Feature

Rwanda means business

A country proving doubters wrong, winning plaudits, and planning big – Joseph Bugabo introduces one of Africa’s success stories.

Interview with His Excellency Paul Kagame, President of the Republic of Rwanda.

Paul Kagame was born in 1957. His family fled preindependence ethnic persecution in 1960, crossing into Uganda, where Kagame spent thirty years. His military career started in 1979, when he joined Yoweri Museveni’s National Resistance Army. In 1986, Kagame was instrumental in forming the Rwandan Patriotic Front (RPF). In 1990, he returned to Rwanda to lead the RPF’s army, whose victory over the incumbent government in July 1994 effectively ended the Rwandan genocide. In 2000, he was elected President by the Transitional National Assembly. On 12 September 2003, following the country’s first democratically-contested, multi-party elections, he was sworn in as President for a seven-year term.

 

During a recent visit, the World Bank’s Penelope Brook observed, “What is remarkable to everyone who comes here, is that in a relatively short time Rwanda has taken itself from one of the most painful places a country can be, to become a country that is a leader and a model for other countries at different levels of development, and for those struggling to come out of conflict.”

Fifteen years since the genocide, when more than 800,000 people were killed in just 100 days, Rwanda is moving on, and moving up. Peace and political stability have been established, reconciliation efforts are continuing, and democratic institutions and processes are being strengthened.

While over half the population still lives below the poverty-line, and although health indicators remain poor, the situation is improving. The tiny central African nation, with a population of 9.7 million people, is on track to meet three of the Millennium Development Goals – those relating to universal primary education, gender equality, and HIV/AIDS and malaria.

At the same time, an economy shattered by the events of the early 1990s has successfully been rebuilt. Growth rates have averaged 5-6% over the last decade, hitting a high of 11.2% in 2008. The global economic downturn will temper growth in 2009, as foreign investment, remittances from abroad, and demand for exports, all slow. Even so, the finance ministry forecasts a respectable 5.5% growth rate.

Subsistence agriculture has traditionally been the mainstay of Rwanda’s economy, and the main exports are coffee and tea. Today, agriculture still accounts for around 40% of GDP and employs some 80% of the labour force. To a large extent, the country’s economic revival has been based on improved agricultural output, but the other main driver of growth has been a mushrooming services sector. Since 1994, this sector has grown faster than the overall economy, and now contributes over 40% of GDP. The major activity is telecommunications, although transport and tourism also play important roles. The manufacturing sector – dominated by food processing – contributes about 20% of GDP.

With stability and economic growth restored, the authorities are now embarked on an ambitious development plan that aims to transform the country. The Vision 2020 project envisages that by the year 2020 Rwanda will become a lower middle income country (per capita income over US$976) operating as a knowledge-based service hub. Industry minister Monique Nsanzabaganwa, points to possibilities in the fields of ICT, banking, pharmaceuticals, and tourism. “I see a bit of Switzerland, a bit of Singapore, and probably Mauritius,” she said when asked which industrial policy model the government is following. “All those are models, but we try to copy whatever is best from whoever can provide it.”

This transformation will be partly achieved by taking advantage of Rwanda’s geographical location. The authorities are promoting the use of French and English, as well as the indigenous language Kinyarwanda, so that Rwandans can serve both the English-speaking East, and the French-speaking Central Africa. “We are the gateway to Central Africa”, says finance minister James Musoni. Officials are fond of the catchphrase about Rwanda being ‘land-linked’, rather than ‘land-locked’.

With investments growing from US$28m in 2000 to over US$2.8bn in 2008, and with the country’s ranking in the World Bank’s Doing Business Report improving from 143rd in 2008 to 67th in 2009, Rwandans are confident that things can only get better.

I believe my country is bound for greater heights. There is still much to be done – but that means there are plenty of opportunities! Rwanda is not counting on luck. We are dealing with the past, and creating the future.

