumes the continuation of economic reforms that should limit the inflation rate to 
3 per cent.  A 10 per cent increase in export revenue is expected in 2004, an d 7 per cent in 2005.  
Private investment should grow progressively to r each 18 per cent of GDP in the medium term, as 
against the current 12 per cent.  Rwanda's debt s hould become sustainable (i.e. the country should 
                                                      
10 In order of the number of acquisitions. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2001 2002 Agriculture Mining Manufacturing ServicesChart I.3  
Sectoral distribution of foreign  direct investment, 2001 and 2002  
PercentageYear 
Source:  WTO Secretariat, on the basis of data  supplied by the Rwandan authorities.WT/TPR/S/129 Trade Policy Review 
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achieve a ratio of net present value of debt to e xports of less than 150 per cent) as of 2008.  This 
projection takes account of the Government's choice to finance priority expenditures relating to its 
poverty reduction programme through foreign loans, a nd assumes a sustained growth in the volume of 
Rwandan exports of some 11.2 per cent per year. 
21. The inflationist pressures in 2003 represent a major challenge, since their frequency could 
discourage private investors and hence hinder growth.  In order to maintain inflation at 3 per cent, 
measures will have to be taken to reduce the fis cal deficit.  The Government plans to strengthen 
measures aimed at eliminating extra-budgetary expe nditure and to extend the surveillance exercised 
by the auditor general to all ministries (on an annua l basis).  The withdrawal of Rwandan forces from 
the DRC should lead to a reduction in military expend iture.  Improved tax planning on the part of the 
regional authorities should help to reduce their leve l of indebtedness and the drain on resources.  
"Exceptional" expenditures (linked to the conseque nces of the 1994 genocide ) should fall to 2.2 per 
cent of GDP in 2004 and 1.5 per cent in 2005.  Gene rally speaking, the planned tax measures should 
make it possible to reduce the deficit (excluding fore ign grants) to 8.2 per cent of GDP in 2004, and 
8 per cent in 2005.  Not only should the strengthening of  fiscal policy help to control inflation, but it 
should also help to contain any negative im pact of tariff reforms on public revenue. 
22. If the fall in export revenue were to endure, it c ould restrict growth and push back the date at 
which Rwanda's debt becomes sustainable.11  The vulnerability of exports to external shocks and the 
heavy dependence of economic growth on agriculture  and construction since 2001 testify to the need 
to diversify the structure of production and exports and to enhance the efficiency of traditional 
sectors.  The Government intends to take steps to reduce supply-side constraints.  In particular, it 
intends to introduce reforms (including privatizatio n) in certain State enterprises operating in key 
sub-sectors such as tea and coffee, or infrastructur e services (telecommunications, energy, finance);  
to introduce a multi-sectoral regulatory authority;  to reinforce banking supervision;  to establish a 
new legal framework for the financial sector in order to facilitate the recovery of debts;  and to create 
commercial courts to help to enforce contracts. 
                                                      
11 According to certain government estimates, the date at which the foreign debt becomes sustainable 
could be delayed to 2016 unless creditors take further debt relief measures. 