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Last Updated: Thursday, 1 April, 2004, 08:24 GMT 09:24 UK
Rwanda's struggle to rebuild economy
By Orla Ryan
In Rwanda

Leon Haguma outlines the coffee growing areas
Leon Haguma outlines the coffee growing areas
The Rwandan government has struggled to rebuild the economy, which was left in tatters by the 1994 genocide. Recent strong growth figures mask the difficulty of the task which lies ahead.

Desire Kamanzi's father sold his three houses in Burundi to return to Rwanda in 1994.

He is not unusual.

Since the genocide ended in 1994, exiled Rwandans have been coming home from Burundi, Congo, Uganda and Tanzania.

"These people have been fighting all their lives, they have earned good money, they brought it home," Mr Kamanzi, now head of investment promotion at Rwanda Investment Promotion Agency, said.

This cash has fuelled much of the construction around Kigali.

Starting low

Since 1994, the Rwandan economy has registered an average of 8% economic growth a year, a figure which reflects the low point of departure as much as the achievement made.

Farmer in Rwanda
Rwandan small coffee growers are hoping for better times
In the year of the genocide, growth slumped by 50% and inflation reached 64%.

"Starting from scratch, you will see these big jumps. To sustain this, there are more policies you need to put in place," Mr Kamanzi admitted.

And it is these next steps that the Rwandan administration is now grappling with.

The streets of Kigali carry posters, reminding people that paying taxes will build the nation and new institutions, such as Rwanda Revenue Authority, should help the government increase revenues.

Claver Gatete, secretary-general in the Ministry of Finance, said that the government wants to increase non-traditional exports, thus reducing their heavy reliance on foreign funds.

Almost two thirds of the 8.1 million population live below the poverty line, and the World Bank estimates that GDP per capita was $250 in 2000. In many cases, it is even lower.

Outside of Kigali, bean planters Hadimana Wellars, 22, and Mbarushimana Theogene, 34, earn just $16 or 12,000 Rwandan francs a month.

Abandoned coffee

Rwanda earns much of its foreign exchange from tea and coffee.

Hotel Intercontinental brings investment, jobs, and expertise
Chief executive Gary Lane trains kitchen staff
Rwanda needs to add value to its exports to increase these earnings, Leon Haguma, acting director of coffee marketing board OCIR- Cafe, said.

"All was abandoned, they were dead or had fled the country, there was nobody to work the plantations," Mr Haguma said of the situation in 1994.

The country exported just 14,000 tonnes of coffee last year, hit partly by drought and disease. nowhere near the peak of 42,000 tonnes in 1986.

Now, American coffee chain Starbucks is interested in buying Rwandan coffee and Mr Haguma argues that making specialty coffee will boost incomes.

Most of the 400,000 families who grow coffee, grow 'ordinary' coffee. This sold last year for $1 a kilo in Mombasa port.

Specialty or 'fully washed' coffee can sell for between $1.8 and $3 a kilo. As yet, this specialty coffee accounts for only a fraction of the country's exports.

Money trickles down

There is some evidence of new investment in Rwanda and the benefits could be trickling down to local businesses and employees.

Coffee milling
Coffee is Rwanda's biggest export, but production has fallen sharply
One of Kigali's premier locations is the five star Hotel Intercontinental, owned partly by the government. It opened for business earlier this year.

"It brings investment, it brings jobs, it also brings in expertise to train, " George Cohen, the hotel's general manager, said.

The hotel works with local suppliers, training them to provide the cuts of meat or preserves previously not available locally.

Late last year, Terracom Broadband started offering broadband internet services to businesses.

Wolfgang Hey, one of the founding staff members, says Rwanda's location within East Africa is an advantage.

"We are certainly going to become national within Rwanda, we are going to move out of Kigali, once we have expanded to our borders, it makes sense to expand beyond," Mr Hey said.

Survivors' grief

Rwanda's tiny land mass makes investing in people and in ICT a logical step to attract investment, he said.

Their biggest customer is the government, though banks and NGOs follow close behind.

Mr Hey said: "Bureaucracy is a problem...even if someone desperately wants to help you, their hands are bound, because of the way policies are laid out, he can't."

Getting through the commemoration month of April is hard in many ways, he said. Business may be open but very little will be happening. "Society as a whole makes allowances for individuals' grief," he said.

No one could have predicted the strides Rwanda has made in the past ten years, RIPA's Mr Kamanzi said.

"The love the Rwandan people have for their country, their commitment... All this will be achieved," he added.


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