Joseph Bugabo is the weekend editor of the Rwandan daily newspaper,
The New Times.

 

People-centred leadership

Interview with His Excellency Paul Kagame, President of the Republic of Rwanda

 

Looking back, how has Rwanda succeeded in moving out of its crisis so quickly?
Rwanda’s problems have been unique, with deep social divisions exacerbated by colonialism and particularly poor post-independence leadership. As a result, the solutions to these problems also had to be unique. Rwanda’s post-genocide leadership guaranteed the right of every Rwandan to live in their country in peace. We designed the Gacaca courts system, based on our traditional judicial practices, in order to meet the overwhelming need for justice, as well as reconciliation. Through this system of participation, Rwandans have ownership of the healing process, whether victims or perpetrators.

Rwanda has recovered relatively quickly mainly due to focused, people-centred leadership, and the use of sound policies and strategies for economic and social development. Our goals are well-defined by processes – such as Vision 2020 and the Economic Development and Poverty Reduction Strategy – which unite institutions in providing objectives and targets. This has taken place against a backdrop of security and stability that has provided the conditions for unity and democratization, which, in turn, allow people to participate in development programmes and activities aimed at improving their lives.

Decentralization has been another factor in Rwanda’s recovery – empowering citizens to make decisions and plans for their own socio-economic development. Central government respects the knowledge and capacities of citizens at the grassroots, because they understand their challenges and priorities best, and are therefore best-placed to devise the required solutions.

What are the biggest challenges that need to be overcome?
We realize that achieving our vision of becoming a middle income country by 2020 is not simply a matter of numbers and accounting. It will mean that Rwandan people are healthy, skilled and in employment, and adequately housed. This requires significant investment in social facilities and job-creation. Rwanda will need to move to higher capacity and value addition in our productive sectors, and revamp existing industries to meet the quality and quantity of production that national, regional, and international markets demand.

The key is significant investment in infrastructure, productive capacity, and people. We look to empowering the private sector with the skills, infrastructure, and management capacity to enable it to flourish. We are encouraging the private sector to invest in innovative and profitable fields such as ICT, pharmaceuticals, and other manufacturing sectors for growth. As the government, we also need to provide research and development capabilities through public-private partnership, and collaboration with educational and research institutions in Rwanda and beyond.

Achieving these goals will require solutions originating from Rwandans themselves. Our objective is to equip citizens with the requisite skills and the required business environment, so they can provide the innovation required to move us forward and make Rwanda competitive.

What do you see as key strategies and policy thrust for making your country develop a competitive economy and participate effectively in global trade?
Rwanda is an open economy, both regionally in terms of trade blocs such as COMESA and the East African Community (EAC), and in its dealings internationally, through the AGOA and the EPA with the United States and the European Union, respectively. As a result, tariff barriers have been significantly reduced over the past few years, making our markets more open to trade than ever before. The motivation of this openness is ultimately to drive investment and growth.

Investment is the key to developing our industrial and service sectors. Rwanda’s policies are focused towards value addition – both of our existing exports, and of our domestic industries and services.

Rwanda currently has a small industrial base. This is a disadvantage in that it will take time to develop competitive firms. However, it is also an advantage, since we can bypass obsolete technologies and move to the frontier of industries with a technological and competitive edge. Rwanda’s private sector must take the lead to move into new sectors, adopt new technologies, and reach quality standards that will allow it to compete regionally and internationally.

The international private sector is a key partner in enhancing the capacity of our domestic firms. International firms can provide not only investment in capital, but also the expertise acquired over years. The Government of Rwanda is committed to improving the policy environment so as to attract these firms to Rwanda, either as individual entities or in joint ventures.

We also need to harness the capacities of international organizations such as UNIDO, UNDP, the World Bank, the European Union, and others, to support technological upgrading and the capacity to access international and regional markets. These organizations should be aware of our limitations, but also of our capacities and priorities. We are aiming for true partnerships with those organizations, focusing on our national priorities and objectives.

