Rwanda Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax System

Basic data

According to, Rwanda’s public finances are and will remain in deficit for the next two years. The growth of the Rwandan economy should be driven mainly by the services sector, as a result of the revival of trade and transport activities, telecommunications and financial services. However, tourism will recover only slowly. Trade and transport activities could benefit from favorable prospects for Rwandan exports, particularly in agriculture and mining. Agriculture (Rwanda’s second largest economic sector) is expected to grow slightly, driven by the expansion of export-oriented sub-sectors, particularly coffee and tea. In 2020, the production and export of cannabis was legalized and it is expected that it will be among the new export items in the coming periods. After the COVID19 pandemic, large investment projects were restarted, such as the construction of the Bugesera International Airport or the Amahoro and Nyagatare stadiums.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) 9.4 -1.9 9.6 7.7 8.5
GDP/population (USD/PPP) 2,330.00 2,213.00 2,440.00 2,680.00 2,910.0
Inflation (%) 3.4 9.9 -0.4 2.9 4.4
Unemployment (%) 1.1 1.5 ON ON ON
Export of goods (billion USD) 0.8 0.5 1.2 1.3 1.5
Import of goods (billion USD) 3.1 2.8 4 4.3 4.5
Trade Balance (Billion USD) -1.5 -1.7 -1.9 -2 -2
Industrial production (% change) ON ON ON ON ON
Population (millions) 12.6 13 13.3 13.6 13.9
Competitiveness ON ON ON ON ON
OECD export risk 06.VII 06.VII 06.VII ON ON

Source: EIU, OECD, IMD

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) -8.5
Public debt (% of GDP) 61.7
Current account balance (billion USD) -1.4
Taxes 2022

Income and corporate tax revenues were muted in 2020 and the government continued to provide tax relief in 2021. The result was a significant drop in tax revenues. Current expenditure accounted for the largest share of total expenditure, with a larger share going to health care and the fight against the pandemic (subsidy program for vulnerable people, subsidies for the agricultural sector and a support package for business owners). As a result, the expenditure/GDP ratio remained high in 2020/21 at 28.2%. The main goal of monetary policy remains the maintenance of inflation and the prevention of excessive exchange rate instability.

Banking system

Rwanda’s financial sector consists of nine commercial banks and four microfinance banks. Most commercial banks in the country target the rich and middle class. Almost all financial institutions operating in Rwanda are licensed to accept deposits and are subject to the supervision of the BNR (Central Bank of Rwanda). Formal access to savings is more common than access to credit. There are five times more deposit accounts than borrowers, and other studies suggest that only a small portion of the population has access to bank credit. Most commercial banks have failed to penetrate rural areas and branches of commercial and microfinance banks are mostly located in and around Kigali.

Banks wishing to have a presence in Rwanda must apply for a BNR license and submit a business model demonstrating a niche market and have a minimum share capital of US$8 million. The three largest commercial banks, in descending order of market share, are Bank of Kigali, Banque Populaire du Rwanda (BPR) and I&M Bank. Other foreign banks present in Rwanda include Ecobank, GT Bank, Equity Bank, Kenya, Commercial Bank, NCBA (formerly Commercial Bank of Africa (CBA)), Access Bank, Bank of Africa, Cogebanque, Urwego and Development Bank of Rwanda. Long-Term IDR and Support Rating Floor (SRF) have the same rating as Rwanda’s sovereign rating i.e. B+

Tax system

Rwanda derives most of its tax revenue from income taxes and value added tax. However, tax collection is unable to cover fiscal expenditures and Rwanda’s public budget is 20% dependent on foreign development cooperation.

Income tax of FO residents, 10-30%

  1. Basis – A resident is taxed on worldwide income while a non-resident is taxed only on income that originates in Rwanda
  2. Taxable Income – Income from employment, including most employee benefits, is taxable. Profits from the sale of business property are taxable as ordinary income for natural persons at the income tax rate.
  3. Exempt Income – Employment income is exempt from tax in Rwanda for a foreigner who is not a citizen of Rwanda and is received from a foreign government or non-governmental organization under an intergovernmental agreement.

PO income tax – 30%

Taxable income – corporate income tax, taxes on the company’s total income after deducting normal operating expenses.

Value Added Tax – 18%

  1. Taxable services – VAT is charged on the delivery of goods and provision of services.
  2. Rates – The standard VAT rate is 18%, with lower or zero taxation in certain cases of goods.
  3. Registration – The registration threshold for VAT purposes is an annual turnover greater than RWF 20 million, or RWF 5 million in the previous quarter. Voluntary registration is possible for taxpayers with a turnover below the threshold.

VAT refund – Input VAT refund can only be claimed in the month in which the invoice was issued and not in any other period.

Expected development

Rwanda’s public finances are and will remain in deficit for the next two years. A reduction in tax rates cannot be expected. On the other hand, the tax authorities will, under pressure from the government, increase the success rate in tax collection, which is low even in Rwanda due to the widespread gray economy and does not cover a significant part of economic activities.