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Rwanda vs. Tanzania

Economy

RwandaTanzania
Economy - overview

Rwanda is a rural, agrarian country with agriculture accounting for about 63% of export earnings, and with some mineral and agro-processing. Population density is high but, with the exception of the capital Kigali, is not concentrated in large cities - its 12 million people are spread out on a small amount of land (smaller than the state of Maryland). Tourism, minerals, coffee, and tea are Rwanda's main sources of foreign exchange. Despite Rwanda's fertile ecosystem, food production often does not keep pace with demand, requiring food imports. Energy shortages, instability in neighboring states, and lack of adequate transportation linkages to other countries continue to handicap private sector growth.

The 1994 genocide decimated Rwanda's fragile economic base, severely impoverished the population, particularly women, and temporarily stalled the country's ability to attract private and external investment. However, Rwanda has made substantial progress in stabilizing and rehabilitating its economy well beyond pre-1994 levels. GDP has rebounded with an average annual growth of 6%-8% since 2003 and inflation has been reduced to single digits. In 2015, 39% of the population lived below the poverty line, according to government statistics, compared to 57% in 2006.

The government has embraced an expansionary fiscal policy to reduce poverty by improving education, infrastructure, and foreign and domestic investment. Rwanda consistently ranks well for ease of doing business and transparency.

The Rwandan Government is seeking to become a regional leader in information and communication technologies and aims to reach middle-income status by 2020 by leveraging the service industry. In 2012, Rwanda completed the first modern Special Economic Zone (SEZ) in Kigali. The SEZ seeks to attract investment in all sectors, but specifically in agribusiness, information and communications, trade and logistics, mining, and construction. In 2016, the government launched an online system to give investors information about public land and its suitability for agricultural development.

Tanzania has achieved high growth rates based on its vast natural resource wealth and tourism with GDP growth in 2009-17 averaging 6%-7% per year. Dar es Salaam used fiscal stimulus measures and easier monetary policies to lessen the impact of the global recession and in general, benefited from low oil prices. Tanzania has largely completed its transition to a market economy, though the government retains a presence in sectors such as telecommunications, banking, energy, and mining.

The economy depends on agriculture, which accounts for slightly less than one-quarter of GDP and employs about 65% of the work force, although gold production in recent years has increased to about 35% of exports. All land in Tanzania is owned by the government, which can lease land for up to 99 years. Proposed reforms to allow for land ownership, particularly foreign land ownership, remain unpopular.

The financial sector in Tanzania has expanded in recent years and foreign-owned banks account for about 48% of the banking industry's total assets. Competition among foreign commercial banks has resulted in significant improvements in the efficiency and quality of financial services, though interest rates are still relatively high, reflecting high fraud risk. Banking reforms have helped increase private-sector growth and investment.

The World Bank, the IMF, and bilateral donors have provided funds to rehabilitate Tanzania's aging infrastructure, including rail and port, which provide important trade links for inland countries. In 2013, Tanzania completed the world's largest Millennium Challenge Compact (MCC) grant, worth $698 million, but in late 2015, the MCC Board of Directors deferred a decision to renew Tanzania's eligibility because of irregularities in voting in Zanzibar and concerns over the government's use of a controversial cybercrime bill.

The new government elected in 2015 has developed an ambitious development agenda focused on creating a better business environment through improved infrastructure, access to financing, and education progress, but implementing budgets remains challenging for the government. Recent policy moves by President MAGUFULI are aimed at protecting domestic industry and have caused concern among foreign investors.

GDP (purchasing power parity)$28.118 billion (2019 est.)

$25.695 billion (2018 est.)

$23.665 billion (2017 est.)

note: data are in 2017 dollars
$149.785 billion (2019 est.)

$141.585 billion (2018 est.)

$134.274 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate6.1% (2017 est.)

6% (2016 est.)

8.9% (2015 est.)
6.98% (2019 est.)

6.95% (2018 est.)

6.78% (2017 est.)
GDP - per capita (PPP)$2,227 (2019 est.)

$2,089 (2018 est.)

$1,975 (2017 est.)

note: data are in 2017 dollars
$2,660 (2019 est.)

$2,590 (2018 est.)

$2,530 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 30.9% (2017 est.)

industry: 17.6% (2017 est.)

services: 51.5% (2017 est.)
agriculture: 23.4% (2017 est.)

industry: 28.6% (2017 est.)

services: 47.6% (2017 est.)
Population below poverty line38.2% (2016 est.)26.4% (2017 est.)
Household income or consumption by percentage sharelowest 10%: 2.1%

highest 10%: 43.2% (2011 est.)
lowest 10%: 2.8%

highest 10%: 29.6% (2007)
Inflation rate (consumer prices)3.3% (2019 est.)

-0.3% (2018 est.)

8.4% (2017 est.)
3.4% (2019 est.)

3.5% (2018 est.)

5.3% (2017 est.)
Labor force6.227 million (2017 est.)24.89 million (2017 est.)
Labor force - by occupationagriculture: 75.3%

industry: 6.7%

services: 18% (2012 est.)
agriculture: 66.9%

industry: 6.4%

services: 26.6% (2014 est.)
Unemployment rate2.7% (2014 est.)10.3% (2014 est.)
Distribution of family income - Gini index43.7 (2016 est.)

