From 2010 to 2018, the Rwandan economy grew by an average of 7 per cent partly through development in key areas such as manufacturing, agriculture, education , health, tourism and ICT. The high rate of growth in Rwanda makes this African country one of the fastest growing nations in the world.
The achievement of Rwanda’s targets set out in Vision 2020 is part of the reason for its high growth. The country’s government has established Vision 2020 with the goal of becoming a middle-income country by 2020, but has postponed that deadline to 2035. Progress in development however remains widespread. Rwanda took one million of its citizens out of poverty between 2005 and 2011 through investment in infrastructure and in the service sector. Thanks to the governmental insistence on raising living conditions while also investing in the private sector, Rwanda’s success story continues.
The high growth in Rwanda resulted after the 1994 genocide, when the government turned its economy around. The genocide destroyed the country and complicated the lives of Rwandan country-dwellers. After the genocide, however, President Paul Kagame helped rebuild the economy and their political structure. Poverty decreased from 57 per cent in 2003 to 39 per cent by 2014 during the era of rapid growth starting in the early 2000s.
The economy has experienced steady growth since the early 2000s, thanks to Kagame ‘s leadership. During this time the private business sector also saw changes. Rwanda was ranked 29 in the list of easiest places to do business in 2019 by the World Bank Doing Business ranking. Rwanda was the only low-income nation to place ahead of France, Russia and Spain in the top 30.
The Rwandan Development Board (RDB) established in 2009 to control business regulations, promotion of tourism, foreign investments, and economic growth and planning. In 2018 the RDB oversaw investments in excess of $2 billion. This included 173 investment ventures in the mining, forestry, and manufacturing sectors. GDP per capita, which represents the standard of living in a region, more than doubled after Rwanda focused on business improvement. Pro-capita GDP increased from $353 in 2006, to $772 in 2018. Although GDP per capita is small, the plans put in place to raise living standards and further grow the economy may see an even more drastic change in the coming years.
Rwanda is currently developing many sectors in an attempt to diversify; however, manufacturing accounts for a small portion of GDP in the country. Manufacturing is one way a country can become self-sufficient, boost jobs and increase its revenue from exports. In 2015 Rwanda created the Made-in-Rwanda campaign to develop the manufacturing sector. This policy has had a positive impact on its trade deficit. Export sales went up from $559 million in 2015 to nearly $996 million in 2018. The initiative called Made-in-Rwanda helps local citizens to sell goods around the world. Some of the main export countries are the U.S., Europe and the Middle East. As agriculture employs more than 70 per cent of Rwandans, Made-in-Rwanda benefits many locals.
New development strategy for Rwanda, Vision 2050, sets soaring goals. The new priorities include “reaching the upper-middle – income status by 2035 and high-income by 2050” in Rwanda. The plan also focuses on five pillars:
- Quality of life,
- Modern infrastructure and livelihoods,
- Values for Vision 2050,
- Transformation for prosperity and
- International cooperation and positioning
Former Minister of Foreign Affairs and Cooperation Louise Mushikiwabo said Rwanda has a lot of work to do to achieve Vision 2050, but she is proud of the successes that have been made so far. While the high growth of Rwanda has affected many parts of the country, its poverty remains around 39%. With additional programs focused on Rwanda’s goal of adding new jobs and growth to its growing population, the rate of poverty could continue to fall.
