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Economy – a new Rwanda is emerging

In 20 years, Rwanda has achieved remarkable progress on the economic and social fronts, partly because it made good use of substantial foreign assistance.

Even some opposition leaders admit that 20 years after the genocide, Rwanda achieved undeniable progress on the economic and social fronts. When the Rwandan Patriotic Front took over Kigali on the 4 July 1994, most public administration buildings were destroyed and dogs had to be shot because they were tremendously dangerous as they had become used to eat human flesh. At the door of the country, around the Congolese city of Goma, there were 2 million refugees. Most have returned home. In 1994, 600,000 orphans, 60,000 widows and hundreds of thousands disabled persons were identified within the national borders.Such huge handicap justified an important foreign assistance which still accounts for 40 percent of the national budget as against 52.5 percent in 2004.

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Altogether, the use of foreign aid has rather been successful. Since 2005, the Rwandan GDP has been growing at 8 percent per annum in average. In 2012, the rate was 7.7 percent and was expected to remain above 7 percent in 2014, according to the African Development Bank (AfDB). The growth of agriculture which employs 73 percent of the workforce has been more modest, of around 3 percent, partly because of lesser rainfalls on that war. However, the quality of the main cashcrop, coffee, is improving and output increased by 25 percent in 2012.
Rwandaís efforts are now focussing in value addition and in 2013, already ten percent of the production is roasted in the country. Rwandaís coffee, a first class arabica, is rated among the best by the Coffee Cup of Excellence and the best qualities are marketed by Starbucks and Marks & Spencer. More investments in improved seeds, fertilizers and equipments may help to increase yields and productivity in the sector, according to the AfDB.

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Even if the smuggle of Congolese minerals has made it difficult in the past to distinguish between the domestic production and re-exported tin, cassiterite, columbo-tantalite and gold, Rwanda has managed to develop its own production base. In the future, the minerals traceability and certification mechanisms set by the International Conference on the Greats Lake Region should allow all its member states including Rwanda to prove the non-conflictual origin of their exports. The sector is booming with a 10 percent annual growth and accounts for the third of all export revenues. And the government plans to treble these revenues up to US $ 400 million in 2017, thanks to recent investments in exploration and resources mapping both by the government and Canadian gold mining corporations.

The processing of minerals and the industry at large are growing at a annual rate of 6 percent but the textile and agrofood industries are growing faster (9 percent in 2012) and services even faster (14 percent), owing to the development of bank, insurance and tourism sub-sectors. In 2012, tourism generated more export revenue than minerals, tea and coffee with US $ 281 m. The expansion of tourism is a dividend of the security and business climate. Rwanda is rated as the worldís second fastest reformer in the last World Bank ìdoing business reportî and the second easiest place to do business in Africa, just after Mauritius.

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Rwandaís ambition is to become the hub of the region. To that effect, nearly a quarter of the budget goes to infrastructures. A 2,300 km optic fiber telecommunications network was completed in 2012 and is boosting access to broadband services and 70 percent of the people have access to a mobile phone. The information technologies budget of 1.6 percent and compares in proportion with that of the European Union. Rwanda has been and remains a pilot-country for Microsoft expansion strategy in Africa. It equipped 400 schools with computers and develops free Wifi access in Kigali. One of the priorities of the Vision 2020 strategy is the improved of electricity access which is expected to rise from 6 percent in 2008 to 70 percent in 2017 and has already reached 16 percent in 2012. In order to achieve it, the Energy Water and Sanitation Authority has plans to increase the generation capacity from 110 to 563 megawatts by 2017, combining power from peat, methane gas, hydropower, solar energy and hopefully geothermal power. The new international Bugesera aiport is expected to be inaugurated by 2017.

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The business climate is also influenced by the countryís low corruption level. According to the rating established by Transparency International, Rwanda ranks fourth in Africa in the list of the least corrupt countries after Botswana, Cape Verde and Mauritius. That has helped the country to attract US $ 159 million of foreign direct investments in 2012 which went to banks, energy, tourism, agro-business and construction sectors. Rwandan expatriates whose remittances grew from US$ 25 to 172 million between 2006 and 2012 have also plaid a significant role in Rwandaís economic success, which has been also a success in terms of sustainable development. Within the last 20 years, the surface of forest areas has grown by 37 percent.

The Rwandan economy has its weaknesses of course. One of the main is the structural trade unbalance with exports accounting only for a quarter of imports. Yet, all donors recognize Rwandaís efforts to meet the Millenium Development Goals. In 2012, Health accounted for 18 percent of budget expenditures. Mortality of under five years old children decrease from 103 to 54 per 100,000 between 2008 and 2011. Rwanda has managed to reduce by half HIV-Aids prevalence to 3 percent of the 15-49 years old people between 2002 and 2012. Three quarters of the population has access to drink water and 98 percent of the Rwandans have access to health insurance, notes the New York Times which calls it a ´†success story†ª.

Similar records are achieved in education (15.5 percent of the budget in 2012). Primary school enrolment was 91.7 in 2011 as against 86.6 percent in 2006 whereas the literacy rate of the 15-24 years old was 83.7 percent in 2011 as against 76.8 percent in 2006. The Kigali Institute of Science and Technology provides Rwanda with an excellence platform which is recognized all over Africa. The proportion of the population under the poverty line has decreased substantially from 78 to 45 percent between 1994 and 2012 of the total but much remains to be done. Finally, one of Rwandaís main achievements has been the recognition without women the battle for development cannot be won. That is true anywhere but even more in Rwanda. The country had no choice since one of the consequences of the genocide is that more men were killed. This imbalance was reflected in the elections register in 2008 which showed that women represented 55 percent of the voters. And the governmentís policy has been to promote aggressively the women. As a consequence, Rwanda finds itself in pole position worldwide. The national assembly has 64 percent female members with 51 out of the 80 seats. Fourty seven percent of the government minister are ministers and women account for 38 percent of the senators. There are also 52 percent girls in the secondary school. The country may have an authoritarian regime but a new Rwanda is emerging.

(F.M.)

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