Agriculture now accounts for about a fifth of Rwanda’s economy, down from more than a quarter less than a decade ago, as industry and services continue to expand faster.

Figures presented by Prime Minister Justin Nsengiyumva show that agriculture’s share of gross domestic product (GDP) declined from 25.6 per cent in 2017 to 20.3 per cent in 2025.

Over the same period, industry’s share increased from 17.5 per cent to 22 per cent, while services rose from 48.3 per cent to 52.3 per cent.

The shift reflects Rwanda’s broader economic transformation, but economists say the declining share of agriculture raises important questions about productivity, farmers’ incomes, food security and poverty reduction.

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Presenting an assessment of the government’s efforts to develop the financial sector before both chambers of Parliament on Friday, October 2, Nsengiyumva said Rwanda’s GDP grew by an average of seven per cent between 2017 and 2025.

During the same period, industry grew by an average of 8.7 per cent, services by 7.9 per cent and agriculture by 4.4 per cent.

"The continued decline in agriculture’s share of GDP is in line with Rwanda’s vision of building a knowledge-based economy driven by industry and value-added exports,” Nsengiyumva said.

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Not necessarily a bad thing

Jules Ngango, an agricultural economist and lecturer at the University of Rwanda, said agriculture accounting for a smaller share of the economy should not automatically be seen as a negative development.

"For countries in the development process, a decline in agriculture’s share of GDP is not necessarily a negative trend. It could mean that other sectors are becoming more important,” he said.

Ngango said the shift is part of structural transformation, where industry and services expand faster as an economy develops.

"There is a structural transformation in which the contribution of agriculture can sometimes decline,” he said.

The key question, he added, is whether agriculture itself continues to grow and become more productive even as other sectors expand more rapidly.

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Agriculture grew by an average of 4.4 per cent between 2017 and 2025, compared with 8.7 per cent for industry and 7.9 per cent for services.

"Agriculture is growing at only 4.4 per cent, while the other sectors are growing at 7 or 8 per cent. That is something that could raise concerns,” Ngango said.

He said attention should therefore focus on whether agricultural productivity, production and value addition are improving despite the sector’s relatively slower growth.

Farmers’ incomes should also be monitored to determine whether the changing structure of the economy is translating into better livelihoods.

"There could be a concern about whether farmers’ incomes and production are declining,” he said.

Ngango added that agriculture’s importance to food security remains unchanged even if its share of GDP continues to fall.

"What is mainly needed is to ensure that agriculture continues to contribute to food security,” he said.

Why agriculture still matters

Economist Teddy Kaberuka said agriculture’s significance cannot be measured by its share of GDP alone because a large proportion of Rwandans still depend on the sector for their livelihoods.

He said weak agricultural performance could therefore have wider consequences for household incomes and poverty reduction.

Kaberuka also pointed to agriculture’s close links with manufacturing, noting that the sector supplies raw materials to food-processing and other industries.

"Agriculture is the sector that feeds other sectors, such as manufacturing,” he said.

He cited products such as flour and chips as examples of industries that depend on agricultural production for raw materials.

If domestic production does not keep pace with demand, he said, some industries could become increasingly dependent on imported inputs.

Food prices are another concern.

"Agricultural produce is very important. If its contribution declines, it is a serious issue because we need to increase production and prevent prices from rising,” Kaberuka said.

He also pointed to Consumer Price Index data from the National Institute of Statistics of Rwanda, arguing that rising food prices can sometimes reflect gaps between domestic production and demand.

Does growth benefit everyone?

Kaberuka said the expansion of services should also be considered in terms of who participates in those sectors and who benefits from their growth.

Transport, education, financial services, trade and insurance can make significant contributions to GDP, he said, but agriculture remains particularly important because of the number of households that depend on it.

He argued that an economy can record strong GDP growth while some households, particularly those dependent on low-productivity agriculture, continue to face poverty.

"Service sectors such as transport, education, financial services, trade and insurance can increase GDP, but we can still see people remaining poor,” Kaberuka said.

For economic growth to translate into broader improvements in livelihoods, he said, agriculture must continue to develop alongside industry and services.

"To ensure that GDP growth goes together with a decline in poverty, the agriculture sector should also be developed,” he said.