Journal of Economics and Trade

Abstract

Agricultural Products export is seen as an engine that contributes to the growth of the overall economy of Rwanda, despite these efforts the sector is still characterized with low yields, low level of inputs and limited areas under cultivation due to government dependence on mono-cultural economy. This paper is an attempt to examine the contribution of the agricultural export to the growth of Rwandan economy. The panel of data used was sourced from the statistical bulletin of the Central Bank of Rwanda and National Agricultural Development Board (NAEB), multiple regression was used to analyze the data, the result indicated a positive relationship between agricultural export and Gross Domestic Product (GDP), (Domestic saving, government expenditure on agriculture and foreign direct investment) between the period ranging from 2013-2016. It was also revealed in the study that 81%, 62% and 41% of the Tea, coffee and flowers’ variation in GDP respectively could be explained by Domestic Savings, Government Expenditure and Foreign Direct Investment. In order to improve the agricultural sector it is recommended that government provides more funding for agricultural universities in Rwanda to carry out researches on all areas of agricultural production this will lead to more exports and improvement in the competitiveness of Rwandan agriculture production in international markets. The Central bank of Rwanda should also come up with a stable policy for loan disbursement to farmers at a reasonable interest payback.