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Agriculture : The Engine of Rwanda’s growth

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Agriculture : The Engine of Rwanda’s growth

Investing in agriculture in Rwanda offers several advantages. This sector is defined as one of the pillars of the country’s economic performance.

Agricultural Transformation in Rwanda

Rwanda’s economy is heavily dependent on agriculture, which employs the majority of the population (70 %). In addition, agriculture contributes 31 % to GDP and is an important source of foreign exchange through the export of products such as coffee, tea, leather, and horticulture. However, it is important to note that the agricultural workforce is predominantly traditional, with 75 % of production coming from smallholder farmers.

Types of Agriculture in Rwanda

The dairy sector in Rwanda and farmers mainly grow coffee, pyrethrum, tea, flowers, beans, cassava, bananas, Irish potatoes, rice, wheat, and sugarcane. Rwanda’s arable land, which accounts for about 61 % of the country’s total area, is ideal for agriculture. The government actively supports the sector through incentive policies such as investment in infrastructure, inclusive markets, promotion of innovation, and private and public investment.

For investors, there are several elements to consider in Rwandan agriculture, including

  • Dairy industry
  • Coffee production
  • Meat processing
  • Agribusiness
  • Soil irrigation equipment and techniques, among others.

Rwanda’s agricultural sector has immense potential that must be effectively harnessed to ensure sustainable and inclusive economic development. The country can significantly increase its agricultural production

Government policies to support agriculture

In Rwanda, the state has implemented various strategies to promote the agricultural sector, including the Strategic Plan for the Transformation of Agriculture (PSTA IV), published in 2018, which is one of the pillars of this initiative. This program aims to accelerate the transformation of Rwandan agriculture and boost the rural economy.

In addition, the Rwandan government has established a support fund for agriculture, recognizing the importance of this sector to the country’s economic development. A key policy is to allocate 10 % of Rwanda’s budget to agriculture in order to achieve 6 % growth.

Rwanda also seeks to promote an integrated and sustainable approach to agriculture. To this end, the government is working with organizations such as the FAO to implement pilot projects such as the one in Rulindo District. Technology initiatives, such as the development of applications to support precision farming, are also part of the government’s efforts to modernize the sector.

Agricultural investment in Rwanda

In partnership with a World Bank program, the Rwandan government launched a project in 2008 to stimulate investment in agriculture, with remarkable results. The World Bank has continued to support Rwanda’s development projects, particularly in agriculture.

With the support of traditional donors such as the World Bank, the program focused on increasing agricultural productivity in selected watersheds covering a total area of 10,250 hectares. The positive results of the project include

  • The creation of more than 7,000 direct jobs.
  • 19,828 farmers, including 9,587 women, benefited from the project.
  • 41 % of targeted farmers adopted improved practices and techniques.
  • Total productivity reached 2,240 USD per non-irrigated hectare.
  • 2,346 hectares were protected from erosion.
  • Cooperatives increased their financial budgets at the end of the year.

Private initiatives in support of agriculture

In addition to government initiatives, the private sector is playing an important role in modernizing agriculture in Rwanda. Private companies such as the startup Crown Agro Initiative are contributing to this transformation by providing support services and introducing new technologies, including the installation of urban vegetable gardens for homes and farms.

In addition, private sector-funded agroforestry projects, such as Livelihoods, are taking a holistic approach to help farmers address the challenges of soil erosion, fertility loss, and low land productivity. Significant private investment is also being made in the agricultural sector to support economic development, as evidenced by Ireme Invest’s private stakeholder equity contribution of 130 million EUR.

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