Agricultural development in Rwanda: an overestimated success?

According to the World Bank website, "Rwanda has made impressive development gains since the 1994 genocide and civil war." During the decade ending in 2018, the Rwandan economy grew at an average rate of 7.5 billion pounds, or 5 billion pounds per person per year. The poverty rate fell from 59 billion pounds in 2001 to 39 billion pounds in 2014. The Gini coefficient, which measures income inequality, fell from 0.52 in 2006 to 0.43 in 2017. Paul Kagame, president of Rwanda since 2000, has clearly stated his ambition: to make this small country of 12 million people "the Singapore of Africa." Thanks to his pro-business policies[1], combined with significant investments in human capital (education, health, social protection, etc.), Rwanda would have made “immense progress” towards achieving the Sustainable Development Goals set by the United Nations for 2030[2]It is expected to achieve middle-income status by 2035 and high-income status by 2050.[3].

However, the economic miracle touted by Kigali is being questioned, and not just by opponents of the government. According to a Financial Times investigation published on August 13, 2019, official statistics showing a gradual reduction in poverty since 2001 are inaccurate.[4]. For The Economist magazine[5], this reduction would essentially result from a change made in 2014 in the definition of the poverty line, which would have artificially lowered the level. Corrected, the poverty rate would not have fallen by 6 points (from 45 % in 2011 to 39 % in 2014), as claimed by the Rwandan government, but would have increased by 5 to 7 points. This seems contradictory to the strength of economic growth. But precisely, according to other sources, the growth rate could be overestimated, and inequalities in income distribution may have increased. Allegations that the authorities refute: according to them, the country's economic and social progress is corroborated by other positive trends, such as the expansion of tax revenues or the good results of health surveys; Rwanda is engaged in a profound transformation, which benefits the most deprived.

What about agriculture? The question is all the more legitimate given that this sector provides two-thirds of jobs and approximately 30% of the gross domestic product. We therefore calculated some key indicators of Rwanda's agricultural economy and compared them to the corresponding average indicators for sub-Saharan Africa, excluding South Africa. The indicators were compiled from data published by the United States Department of Agriculture (USDA), which come from international organizations.[6].

Between 1981-85, before the civil war, and 2012-16, the value of agricultural production per hectare, expressed in constant dollars and purchasing power parity (PPP), increased in Rwanda by approximately 60%, twice as fast as the average for sub-Saharan Africa. This success is all the more remarkable given that the Land of a Thousand Hills lives up to its name: most agriculture is practiced on steep, erosion-prone land. Land development (terracing), the spread of fertilizers, the expansion of irrigation, and better market access for farmers have boosted yields and encouraged the production of higher-value crops.

However, population density is high and farms are very small. The average area per agricultural worker is much lower than in the rest of the continent; moreover, it decreased slightly between the two periods studied. This is a variable over which public policies have little direct influence. Improving the situation, that is, increasing the available area per worker, depends on an acceleration in the demand for labor for non-agricultural activities, freeing up land for the benefit of the remaining farmers.

Overall, the value of production per agricultural worker in Rwanda grew faster than the African average (+55 % compared to +35 %), but it remains almost 20 % lower than that of sub-Saharan Africa. However, the value of production per worker is generally positively correlated with agricultural income (table)[7].

A different picture emerges if we consider the value of agricultural production per capita, which indirectly provides information on the country's capacity to produce its food. Between 1981-85 and 2012-16, this indicator increased significantly faster in Rwanda than on the continent (+30 % compared to +18 %) and is approximately 30 % higher than the African average.[8].

The available statistics therefore demonstrate both the progress made in the agricultural sector in recent decades and the extent of the efforts that remain to be made. Of course, they are far from resolving the debate: their reliability is criticized and they say nothing about the fate of the smallest farmers, confined to subsistence farming. According to a detailed study carried out by researchers from different countries[9], "the agricultural revolution in Rwanda is not the success it claims to be"[10], even though promising results have been recorded. However, these results must be assessed in comparison with those achieved by other African countries. From this point of view, Rwanda has nothing to be ashamed of: it obtained the best overall score, among forty-seven countries, in the first biennial report, presented at the African Union Summit in January 2018, on the implementation of the 2014 Malabo Declaration on the transformation of African agriculture.[11]The second report is eagerly awaited.

[1] In the World Bank's Doing Business 2020 report, published in October 2019, which ranks 190 countries according to their business-friendly regulations, Rwanda ranks 38th, ahead of Portugal and Poland. It ranks second among sub-Saharan African countries, behind Mauritius.

[2] Viewpoint of Uzziel Ndagijimana, Minister of Finance and Economic Planning of Rwanda, in the report Foresight Africa. Top priorities for the continent 2020-2030, published by the Brookings Institution on January 8, 2020.

[3] The World Bank's per capita gross national income threshold, in current 2018 US dollars, is $1,026 to $12,375 for middle-income countries and $12,376 for high-income countries. With a per capita income of $780, Rwanda is classified as a low-income country.

[4] “The Financial Times questions the data on poverty in Rwanda,” Le Monde Afrique, August 15, 2019.

[5] “Has Rwanda been fiddling with its numbers? », The Economist, August 15th 2019.

[6] USDA ERS, “International Agricultural Productivity”, updated 21st November 2019, https://www.ers.usda.gov/data-products/international-agricultural-productivity/

[7] As an illustration, according to the World Bank, the gross value added per worker in the "agriculture, forestry, fishing" sector over the period 2016-2018 was on average 580 dollars in Rwanda compared to around 2,600 dollars in Senegal (in US dollars, 2010 value).

[8] In 2012-16, the average value of agricultural production per capita was $239 in Rwanda compared to $185 in sub-Saharan Africa, excluding South Africa (data expressed in US dollars at purchasing power parity, 2004-2006 value).

[9] An Ansoms et al., 2018. “The Rwandan agrarian and land sector modernization: confronting macro performance with lived experiences on the ground”, Review of African Political Economy, 45:157, 408-431.

[10] Title of the article published (in English) in The Conversation, signed by researchers of the study cited in note 8, December 13, 2017.

[11] “Inaugural Report of the African Union Commission Biennial Review of the Implementation of the Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods”, Assembly of the Union, Thirtieth Ordinary Session, 28-29 January 2018, Addis Ababa.