Rwanda has laid out some bold ambitions. Nearly 20 years after the Rwandan Genocide, the country has now set its sights on becoming the “Singapore” of Africa by developing itself as Africa’s high-tech information technology hub. Is Rwanda’s government serious about achieving its ambitious goals or is this merely hot air to gain local and international support?
For many Westerners the notion of Singapore might draw up images of a strict society where kids can be canned for petty vandalism and chewing gum is outlawed. Among developing nations, however, Singapore is highly regarded for having risen from poverty and developed into one of the richest nations in the world.
While many people now claim this occurred merely because Singapore is a small city-state, most observers at the time of Singapore’s independence figured the country would be a “basket case” due to its tiny domestic market, poor levels of education, and reliance on British handouts. The government also had to manage delicate race relations, tensions with Malaysia, and a communist insurgency. Needless to say, the cards were stacked against the Singaporean government. Singapore is now one of the richest nations in the world and is believed to be sitting on over 500 billion dollars in its sovereign wealth funds.
Rwanda now hopes to emulate this success by creating an attractive investment environment, reducing corruption, and building the infrastructure necessary for a high-tech economy. Roads and basic infrastructure are being rapidly upgraded, a 300 million dollar conference center is in the works, as is a new airport, and major hotel chains are now starting to invest in the country. While Rwanda has a long way to go with a GDP of only 700 dollars (nominal), the economy is showing signs of growth.
Rwanda’s Economy Growing
Since 2005 Rwanda’s economy has regularly grown in excess of 7 percent per year. Even in 2009, during the Financial Crisis, the country still achieved a respectable growth rate of 6.2 percent. The country grew at a healthy 7.7 percent in 2012, though admittedly the country is still dependent on foreign aid. Still, Rwanda has also shown an ability to keep inflation and devaluations in its national currency, problems that have plagued regional neighbors.
In fact, the country relies on foreign aid for approximately 40 percent of its budget. After Rwanda was accused of being involved in the recent rebellion in Congo, many donors, including the United Kingdom and United States, suspended aid. Germany and Great Britain have begun to resume providing aid, helping to stabilize the country and allowing it to resume its aggressive economic policies.
Rwanda is controlled by the tough-as-nails Mr. Kagame, a former rebel fighter who helped put an end to the Rwandan Genocide and has come to rule the country with an iron fist. Since 1994 the average income in Rwanda has doubled, though this comes from an admittedly low starting point. While the nation still has a long way to go before achieving middle income status, indicators across the board appear to be pointing up.
Rwanda Ranks a Respectable 53 On Corruptions Index
According to the Corruption Perceptions Index, Rwanda ranks a respectable 53, making it one of the least corrupt nations in Africa. Meanwhile, an Illicit Financial Flows Index rates, which measures illegal capital flows from countries, has Rwanda as achieving a decent ranking of 104 (the higher, the better), ahead of numerous other African nations.
Yes, work remains to be done, but so far Mr. Kagame has shown both the ability and commitment necessary to continue to drive Rwanda forward. While the road to development will likely be long and difficult, Rwanda’s progress is a far cry from the genocide that nearly destroyed the national less than two decades ago. Indeed, if Rwanda succeeds, it could provide a powerful example to other African nations on how to successfully grow the economy.