Transport, Communication and Trade in Rwanda
Senior 2 · Geography and Environment
Transport, Communication and Trade in Rwanda
Lesson 4 of 4
20 min
In the 1980s world coffee prices fell sharply. Rwanda depended heavily on coffee exports, so its earnings fell and economic growth became unsteady. The lesson has not been forgotten: a country that sells only one or two products is at the mercy of their prices. This lesson weighs what trade does for Rwanda, what holds it back, and how the country is responding.
| Problem | Why it matters | Solution |
|---|---|---|
| Landlocked position | Goods travel 1,500 to 1,700 km by road to the sea, which raises costs and delays | Use both corridors; build the standard gauge railway; faster border procedures |
| Trade deficit | Imports cost more than exports earn, draining foreign exchange | Increase exports; make more goods at home (“Made in Rwanda”) to replace imports |
| Few, mostly raw exports | Raw coffee, tea and ores earn little and their prices rise and fall on world markets | Diversify (horticulture, manufactures, tourism, services) and add value by processing before export |
| Dependence on a few buyers | If trade with a main partner is disrupted, earnings fall | Find new markets through the EAC, COMESA, AfCFTA and trade missions |
| Border closures and non-tariff barriers | Disputes, checks and paperwork hold up trucks (the Gatuna border was closed in 2019) | Diplomacy, regional agreements, and joint border posts where both countries check goods at once |
| Competition from cheap imports | Local producers lose customers | Better quality and standards; promote local products |
| Insecurity in parts of the region | Makes routes and markets unsafe | Regional peace efforts and secure corridors |
| Smuggling | Loss of tax revenue and unfair competition | Border patrols and lower barriers that remove the reason to smuggle |
| Small home market and limited capital | Firms cannot grow large | Regional markets; credit for traders and exporters |
The prices below are invented for the calculation, not real market data. A coffee cooperative exports 40,000 kg of green coffee a year.
Tip
Exam technique: problem → effect → solution. “Rwanda is landlocked → goods travel about 1,700 km to Mombasa → imports cost more → build the railway and speed up borders.” A matched chain like this earns more marks than two separate lists.
Solution: it earns foreign exchange, gives access to goods Rwanda does not produce such as fuel, and creates jobs (also markets for farmers, government revenue, specialisation).
Solution: roasted, packed or specialty coffee sells for a higher price than raw beans, so each kilogram earns more and creates processing jobs at home.
Solution: they lower tariffs and other barriers, opening larger markets than Rwanda's own.
Solution: 10,000 ÷ 50,000 × 100 = 20%.
Solution: partly. Making cement or milk at home saves foreign exchange, but a small market limits it, and many goods (fuel, phones) cannot be made locally, so raising and diversifying exports is also needed.
Summary
Sources and credits
The problem and solution table, the worked example (illustrative prices) and the practice items are written by Ganzaa.
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
