Rwanda has emerged as one of the fastest growing economies in less than two decades; an extraordinary feat since its genocide in the 1990s where an estimated two million people died in the civil war against Tutsi refugees.
By Viraj Desai
Rwanda is entering a growth phase under the stewardship of Rwandan President Kagame, emerging as one of the fastest developing countries across all sectors in Central Africa. It has clocked a GDP growth of around 8 percent per year between 2001 to 2015.
Its Healthcare sector has steadily improved and citizens now have access to a national health insurance plan, making healthcare services, including cancer diagnosis, more affordable for lower-income citizens; the Rwandan healthcare sector is founded on the ‘precision medicine’ model in delivering patient care. Rwanda’s 11.8 million citizens now have access to eye care and vision treatment – the first developing country in Central Africa that provides affordable eye care to citizens.
The construction, mining and energy sectors in Rwanda received the highest Foreign Direct Investment in 2017, while most jobs were committed in the agricultural, energy and manufacturing sectors.
Some of the key transformative investments in 2017 include: USD35 million dry port in its capital Kigali, USD400 million investment for Bugasera airport, south of Kigali; USD25 million in upgrading King Faisal Hospital infrastructure; USD23 million by Unilever Tea Estate over five years and USD12 million by PRG Plc towards the first titanium refinery, now entering its first phase of construction.
Some of the biggest investments by countries include: USD 400 million from Portugal, USD 203 million from the UK, USD83 billion from India and almost USD81 billion by the UAE. Germany and China also invested over USD 60 billion during the same period.
Kigali, Rwanda’s capital, is the most densely populated city with over 1,500 people per sqm while the country is the most densely populated in Africa with over 400 persons per sqm. This has led to the Ministry of Infrastructure developing secondary cities and spearheading a hierarchical network of urban centres, providing services and attracting economic activities nationwide.
In education, the recent foray of Chinese multinational conglomerate Alibaba launched its Global E-commerce Talent (GET) program for university teachers in Rwanda; the first of its kind in Africa. This investment indicates that Rwanda is on the radar of ecommerce companies looking for opportunities in this growing region.
In the tech industry, Rwanda is fast joining the ‘fourth revolution’ with drones now supplying blood to rural hospitals, the medical company Babyl providing online consultation to qualified doctors and a fintech company Blockbonds, allows smartphone users to pay for services and goods using blockchain technology.
Due to increasing FDI in Rwanda, the knock-on effect has led to higher tourist inflows and it is projected that the country will double its tourism earnings in the next decade through sustainable wildlife conservation. In 2017, the Tourism sector generated over USD 438 million and the Rwandan Government is hoping to cash in on tourism receipts up to 800 million dollars by 2024. Gorillas contribute about 90 percent of the revenues from Rwanda’s national parks. The population of mountain gorillas, one of the world’s most endangered species, increased by 25 percent from 480 in 2010 to 604 in 2016.
The impressive growth has led Israeli officials to advocate for Rwanda to join the 36-member club of the world’s most developed economies, the Organization for Economic Cooperation and Development (OECD). To-date, there is no member African nation that is part of the OECD.
There are however, detractors to the Rwandan Government’s position, with some academics questioning the validity of the data released in the National Institute of Statistics of Rwanda (NISR). According to the Review of African Political Economy (ROAPE), there appears to be discrepancies in Rwanda’s GDP growth figures.
ROAPE argues that while progress since the war is indisputable, it claims that most of the improvements in Rwanda’s capital city, Kigali, are largely “cosmetic and driven by the government’s obsession to portray an image of success rather than to lay the foundations of lasting economic growth… much of the investments have been financed with public debt, leading to a surge in external debt levels”.
Despite the controversy surrounding the data, it is interesting to note that the global rating agency Standard and Poor, rated Rwanda B/B for short and long-term, which may attract further interest from foreign investors in the next few years.