Rwanda is a member of the EAC, which has a common external tariff, and is now moving towards a common market. The EAC has a population of over 120 million people. Membership of the EAC is therefore an unprecedented opportunity for our private sector firms – in agriculture, services, and industry – to meet the demands of a larger market.

At the same time, the EAC brings new challenges to our private sector. They must compete with established regional players, many of whom are already advanced in their production methods and capacities. We are determined to learn quickly, and orient ourselves strategically, in order to become competitive and to benefit from the larger regional market.

Worker at the Bralirwa soft drink production and bottling plant in the capital, Kigali. Brasseries et Limonaderies Du Rwanda (BRALIRWA) is Rwanda’s biggest manufacturing concern. In May 2009, the company inaugurated a new wastewater treatment plant that will enable the re-use of water used to clean bottles and permit sludge created during the production process to be used as agricultural fertilizer. Photo: Rwanda Information and Communication Solutions.

 

What is your government’s strategy to reach or maintain environmental sustainability without hampering the necessary economic growth for achieving your vision of mid-term prosperity?
The protection of our environment is a priority for the Government of Rwanda. We are well aware of the detrimental impact of erosion and deforestation, and work from the premise that environmental sustainability is a precondition for sustainable economic growth – whether in terms of agricultural yields or protecting our valuable flora and fauna.

Rwanda’s national parks and other natural attractions are the cornerstone of our tourism industry – ensuring the protection of these areas is crucial to the long-term sustainability of the sector. Our policies and strategies therefore emphasise community involvement in tourism, ensuring that local people benefit from tourist revenue.

Where there are conflicts between the environment and growth, for instance, in the case of polluting industries, we will provide mitigation and technological solutions to avoid unnecessary contamination. In order to ensure that industrial growth does not encroach on the environment, we are promoting cleaner production methods to industrial firms. The Rwanda Environment Management Agency provides oversight of industrial development to ensure that where there are developments, there are also impact assessments and mitigation strategies.

Furthermore, industrial zones, to be created over the medium-term, will group industries in geographical locations where the necessary infrastructure to treat industrial waste will be provided, so that contamination and pollution do not take place.

Could you give a short description of Rwanda’s current state and short-term prospects?
Rwanda has come a long, long way since the genocide of 1994. Political stability, democracy, security, unity, and reconciliation have provided the foundation for growth, and a reopening to the rest of the world. However, Rwanda is now at the beginning of its next journey – the journey to sustainable economic development.

The Government of Rwanda is working to transform the lives of our people. Health indicators have improved significantly over the past few years due to health insurance schemes and better provision of basic services, as well as advocacy for malaria- and HIV-prevention, among other areas. Education outcomes have also improved; through the Education For All programme enrolment has increased at primary, secondary, and tertiary levels.

For the growth of the private sector, a number of policy preconditions are now in place. Rwanda is significantly improving its business climate, as recognized by the World Bank Doing Business rankings. Tariff barriers are being reduced, as well as the bureaucracy faced by traders and international investors.

Rwanda seeks to become a knowledge-based economy, providing our people with the necessary ICT skills and infrastructure required to compete in the regional and global economies. We are also working to move up the value chain in agricultural, industrial, and services sectors. In agriculture, sustainable land use, combined with improved seeds and fertilizer application, is contributing to food security and the growth of our export crops. In industry, manufacturing needs to be promoted in agro-processing for our agricultural produce, as well as in modern, hi-tech sectors. In services, Rwanda aims to be an innovator in areas such as ICT, telecommunications, and banking.

The ultimate goal of all of this is to improve the lives of Rwandan people, fight poverty, and create prosperity for all – with the understanding that Rwandans have it within themselves to achieve these goals.

Interview by Kazuki Kitaoka, UNIDO

 

December 6th, 2009 at 00:20 0 Comments »

 

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