A look at Rwanda’s staggering journey to becoming a global economic superpower

Face 2 Face Africa, by Oluwabusola Fadipe

The continuous rise of Rwanda’s economic profile can be likened to the ancient mythical bird, phoenix, which regenerates and starts another life cycle from its ashes.

The 1994 genocide left the country deeply scathed and experiencing economic setbacks as a result of heavy security efforts. Therefore, it has become an inspiration to see this African country rise from ashes to become the envy of other countries on the continent.

It is highly essential to trace Rwanda’s evolution in growing an industrial and sustainable economy and the prospects of moving to become a first world country.

First world countries are characterized by economic stability and high standard of living. They are known for industrialization with high gross domestic product (GDP). Some of the countries belonging to this group are Australia, Canada, United States, United Kingdom and other Western European countries.

Third world countries, on the other hand, are low-income countries plagued with high poverty levels and low standard of living with most people living in slums below $1 per day.

For many decades, sub-Saharan Africa, Asia and Latin America largely belonged to the third world grouping before the Asian tigers laid a foundation to become a front-liner in economic development.

Countries such as Japan, Singapore and China started industrialization by moving from a purely agrarian society to adopting technology into their processes. Singapore under Lee Kuan Yew was known for developing and exporting technological finished products to different parts of the world. These examples served as inspiration for Rwanda.

Rwanda is rising so fast and competing aggressively with advanced economies.

According to World Economic Forum, it has the fastest growing economy in Africa with annual GDP growth of 8%. In addition to this, the percentage of people living below poverty line has declined by about 12% since 2005; and average literacy level and life expectancy have improved as well. Some of the major reasons for Rwanda’s economic growth include industrialization, diversification and commercialization.

The Rwandan economy is thriving on technology and innovation. The government has encouraged and invested in industrial activities by encouraging setting up of new industries by innovators and disruptors.

In the same vein, the government has created an avenue for local businesses to flourish while ensuring an enabling environment for foreign businesses to operate as well. Many of these businesses provide revenue base for the government.

A good example was when MTN was keen on entering the Rwandan market in 1998, the government decided to buy a 20% stake in the company. This was driven by an ambition to not only attract the firm to operate in the country but to ensure citizens will have access to affordable telecom services. The government has been able to leverage such investments for the public good.

Another factor responsible for Rwanda’s rise as an economic figure in Africa is diversification. Most African countries depend solely on natural resources as their only economic base, especially oil-producing countries thus, export is the major source of their revenue.

Rwanda, on the other hand, made efforts to ensure multiple revenue streams vis-à-vis agriculture, small scale enterprises and large industries.

Also, the government has equally made strides to fund tourism as another revenue point for the state, a strategy to ensure Rwanda becomes the destination for African Business meetings, expos, exhibitions and summits and a hub for African start-ups and entrepreneurs as well.

Again, the country has enjoyed political stability, a key factor for socio-economic development for the longest period of time under Paul Kagame.

President Kagame, a visionary, has made reforms in the public sector. As a result of his leadership, the government has shown zero tolerance for corruption within the public service and reduced external dependencies on loans and aids. A recent report by Transparency International ranked Rwanda as the third least corrupt country in Africa.

World Bank’s CEO, Kristalina Georgieva, on a visit to the country in 2018 also asserted to the fact that ‘the country has reduced reliance on donations and currently, domestically funds about 84% of the budget.’

These reforms also include closing gender gap; as of today, there are about 64% females in the parliament compared to the average 22% across the globe which ranks Rwanda higher in gender equality than many so-called advanced democracies and industrialized countries with more women in Rwanda economically and politically empowered.

In short, there are valid lessons to learn from Rwanda’s evolution as a promising economic power beyond the shores of Africa. The East African country has put in place measures that promote further growth thereby portraying to the world supporting SMEs, encouraging industrial activities, revamping the public sector to purge corruption and inefficiency, promoting gender inclusion and leading a tech-driven economy is germane for economic development.

The presence of all of these factors poses Rwanda to become a premier first world country in Africa. However, this hope may crumble in the absence of Kagame in politics whether on account of death or end of tenure.

Source Face 2 Face Africa