2022 Index of Economic Freedom

Rwanda

OVERALL SCORE57.1
WORLD RANK105
Rule of Law

Property Rights61.1

Judicial Effectiveness26.6

Government Integrity54.7

Government Size

Tax Burden79.1

Government Spending76.3

Fiscal Health61.6

Regulatory Efficiency

Business Freedom50.7

Labor Freedom42.6

Monetary Freedom74.4

Open Markets

Trade Freedom58.2

Investment Freedom60.0

Financial Freedom40.0

Create a Comparison Chart

See how Rwanda compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 13.0 million
  • GDP (PPP):
    • $29.6 billion
    • -0.2% growth
    • 5.5% 5-year compound annual growth
    • $2,337 per capita
  • Unemployment:
    • 1.4%
  • Inflation (CPI):
    • 8.0%
  • FDI Inflow:
    • $135.0 million

Rwanda’s economic freedom score is 57.1, making its economy the 105th freest in the 2022 Index. Rwanda is ranked 16th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

In the past half-decade, the Rwandan economy accelerated from 2017 through 2019, contracted in 2020, and resumed growth in 2021. Economic freedom has fluctuated over the same five years. With significant decreases in scores for judicial effectiveness, fiscal health, and business freedom, Rwanda has recorded a steep 10.5-point overall loss of economic freedom since 2017 and has fallen from the “Moderately Free” category to the “Mostly Unfree” category. Monetary freedom is somewhat promising, but judicial effectiveness and financial freedom are seriously deficient.

IMPACT OF COVID-19: As of December 1, 2021, 1,343 deaths had been attributed to the pandemic in Rwanda, and the government’s response to the crisis ranked 55th among the countries included in this Index in terms of its stringency. The economy contracted by 0.2 percent in 2020.

Close

Background

Decades of violence followed Rwanda’s independence from Belgium in 1959. In 1994, Paul Kagame’s Tutsi-led Rwandan Patriotic Front seized power after state-sponsored genocide killed an estimated 800,000 people, mostly Tutsis. Kagame has been president since 2000 and was reelected to seven-year terms in 2010 and 2017 amid allegations of fraud, intimidation, and violence. In 2015, voters approved a constitutional change that would permit the 62-year-old Kagame to govern until 2034 and strengthen his authoritarian rule. In July 2021, Rwanda deployed 1,000 security service personnel to Mozambique to fight an insurgency linked to Islamic State terrorists. Tourism, minerals, coffee, and tea are the main sources of foreign exchange.

Rule of Law

Property Rights 61.1 Create a Graph using this measurement

Judicial Effectiveness 26.6 Create a Graph using this measurement

Government Integrity 54.7 Create a Graph using this measurement

The law recognizes and protects property and contractual rights. The inadequately resourced judiciary is not yet fully independent of the executive and suffers from capacity constraints and a heavy case backlog. Although graft remains a problem, Rwanda was ranked 49th out of 180 countries and cited as one of sub-Saharan Africa’s three least corrupt nations in Transparency International’s 2020 Corruption Perceptions Index.

Government Size

The top individual income and corporate tax rates are 30 percent. Other taxes include value-added and property transfer taxes. The overall tax burden equals 17.1 percent of total domestic income. Government spending has amounted to 28.1 percent of total output (GDP) over the past three years, and budget deficits have averaged 4.4 percent of GDP. Public debt is equivalent to 61.0 percent of GDP.

Regulatory Efficiency

Starting a business is easy, but non-regulatory factors such as geography and a small domestic market for goods and services can make operating a business a challenge. Affordable credit can be hard to obtain. All eight of the International Labor Organization’s core conventions have been ratified. The IMF projected that subsidies would consume about 2.6 percent of GDP in fiscal year 2021.

Open Markets

Rwanda has two preferential trade agreements in force. The trade-weighted average tariff rate is 13.4 percent, and 30 nontariff measures are in effect. With most sectors open to foreign investment, the investment regime is still evolving. However, it is not conducive to the dynamic expansion of new investment. Despite some progress, the cost of financing remains high, and access to banking services is limited.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius70.9-6.1
2Cabo Verde66.72.9
3Botswana64.8-2.8
4Côte d'Ivoire61.6-0.1
5Seychelles61.1-5.2
6Benin611.4
7São Tomé and Príncipe60.34.4
8Senegal602.0
9Ghana59.80.6
10Tanzania59.5-1.8
11Namibia59.2-3.4
12Madagascar58.91.2
13Burkina Faso58.31.8
14The Gambia58-0.8
15Togo57.2-0.3
16Rwanda57.1-11.2
17South Africa56.2-3.5
18Mali55.90.3
19Gabon55.8-2.3
20Mauritania55.3-0.8
21Djibouti55.3-0.9
22Niger54.9-2.4
23Nigeria54.4-4.3
24Uganda54.2-4.4
25Guinea54.2-2.3
26Malawi530.0
27Cameroon52.9-0.5
28Kenya52.6-2.3
29Angola52.6-1.6
30Sierra Leone520.3
31Eswatini51.4-3.7
32Mozambique51.3-0.3
33Comoros50.4-5.3
34Chad49.8-0.6
35Ethiopia49.6-2.1
36Zambia48.7-1.7
37Republic of Congo48.5-2.2
38Lesotho48.1-5.4
39Liberia47.9-1.3
40Democratic Republic of Congo47.6-1.4
41Equatorial Guinea47.2-2.0
42Guinea-Bissau46-8.9
43Central African Republic45.7-3.1
44Eritrea39.7-2.6
45Burundi39.4-10.5
46Zimbabwe33.1-6.4
47Sudan32-7.1
See Entire Region List ›

View all countries ›

Back to Top