Rwanda’s food production system is critical to its economic growth, poverty reduction, food security and nutrition, and employment. Agriculture is a major economic sector for the people of Rwanda, employing about 70 percent of the total population.
Agriculture contributes about 31 percent to Gross Domestic Product (GDP), and it stands out as one of the most strategic sectors in Rwanda’s development, according to the Rwanda Development Board.
It accounts for a more significant part of the foreign exchange earnings from exports of products, among them coffee, tea, hides and skins, pyrethrum, and horticulture.
Seventy-five percent of Rwanda’s agricultural production comes from smallholder farmers.
Evidence from the World Bank shows that a one-percent increase in agricultural GDP reduces poverty, on average, by over one percent, whereas a one percent increase in industry or services GDP reduces poverty by less than half of one percent.
Rwanda’s agri-food system can — and needs to — play a key role in accelerating growth, ending poverty and hunger, and contributing to job creation. However, in its current shape, the country’s agri-food system faces several challenges that may undermine the sector’s potential.
First, the sector is large with many actors, making implementation of projects difficult. This partly explains why the sector has attracted cartels that engage in illegal activities that hurt small holder farmers but continue to go unchecked.
A case in point is the ongoing court case involving multiple companies who colluded with government officials and secured exclusive deals to distribute agro-inputs that ended up making it costly and almost impossible for smallholder farmers to stay in business.
The sector also still suffers from a lot of inefficiencies leading to wasteful expenditure as repeatedly documented by the Auditor General’s office.
For instance, recently, lawmakers during the public accounts committee heard that a multi-million project involving the India Export- Import Bank (EXIM Bank) in the Eastern province failed to take off because technocrats at Rwanda Agricultural Board had difficulty implementing an agreement signed after the government acquired a loan of Rwf114.3 billion from Indian Export-Import Bank (EXIM Bank) to execute exports-targeted irrigation (ETI) project.
While the completion date of the project was initially slated for April 2016 but extended to July 2019, a recent audit carried out by the Office of Auditor General noted that in March 2020, seven months after the expected completion date, the project was not yet complete.
While in recent years, the government has moved to address challenges in the sector including getting law enforcement agencies to follow up and break cartels in the agriculture sector.