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Rwanda: An Underrated Emerging Economy

From Conflict to Development

Rwanda: An Underrated Emerging Economy

Rwanda has not only exhibited miraculous economic growth since its tragic genocide but also showcases a story of familial recovery. The road map that the government of Rwanda has drawn out for itself is community-inclusive. Thus the development seen in this once ill-fated country is accountable just as much to its people as it is to the government running it.

A service based economy, it delivers with efficiency, using flexible methods and maintaining its authenticity with home-grown solutions. The Government’s strategy cultivates a sense of togetherness amidst Rwanda’s citizens.

Rwanda: Championing Energy and Technology

Rwanda is a foreign aid-dependent country with a total obligated relief of up to $156m flowing from the United States. Every dollar invested in Rwanda has been used in developing its information, communication and technology sector, and the renewable energy sector.

59% of Rwanda’s generation capacity comes from hydropower

Rwanda withholds immense potential in solar and hydroelectric power. The Africa-EU Renewable Energy Cooperation Programme (RECP) states in their findings that hydropower supplies around 59% of current electricity generation capacity at 59.43MV, and has the capability to achieve over 300MV. Scoring renewable energy has been a tough road because 23% of total power gets wasted in transmission.

With regards to the ICT sector, Rwanda’s President Paul Kagame has not held back. Rural children are now bred to computer literacy, and tourists in Rwanda have access to the highest level of mobile internet, 4G.  These digitally transforming changes have taken place amidst an economic scenario in which individuals earn as low as $696 a year (according to UN data). This is largely because Rwanda’s economy is still about 90% agriculture-based.

Internet access has led to a degree of connectivity that helps potential investors look past a landlocked piece of land and the increased cost of doing business there as a result of its lack of sea access.

Open For Business

The key element that differentiates Rwanda from its closest equivalents in Africa is the ease of doing business there, and an improving corruption situation. The procedure to starting up a business in Rwanda is favourable both legally and when considering administrative work. A new business can be formally registered in less than a day.

It has been argued, that this policy could lead to illegitimate businesses being set up. But Rwanda is Africa’s third least corrupted country – Kagame’s administration operates with zero tolerance on any shady dealings between politicians and businesses.

8% Rwanda’s average growth in the decade up to 2015

Poverty may be overshadowing its colossal growth, but Rwanda’s vision for the future has not proved to be far-fetched on any grounds, with improvements transpiring every forthcoming year. According to the World Bankreal GDP growth averaged roughly 8% pear year for over a decade in the run-up to 2015.

Apart from pure GDP, socio-economic matters have been dealt with as well. About 64% of Rwanda’s MPs are women, one of the many steps taken by the government to diminish gender parity.

An Overlooked African Tiger

When discussing ideal emerging markets in Africa, the most popular tend to be South Africa, Ghana and Morocco. The fact that Rwanda rarely features in spite of all these successes merits describing it as ‘underrated’. This is not to demean the incredible progress achieved by the aforementioned countries, but rather to illustrate how Rwanda needs to be acknowledged more often on the grounds of it being a notable emerging market.

Burundi, for example – Rwanda’s neighbour – as been an example of anything but. Burundi suffers poor leadership, continued political instability economic instability; everything Rwanda has defied. Over the last three years, Burundi has seen growth of about 3.4% on average, whereas Rwanda’s reached 6.5%.

With hard facts supporting its own case, Rwanda has achieved the impossible, going from a genocide-struck war zone to a land of ever-growing development. Dismissed because of its lack of infrastructure and electricity availability, most private investors still fail to see a priceless driving force in Rwanda. With innovation bubbling within its core, this emerging African tiger doesn’t have to be the Singapore of Africa, but rather an example of its own.

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