Rwanda is a relatively small (26,338 km²), hilly and landlocked country in East Africa. It is characterized by mountains to the west and savannah to the east, with numerous lakes and a temperate tropical highland climate. The country borders the Democratic Republic of Congo, Tanzania, Uganda and Burundi.
Over the past 60 years, Rwanda's population has increased by more than five times, and by 2050, could reach 25.8 million. Rwanda has a gross density approaching 1000 p/km², the highest in Africa .
Despite its tragic history, the 1994 genocide against the Tutsis, Rwanda is recognised as one of Africa’s success stories in terms of economic growth. Since the early 2000s and the launch of Vision 2020, Rwanda embarked on economic aspirations and intensified its efforts to lay the foundations for sustained growth. Steady economic growth has seen the percentage of Rwanda’s population living below the poverty line fall from 77% in 2001, to 55% in 2017 . Unfortunately, COVID-19 has affected Rwanda’s development and economic outlook. Due to the pandemic, Rwanda's GDP fell by 3.4% in 2020, compared to the 8% expansion expected before the pandemic .
Despite economic growth, Rwanda faces challenges of poor infrastructure, including access to electricity, food security, and high levels of unemployment and underemployment, especially amongst women and the youth.
Rwanda's economy is agrarian, and agriculture employs nearly 64% of the population, accounting for over 26% of GDP . Industry and mining, and tourism and services are also important sectors contributing to the Rwanda’s economy.
Urbanization has been identified as a future engine of growth and economic transformation in Rwanda. This has been underlined in national strategic documents, notably Vision 2020 and Vision 2050. Significant efforts have been made to promote urbanization as a strategy to reduce dependence on the agricultural sector for employment. According to the latest available data, 17.5% of Rwanda's population is urban, below the 35% initially forecast by Vision 2020 .
Technology and innovation in Rwanda are positioned as key drivers of socio-economic development. Rwanda has hosted SMART Africa's headquarters in Kigali since 2016 and has been guided by the Smart Rwanda Master Plan (SRMP) to transform Rwanda into a knowledge-based economy.
The Ministry of the Environment (MoE) is the coordinating institution of Environment and Natural Resources Sector in Rwanda . The conservation, protection, and development of the environment is carried out by a number of Executing agencies, mainly Rwanda Environment Management Authority (REMA) and its sister agencies, and the Rwanda Green Fund (FONERWA) which coordinates investment funds for the environment and climate change at the national level.
Rwanda's Environmental Policy, in 2003, was one of Rwanda’s first efforts to secure the environment as a key component of its development agenda . Rwanda has since, shown a clear determination to protect the environment through its development plans, including the Economic Development and Poverty Reduction Strategy 2013 -2018, Vision 2020, the National Transformation Strategy 1 for 2017-2024 and Vision 2050.
Environmental finance is the main force that acts on Rwanda's path towards environmental governance. The GoR's environmental funding allocation to support the country's mission towards sustainability shows a commitment to the environment, although gaps exist . Currently, Rwanda knows the cost of its 10-year climate program (US$ 11 billion until 2030), but the total cost of implementing its Green Growth Strategy until 2050 is still unknown . Moving forward, the GoR should continue to prioritize budgetary resources for the environment and work with donors to expand funding options.
The EU has actively and substantially supported Rwanda’s economic growth and development plans . Bilateral collaboration between Rwanda and the EU began mainly in the form of humanitarian aid following the 1994 genocide against the Tutsi. Today, EU’s cooperation with Rwanda is in the context of the implementation of the European Green Deal agenda and the Rwandan government’s objectives for a green and resilient economy .
Previous EU actions under the 11th National Indicative Program (NIP) 2014-2020 for Rwanda were linked with Vision 2020 and poverty reduction through three main sectors, energy, agriculture, and governance . This program has contributed to key achievements in Rwanda. For example, access to electricity increased from 28% in 2015 to over 60% in 2020, and the design and implementation of an agricultural policy led to a more productive and green agricultural sector (Nicola Bellomo, the EU Head of Delegation to Rwanda) .
The next priorities of the Multiannual Indicative Program (2021-2027) for EU cooperation are based on Rwanda’s Vision 2050 and will focus on (i) education, skills and youth employment; (ii) a Green Deal for inclusive development (agriculture and urbanization), as well as (iii) political and economic governance .
Rwanda ranks first among all African countries in terms of dependence on natural resources, but is also highly vulnerable to the predicted impacts of climate change . Thus, the impacts of climate change and their effects on the Rwandan population are significant. Most regions in Rwanda are expected to experience an increase in average rainfall with more intense rainfall and flooding . This will particularly impact the agricultural sector, which is Rwanda’s main economic activity, contributing to a third of the GDP  and employing around 64% of the labor force. In addition, climate change in Rwanda will increase the intensity and frequency of floods and landslides, as well as health problems, erosion and damage to roads and other infrastructure. During the period 2016 to 2020, floods, landslides, droughts, and earthquakes directly affected, on average, more than 90,000 people per year .
Rwanda’s landscapes and natural forests are very rich in biodiversity, providing important goods and services to support the national economy and Rwandan livelihoods . For example, the development of tourism in Rwanda, mainly based on nature, is a key source of development, poverty reduction and employment. Tourism is estimated to have generated US $ 498 million in 2019 (17% increase from 2018), constituting 50.1% of all service exports in Rwanda. 10% of all revenue generated by tourism in the national park and the core area of the biosphere reserve in Rwanda is allocated to community development projects . Biodiversity loss poses a serious threat to Rwanda and is a key environment-development challenge . In particular, it is associated with challenges for food security, poverty reduction and an increased economic risk to the Rwandan community .
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