Rwanda is the most densely populated country in Africa and one of the poorest. Ninety percent of the population engage in subsistence farming of coffee, tea bananas, beans, potatoes, maize, sorghum and livestock. The primary challenge is economic and social recovery from the 1990s ethnic civil war between Hutu and Tutsi. There has been remarkable progress. The government’s strategy is to use regional trade in agricultural products to lift the country out of subsistence farming and develop a middle income economy.
There are many problems, but it helps to look at what the government is doing to improve infrastructure and what is occurring among individuals to distribute opportunity. Let’s start with the government and infrastructure. Transportation in Rwanda is poorly underdeveloped. Both railways and roads are in poor condition or not available. Rwanda is a landlocked country in East Africa located west of Lake Victoria. To ship coffee and tea to East African coastal ports is expensive and cuts profitability. Even trade with adjacent countries is expensive due to underdeveloped transportation.
In drought years Rwanda doesn’t grow enough food crops to feed itself and in those years high transportation costs make food aide more expensive and more difficult than for most other East African countries. The government’s strategy is to grow the country’s economy past the threshold where food security is ever a threat. In 1995, the year after the civil war and genocide ended, the poverty rate in Rwanda was almost 78 percent of the population. By 2012 that poverty rate was cut to 50 percent of the population. That is impressive growth even with several drought years included. Poverty reduction and food security are at the core of government plans.
Rwanda is a member of the East African Customs Union (EAC), where most of it’s trade is transacted. Kenya, the Congo and Swaziland are Rwanda’s largest export partners and Kenya, Uganda and Tanzania are her largest import partners. The largest imports are foodstuffs, so there is an active internal food trade among East African countries even in non-drought years. Rwanda is a member of a second regional trade group called the Common Market for Eastern and Southern Africa (COMESA). This second trade group promotes trade among member countries prohibiting tariffs, but also negotiates trade agreements with foreign countries outside of Africa. Rwandan also has a several bi-lateral trade agreements with non-African countries, like the United States and China where her tin ore and tungsten are exported.
In 2010 Rwanda along with Kenya, Burundi, Tanzania and Uganda formed the East African Community Common Market. The purpose is to increase market access for businesses in all four countries and find other opportunities that promote business growth. Along with EAC and COMESA participation, Rwanda turns to the International Monetary Fund and the World Bank for economic support. To gain access to loans and grants from both of these organizations, Rwanda is forced to comply with economic goals and strategies agreed upon at the time of loan or grant origination. So far these programs have been successful in changing the business culture among Rwanda’s commercial farmers.
Commercial farming for export products like coffee, tea and bananas and mineral mining and production are the two largest industries in Rwanda followed by tourism. But industry still only represents 10 percent of Rwanda’s economy. Small plot farming is the larger part of the economy and that is also targeted by the government for growth. Infrastructure and soil problems are the largest challenges. Rwanda’s rolling and mountainous geography cause soil erosion during the twice yearly rainy seasons. Lack of irrigation and fertilizers are another widespread challenge among small plot farmers, and insufficient power generation and roads for transport are also big impediments. The government and outside organizations, like the World Bank, have targeted these issues for improvement.
Cell Phones – Some Internet
Other pieces of the development puzzle for Rwanda are power generation and communication infrastructure. In the last four years cell phone use has grown significantly. There are three cell phone vendors in Rwanda and they have sold almost seven million phones and phone cards. That represents 63 percent of the population and cell phone penetration is still growing. Success as a small plot farmer is increasingly tied to access to information about farming methods and market information. The most successful Rwanda farmers use cell phones to receive regular phone messages, or text messages from agricultural market experts. They also gather information about water, soil erosion and fertilizer availability as well as new planting and harvesting methods. Cell phones are an important part of small plot farming improvement.
Unfortunately, in Rwanda internet access is still very limited. Fewer than half a million people have internet access in a population of over twelve million people. The internet offers videos and websites with lots of agricultural information from all over the world. Access to that information is aiding farmers in many developing countries, but in Rwanda it is not yet widely available. One way internet access is particularly helpful to small farmers is that it provides contact between micro-finance groups and small farmers. For example, Kiva.org organizes micro-loans all over the globe, but to interact with them you have to go online. In nearby Kenya there are over two hundred people seeking micro-loans through kiva.org and over 60 percent of those loans are for farming purchases like fertilizer and hybrid seeds. In Rwanda, which, as I mentioned early, is the most densely populated country in Africa there are only 38 people seeking micro-loans through Kiva.org. All of those 38 are seeking funds for agricultural purchases. I know Kiva.org is a small part of the financial landscape, but it offers a way of gauging one area of Rwanda’s progress towards its goals.
The territorial cycle for any region is based on the relationship between population growth and available resources. It’s obvious that Rwanda is in a strained phase of that relationship. There are more people than the social structure is able to support. That’s partly due to civil war, partly due to a large population and partly due to lack of access to resources that can change the balance. As a result, Rwanda has a small net immigration lose that keeps the population from growing faster. People just leave. Ultimately, the government’s goals are strategic and can lift this country out of it’s poverty ridden pattern. Better power generation of electricity, more cell phones and far more internet access are areas that would expedite government goals. There are opportunities for a bigger involvement from outside by non-profits and micro-finance organizations.