Rwanda – A shining light in Africa

Grant Hancock
2 years ago

Rwanda, to many people, conjures up images of that small country in central Africa where, 25 years ago, genocide claimed the lives of 800 000  people in a period of 100 days. This mass murder was probably the greatest atrocity in modern history.

Since that time Rwanda has made an astonishing recovery and has developed social stability and a booming economy. Rwanda has become a model post-liberation success story. The economic success has been characterized by the removal of much red tape and an investment friendly policy. Today, a visitor to the capital city of Kigali will see a skyline dominated by skyscrapers and ongoing construction. The infrastructure development is strikingly apparent.

In terms of cleanliness Kigali is worlds apart from the dilapidated conditions found in the majority of major African cities, even in more developed economies such as South Africa. This is due to a novel approach by the government which mandates that every citizen in the capital city of Kigali spend time on the streets once a month on what is called “Umuganda” which means “coming together in common purpose”. This program, together with a ban on plastic bags in the country has resulted in Kigali’s streets being some of the cleanest in the world.

The progress made means that Rwanda is not only one of the best performing countries in Africa, but is beginning to compare favourably on the world stage. 

The country is remarkably safe with levels of violent crime recorded at 2.52 per 100 000, far lower than neighbouring countries Burundi (6.02), Tanzania (6.85), Uganda (11.0), and the DR Congo (13.55). In contrast South Africa has an official homicide rate of 35.90 per 100 000.

Unemployment presently stands at 13.2%, high by European standards but, a far cry from the 29.5% unemployment announced in South Africa earlier this year.

The country is also noted as one the least corrupt in Africa, and one of the easiest countries in the world to do business. In 2017 Rwanda was ranked as the third least corrupt country in Africa after the Seychelles and Botswana. In 2019 the World Bank Business Index rates Rwanda as the 29th easiest country to do business in the world and the only low income country in the top 30.

Education is recognized as a high priority sector and the government has installed effective measures to provide both basic and tertiary education. Significant investments in education have been made by American and Chinese Universities, attracted by the safe and stable environment and business oriented government, with large and modern campuses erected providing young Rwandans with access to world class education.

This steady improvement by Rwanda has resulted in an attractive investment climate and an steadily improving economic and political position on the continent.

The agriculture sector has been identified as a key area of opportunity, not just in terms of food security but as a source of employment and economic growth with a focus on import substitution and growing national exports. With a renewed focus on manufacturing, the agro-processing sector is set for significant investments in the coming years.

Another key growth sector is the construction industry. A construction boom started roughly 10 years ago with the government pushing for more modern structures (housing and commercial). In recent years numerous world class building projects have been completed, with more planned. President Paul Kamage, recently opened the modern Kigali arena, which has a capacity for 10,000 spectators’ and will host national and international competitions.

Traditional logic dictates that a developing country such as Rwanda (especially where Rwanda was 20 years ago) should focus on primary industries first (agriculture or mining). Developing economies should then progress to focus on manufacturing for economic growth, leveraging the progress made in primary sectors. Instead Rwanda has focused on services to drive its economic restructuring. This fits into a broader strategy which sees Rwanda modelling itself after Singapore, one of the largest success stories of the last few decades.

Rwanda has, however, recently shifted policy slightly to focus more on manufacturing sector growth. Several policies and strategies such as the National Industrial Policy and the National Export strategy have been developed to accelerate industrial and export growth. To increase local domestic and foreign supply of manufactured goods, the Government has put in place the Special Economic Zone and four industrial parks to address the shortcomings in the business environment by developing infrastructures, streamlining business regulations and facilitating fast moving investors.

The similarities between Rwanda and Singapore go further than an uncompromising zeal for cleanliness and a focus on technology and services. Like Singapore, political power is dominated by one party with little competition present from opposition parties. The political dynamics within Rwanda have drawn notable criticism as Paul Kagame amended the constitution to allow for a third term of office, which he won by a landslide in an election which drew severe criticism from numerous quarters.

President Kagame has been the driving force behind the development of the Rwandan economy, and still appears to enjoy major support in the country. While the democratic process may not match western standards, the results of his leadership are irrefutable. The only question that exists is what happens after he leaves office.

For the time being then, Rwanda looks set for continued growth. Rwanda is still a far way from emulating the meteoric rise of Singapore, but all journeys start somewhere and Rwanda has already come so far.