Fibre glass cables in the ground, cashless purchases of bus tickets, and laptops for high school kids – these are most probably not the first things coming to one´s mind when thinking of Rwanda. Eighteen years after the genocide, the East African country maintains a substantial level of GDP growth. But how sustainable is the economic upturn?
Walking the streets of Rwanda´s capital Kigali, one can feel the atmosphere of departure to a better future. Skyscrapers and immaculately clean streets tell the story of an uprising city. Based on the strategy paper “Vision 2020” released by Rwanda´s Ministry of Finance and Economic Planning in 2000, the country´s government seeks to build a modern, knowledge-based society with Kigali to become East Africa’s financial and technological hub .
The fastest developing sectors are agriculture, building industry and services. Due to a shortage in natural resources the manufacturing industry remains underdeveloped. This explains the attempt to move straight from an agrarian society to a post-industrial era.
But it is a long process to rebuild a country from scratch again, carrying such heavy historical burden. Rwanda still has to deal with significant social impacts of the genocide such as an unbalanced sex-ratio, orphan households and high diffusion of HIV. The majority of the country´s population lives in poverty. In 2002 Rwanda´s President Paul Kagame, introduced an internationally recognised poverty reduction strategy.
House building projects in the countryside and the distribution of “100-Dollar-Laptops” were aimed to include, and indeed aid, the whole population.
There are indicators which give hope for a stable and sustainable development. Compared to other African countries Rwanda does not face much corruption. In Transparency International´s Corruption Perceptions Index Rwanda ranks 49 out of 182 countries.
Within recent years, regulatory reforms have improved Rwanda’s entrepreneurial environment significantly, such as simplifying procedures for starting a business, registering property and dealing with customs. Today Rwanda has the most efficient start-up environment in the East African region.
Political stability is probably the most important factor for the sustainability of Rwanda´s economic upturn in a region that has faced several conflicts in its recent history. In 2009 Rwanda joined the East African Community aiming for local integration. Negotiations for establishing the East African Monetary Union are underway – to create a common market place and simplify the free movement of people, goods, services and capital.
Rwanda´s integration into the East African community and its strategic location in a region with more than 120 million people could be the key to become an internationally recognised emerging market.
Photos by Noodlepie