51.3 (2010 est.)
40.5 (2017 est.)

34.6 (2000)
Budgetrevenues: 1.943 billion (2017 est.)

expenditures: 2.337 billion (2017 est.)
revenues: 7.873 billion (2017 est.)

expenditures: 8.818 billion (2017 est.)
Industriescement, agricultural products, small-scale beverages, soap, furniture, shoes, plastic goods, textiles, cigarettesagricultural processing (sugar, beer, cigarettes, sisal twine); mining (diamonds, gold, and iron), salt, soda ash; cement, oil refining, shoes, apparel, wood products, fertilizer
Industrial production growth rate4.2% (2017 est.)12% (2017 est.)
Agriculture - productsbananas, sweet potatoes, cassava, potatoes, plantains, beans, maize, gourds, milk, tarocassava, maize, sweet potatoes, sugar cane, rice, bananas, vegetables, milk, beans, sunflower seed
Exports$1.05 billion (2017 est.)

$745 million (2016 est.)
$7.827 billion (2017 est.)

$5.697 billion (2016 est.)
Exports - commoditiesgold, refined petroleum, coffee, tea, tin (2019)gold, tobacco, cashews, sesame seeds, refined petroleum (2019)
Exports - partnersUnited Arab Emirates 35%, Democratic Republic of the Congo 28%, Uganda 5% (2019)India 20%, United Arab Emirates 13%, China 8%, Switzerland 7%, Rwanda 6%, Kenya 5%, Vietnam 5% (2019)
Imports$1.922 billion (2017 est.)

$2.036 billion (2016 est.)
$9.972 billion (2017 est.)

$8.464 billion (2016 est.)
Imports - commoditiesrefined petroleum, gold, raw sugar, packaged medicines, broadcasting equipment (2019)refined petroleum, palm oil, packaged medicines, cars, wheat (2019)
Imports - partnersChina 17%, Kenya 10%, Tanzania 9%, United Arab Emirates 9%, India 7%, Saudi Arabia 5% (2019)China 34%, India 15%, United Arab Emirates 12% (2019)
Debt - external$3.258 billion (31 December 2017 est.)

$2.611 billion (31 December 2016 est.)
$22.054 billion (2019 est.)

$20.569 billion (2018 est.)
Exchange ratesRwandan francs (RWF) per US dollar -

839.1 (2017 est.)

787.25 (2016 est.)

787.25 (2015 est.)

720.54 (2014 est.)

680.95 (2013 est.)
Tanzanian shillings (TZS) per US dollar -

2,319 (2020 est.)

2,300 (2019 est.)

2,299.155 (2018 est.)

1,989.7 (2014 est.)

1,654 (2013 est.)
Fiscal yearcalendar year1 July - 30 June
Public debt40.5% of GDP (2017 est.)

37.3% of GDP (2016 est.)
37% of GDP (2017 est.)

38% of GDP (2016 est.)
Reserves of foreign exchange and gold$997.6 million (31 December 2017 est.)

$1.104 billion (31 December 2016 est.)
$5.301 billion (31 December 2017 est.)

$4.067 billion (31 December 2016 est.)

note: excludes gold
Current Account Balance-$622 million (2017 est.)

-$1.336 billion (2016 est.)
-$1.313 billion (2019 est.)

-$1.898 billion (2018 est.)
GDP (official exchange rate)$9.136 billion (2017 est.)$60.633 billion (2019 est.)
Credit ratingsFitch rating: B+ (2014)

Moody's rating: B2 (2016)

Standard & Poors rating: B+ (2019)
Moody's rating: B2 (2020)
Ease of Doing Business Index scoresOverall score: 76.5 (2020)

Starting a Business score: 93.2 (2020)

Trading score: 75 (2020)

Enforcement score: 69.1 (2020)
Overall score: 54.5 (2020)

Starting a Business score: 74.4 (2020)

Trading score: 20.2 (2020)

Enforcement score: 61.7 (2020)
Taxes and other revenues21.3% (of GDP) (2017 est.)15.2% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-4.3% (of GDP) (2017 est.)-1.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 20.5%

male: 18.8%

female: 22.4% (2019 est.)
total: 3.9%

male: 3.1%

female: 4.6% (2014 est.)
GDP - composition, by end usehousehold consumption: 75.9% (2017 est.)

government consumption: 15.2% (2017 est.)

investment in fixed capital: 22.9% (2017 est.)

investment in inventories: 0.5% (2017 est.)

exports of goods and services: 18.2% (2017 est.)

imports of goods and services: -32.8% (2017 est.)
household consumption: 62.4% (2017 est.)

government consumption: 12.5% (2017 est.)

investment in fixed capital: 36.1% (2017 est.)

investment in inventories: -8.7% (2017 est.)

exports of goods and services: 18.1% (2017 est.)

imports of goods and services: -20.5% (2017 est.)
Gross national saving12.5% of GDP (2018 est.)

15.5% of GDP (2017 est.)

7.5% of GDP (2015 est.)
30.5% of GDP (2017 est.)

23.1% of GDP (2016 est.)

24.9% of GDP (2015 est.)

Source: CIA Factbook