Commodity Export Diversification in Rwanda - Many Export Discoveries with Little Scaling-Up

Abstract

Increased diversification of commodity exports, and increased numbers of high-value commodity exports, are needed to generate employment and meet the Government of Rwanda's targets for poverty reduction. This chapter presents evidence that increased diversification of exports is linked to increased export and GDP growth. Yet, commodity exports in Rwanda are concentrated in a few commodities. The relationship between export diversification and export growth in SSA confirms that for stable, sustainable, and higher export growth, export diversification is necessary. In addition to export promotion policies such as those which attract FDI, decision makers need to design policies to accelerate diversification of the export mix. The effect of diversification on export growth will be maximized if diversification shifts the export mix in the direction of manufactured or resource-based products (low or medium technology). This implies both sector specific public strategies that can influence the export mix; and second, public investments in human capital and supporting infrastructure.