As a hilly and high altitude country, it does, however, benefit from a mix of agriculture friendly agro-ecological zones and micro-climates. But while clear-minded governmental planning and investments have led to strong economic growth and declines in poverty, the rates of undernourishment remain high at around 35 percent, since the mid-2000s. While Rwanda is often referred to as an example of good policy- driven development, it started off from a low bar, post-genocide in the mid-90s. Eighty percent of the population still lives on less than $3.10 per day, and almost 70 percent depends on rural livelihoods. Like other countries, the agricultural sector plays a decreasing, but still significant, role in overall economic growth.

Thanks to increased public investment, Rwanda’s economic growth has averaged 7.2 per cent over the decade to 2019, while per capita gross domestic product (GDP) grew at 5 per cent annually. This growth has been accompanied by a significant improvement in other social indicators, including poverty reduction, life expectancy, maternal and infant mortality and primary school enrollment. Improvement in the ease of doing business coupled with political stability have also attracted a lot of foreign investments. According to the United Nations Conference on Trade and Development, inflows increased from $382 million in 2018 to $420 million in 2019, one of the highest amounts in sub-Saharan Africa.

Despite a pick-up in other sectors, Rwanda remains largely an agricultural economy. Most of the crop farming is subsistence, although coffee and tea grown in high altitudes with steep slopes and volcanic soils are major foreign exchange earners for the East African Community (EAC) member state. Subsistence crops grown in the country include sweet potatoes, which occupy 11 per cent of the country's farmland, maize (7 per cent), beans (7 per cent), cassava and paddy rice (5 per cent), and banana (3 per cent), according to the 2021 seasonal survey report by the national statistician. Likewise, the crop production has increased; paddy rice by 22 per cent, beans (14 per cent), Irish potatoes (8 per cent), maize (7 per cent), banana (5 per cent) and cassava (4 per cent). However, the proportion of agriculture to the economy in Rwanda has shrunk substantially since 1994 when almost half of the country’s GDP was from farming. By 2020, the World Bank estimated that agriculture constitutes 26.3 per cent of the country’s GDP. This, however, reflects faster growth in other sectors of the economy, such as real estate and mining, rather than an underperformance in crop production and livestock rearing.

Rwanda is also only one of four countries in Africa, and the only in East Africa, to achieve their benchmark targets for CAADP. Over previous years, the government has invested in building out the infrastructure required to underwrite agricultural development (e.g. feeder roads, raising staples production, cooperative governance structures). It has improved staple food production, and under its current Strategic Plan for the Transformation of Agriculture phase 4 (PSTA 4) for 2018-2024, it is shifting to higher yield (in terms of both hectares and income generating) goods, with more production focus on horticulture, vegetables, poultry, pork, and fisheries. The state is also shifting from being the primary investor in agriculture to improving the operating environment for private sector investment. This may improve the operating environment at a more granular level, as the current centre-led model has many challenges. Despite increasing food production, land tenure reforms to consolidate land use, regional crop specialization and monocropping can prevent smallholders from using, managing and benefiting from their land.

The World Bank has noted that the country’s public sector-led development model has shown limitations, with public debt increasing significantly in recent years. This vulnerability became evident when Covid-19 struck. With the country’s export and tourism earnings being disrupted, Rwanda, like a lot of African countries, experienced balance of payment challenges. Going forward, the private sector will play a bigger role in helping to ensure economic growth. Low domestic savings, skills limitations and the high cost of energy are some of the major constraints to private investment. Stronger dynamism in the private sector will help sustain a high investment rate and accelerate growth. Inclusive growth also remains a key challenge in Rwanda. The poverty reduction momentum has weakened in recent years, increasing the urgency to design a medium-term public investment strategy to achieve more efficient allocation of resources geared toward projects critical for broad-based and inclusive economic recovery following the pandemic.