Rwanda's Economic Growth Slows to 7.1% in 2025 Amid Sectoral Shifts and Global Challenges

Rwanda’s economy is projected to grow at a more moderate 7.1% in 2025, down from an estimated 8.9% in 2024, according to Finance Minister Yusuf Murangwa. The slowdown reflects a recalibration of growth expectations against a backdrop of global economic uncertainty and internal sectoral dynamics. Despite the deceleration, Rwanda remains one of Africa’s fastest-growing economies, with its services, mining, and agricultural sectors continuing to drive opportunities for investors.

2024: A Year of Robust Sectoral Growth

Rwanda’s economy surged in 2024, fueled by strong performances in key sectors. The services sector, which accounts for nearly half of GDP, expanded by 10% year-on-year, driven by wholesale/retail trade (up 19%), financial services (15%), and tourism (17%). Meanwhile, the mining and quarrying sub-sector saw a 26% output increase, with exports of cassiterite, coltan, and wolfram rising sharply. Agriculture, though less dynamic, grew 4%, supported by a 22% jump in coffee production.

The country’s nominal GDP reached Frw 18.785 trillion in 2024, a 13% increase from 2023. However, this figure reflects current market prices and does not fully account for the 29% informal economy, which some analysts argue understates true economic activity.

2025 Outlook: A More Measured Pace

The projected 7.1% growth for 2025, while slower, is still robust compared to regional peers. The finance minister attributes the moderation to cautious global demand, rising debt costs, and structural challenges in sustaining high mining output. The mining sector’s 26% surge in 2024, for instance, may prove difficult to repeat in a less buoyant global commodities market.

The services sector, however, is expected to remain resilient. Tourism, a cornerstone of Rwanda’s economy, continues to rebound post-pandemic, with visitor numbers up 18% in early 2025. Additionally, the government’s $47 million investment in irrigation infrastructure and $30 billion climate action grants from Germany and China could bolster agricultural and green energy sectors.

Investment Opportunities in Rwanda’s Sectors

1. Technology and Financial Services:
   Rwanda’s tech ecosystem is booming, with Kigali positioned as a regional fintech hub. The growth of mobile money platforms and the expansion of digital banking services offer scalable investment avenues.

2. Mining and Minerals:
   Despite the projected slowdown, Rwanda’s mineral exports—particularly coltan and cassiterite—remain critical to global supply chains. Investors should monitor XME:COLTAN price trends and explore partnerships with local mining firms.

3. Agriculture and Agro-processing:
   With coffee production expected to grow further and the government prioritizing irrigation projects, agro-technology and value-added processing (e.g., organic coffee exports) present high ROI opportunities.

Risks and Considerations

• Global Economic Downturn: A slowdown in China or Europe could reduce demand for Rwanda’s minerals and agricultural exports.
• Informal Economy Challenges: While the informal sector fuels much of Rwanda’s GDP, its exclusion from formal metrics complicates risk assessment for investors.
• Debt Management: Rwanda’s public debt-to-GDP ratio rose to 53% in 2024, requiring vigilance to avoid over-leverage.

Conclusion: A Steady Hand in a Volatile World

Rwanda’s 2025 growth projection of 7.1% underscores a deliberate shift toward sustainable, diversified growth rather than chasing high short-term numbers. The economy’s reliance on resilient sectors like services, tourism, and tech positions it well for long-term stability. Investors should focus on sector-specific opportunities—such as fintech, renewable energy, and agro-processing—that align with government priorities.

While the slowdown from 2024’s 8.9% is notable, Rwanda’s fundamentals remain strong. With $66 billion in PPP GDP (per World Economics estimates) and a young, tech-savvy workforce, the country is primed to attract capital in sectors that balance growth with resilience. For investors willing to navigate its complexities, Rwanda offers a compelling gateway to East Africa’s rising economic potential.