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World News /04 Dec 2013
12.04.13

Rwanda’s Development Drive

For many Rwanda is synonymous with genocide. However, since the inter-ethnic conflict has ended, President Paul Kagame’s government is focused on revolutionizing Rwanda’s public image and converting the nation into the economic powerhouse of East Africa. After coming into office in 2000, Kagame outlined his primary economic objectives: privatize state-owned industries, reduce financial regulation for businesses and transform Rwanda from an agricultural economy to a knowledge-based economy. What is helping to achieve these objectives is the government’s wide-ranging advisory support from institutions such as the Singapore Economic Development Board, the Clinton Foundation and the African Development Bank.

In terms of infrastructure development, Rwanda ranks 96th out of the 144 countries surveyed in the Global Competitive Index. This is due to major transport deficits which impede national and regional connectivity and contribute to the high costs of doing business. In response, the government has instituted the National Transport Sector Policy which provides the implementation framework for transport development.

Among the envisaged projects is an ambitious transnational railway line which will link the Rwandan capital, Kigali, with the Kenyan port city of Mombasa. Since the Rwandan section costs an estimated $1.5 billion the railway line will rebate its cost by creating a cheaper and more efficient trade route for Rwanda to export its agricultural products and mineral wealth to international markets.

More importantly, the railway line is expected to reduce the cost of importing machinery and construction material – both of which are imperative in the development of Rwanda’s infrastructure.

Like most countries in the Great Lakes region, Rwanda’s greatest source of short-term revenue is its abundance of minerals. However, following the global recession in 2009-10, mineral exports have declined by 40%. As a means of countering this, the government has made concerted efforts to improve the legality of the mineral industry, in particular by the distributing mineral export certificates which help to distinguish government-certified minerals from ‘conflict minerals.’ Subsequently, this has made the mineral industry in Rwanda far more attractive to developed countries who have previously come under criticism for fueling conflict and corruption through the purchase of blood diamonds. The success of this certification mechanism was apparent in 2012 when revenue from the mineral industry accounted for 28.8% of total export earnings.

In order to ensure that growth in the mineral industry is sustained, education is a key priority of the government, as seen by the creation of a mining and geology department at the Rwandan National University. However, it is important to note that skills developed in Rwanda are not merely centralized around the mining sector, but extend to all other industries. For example, with 73% of the workforce employed in the agricultural sector, the need for technical and industrial education could not be greater. Consequently, in cooperation with the German state government of Rhineland, attempts have been made to provide vocational and workforce training as a means of increasing self-employment.

Furthermore, Carnegie Mellon has become the first American research university to offer graduate degrees to students in Africa, with the inauguration of the Carnegie Mellon University in Rwanda (CMU-R). The success of CMU-R can be seen through the accomplishments of their graduates, as many have gained internships at multinational corporations like Microsoft, IBM, and Visa. Initiatives such as these are all part of the government’s vision of creating a ‘culture of innovation’ and firmly placing Rwanda within the realm of newly industrialized countries.

Similar to most developing African nations, Rwanda is not oblivious to the influence of China. As Kagame writes in The Guardian, “Africa must attract broad investment, not rely on handouts, if we are to sustain development,” which makes the expansion of bilateral relations between China and Rwanda seem inevitable. Interestingly, the growth in this relationship is of the West’s own doing, as recent aid cuts to Rwanda from the United Kingdom and the United States have meant that China, through the provision of interest-free loans and grants, has gained the upper hand in Rwanda. The importance of maintaining cordial relations with Rwanda cannot be underestimated, as Rwanda is the only politically stable nation that exerts influence over the Democratic Republic of Congo (DRC) – a country that is estimated to have $24 trillion worth of untapped mineral deposits and, according to the UN, the potential to power all of Africa through hydroelectricity produced from its extensive river system. It is this overriding influence in the DRC that has caused Rwanda to face international criticism from many Western nations who accuse Kagame of funding Tutsi rebels in the conflict-ridden Congo.

It is clear that Rwanda, from a socio-economic perspective, faces many challenges along its path to becoming a middle-income nation. This is exemplified by the fact that currently Rwanda is one of the least urbanized countries in Africa with only 19% of the population living in urban areas. This is not the only the problem faced by Rwanda as a shortage in arable land for its growing population and large dependency on foreign aid, which constitutes 40% of the national budget, prove to be considerable headaches for the government. However, with strong political leadership, the people of Rwanda can expect to see the riches of Kagame’s reforms come into fruition in the forthcoming years. Most importantly, Rwanda has set a benchmark, in terms of developmental initiatives which other African nations can strive to achieve.

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