SEATTLE, Washington — The Rwandan economy grew an average of 7% from 2010 to 2018 partly through development in key areas such as manufacturing, agriculture, education, health, tourism and ICT. Rwanda’s high growth rate makes this African country one of the fastest-growing countries in the world.
Rwanda’s accomplishment of the objectives laid out in Vision 2020 is part of the reason for its high growth. The country’s government created Vision 2020 intending to become a middle-income country by 2020, yet postponed this goal to 2035. Development progress remains widespread, though. Through infrastructure and service sector investments, Rwanda took one million of its citizens out of poverty between 2005 and 2011. Rwanda’s success story continues thanks to the governmental focus on improving living standards while also investing in the private sector.
Reasons for Rwanda’s High Growth
Rwanda’s high growth resulted when the government turned around its economy after the 1994 genocide. The genocide destroyed the country and made Rwandan country-dwellers’ lives difficult. However, President Paul Kagame helped rebuild the economy and its political structure after the genocide. During the period of high growth starting in the early 2000s, poverty declined from 57% in 2003 to 39% by 2014.
Through Kagame’s leadership, the economy experienced steady growth since the early 2000s. The private business sector also saw improvement during this period. In 2019, the World Bank Doing Business index ranked Rwanda as 29 in the list of easiest places to do business. Rwanda was the only low-income country to rank in the top 30, ranking above France, Russia and Spain.
In 2009, the Rwandan Development Board (RDB) formed to control business regulations, tourism promotion, foreign investments and economic development and planning. In 2018, the RDB oversaw more than $2 billion in investments. This included 173 investment projects in sectors such as mining, agriculture and manufacturing. GDP per capita, which reflects a country’s standard of living, more than doubled after Rwanda focused on improving businesses. GDP per capita grew from $353 in 2006 to $772 in 2018. Although GDP per capita is low, the plans set in place to improve the standard of living and develop the economy further could see an even more dramatic difference in the years to come.
Currently, Rwanda is developing many sectors in an attempt to diversify; however, manufacturing represents a small portion of the country’s GDP. Manufacturing is one way for a country to become self-sufficient, boost jobs and increase its export revenue. To develop the manufacturing sector, Rwanda created the Made-in-Rwanda campaign in 2015. This initiative made a positive impact on its trade deficit. Export revenue increased from $559 million in 2015 to almost $996 million in 2018. The Made-in-Rwanda campaign encourages locals to export products around the world. The U.S., Europe and the Middle East are some of the main export countries. As agriculture employs more than 70% of Rwandans, many locals benefit from Made-in-Rwanda.
Plans for the Future
Rwanda’s new development plan, Vision 2050, sets soaring goals. The new objectives involve Rwanda “reaching upper-middle-income status by 2035 and high-income by 2050.” 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 stated that Rwanda has a lot of work ahead to reach Vision 2050, but she is proud of the achievements made so far. Although Rwanda’s high growth impacted many areas of the country, its poverty remains around 39%. With further programs focused on Rwanda’s objective of adding new jobs and growth to its growing population, the poverty rate could continue to decline.
– Lucas Schmidt