Friday, 30 May 2014 13:42

Rwanda Vision 2020 by Claver Gatete, Minister of Finance, Rwanda

From Canada to Rwanda

When I'm asked to talk about the reforms Rwanda is implementing, my first reaction is to think about my personal experience moving from Canada, where I lived and where everything works, back to Rwanda where there was no governance system post-genocide. It was a great learning experience for me because of what we've gone through.

The Rwandan perspective of the world
But to start let me share with how we see the world and how the world has shaped us. Our view is economic growth must be coupled with development. Not economic growth for the sake of it, but how it filters down to development. How it must include everyone so that it can provide a dignified life for everybody so it becomes a win-win situation.

Starting point: 1994 and the post-genocide picture
But of course it would be difficult for me to start talking about our future without mentioning where we started. In 1994, after losing 1 million people in just 3 months, the fastest genocide in history, the Rwandan economy declined by 50% immediately. Inflation was at 64%, and all infrastructure destroyed and 78% of Rwandans were below poverty lines. In short, the social-economic fabric of my country was completely non-existent, at that point there were no institutions, no government, no system, no infrastructure, no revenues via taxes.

The 3 phases of recovery:
This was the first post-genocide phase, which I call "Emergency Phase" from 1995 to 1997. The plan was simple: use UN aid money to feed the people and provide basic services.

We then moved swiftly to the second phase, "Rehabilitation & Development" from 1997 to 2000 where we started engaging with the IMF and World Bank to start larger and more strategic infrastructure programmes.

But at the same time, we knew we could not move on without a clear direction of where we wanted to go and the third phase, which I call "Sustainable Development", became known as "Rwanda Vision 2020".

Six Pillars of Rwanda Vision 2020:
Our vision is simple: We want Rwanda to become a middle income country by 2020. The strategy started to be implemented in the year 2000 and focused on six pillars:

1. Good governance
2. Human development
3. Private sector-led economy
4. Infrastructure development
5. Productive & market oriented agriculture
6. Regional and international integration

In our view, a knowledge-based economy evolves around the human being. Our reforms have education, health and food in its core. We need productivity across all sectors. We need human capital, skills but also reforms to enable them to become productive.

Therefore our reforms include major themes across all sectors underpinned by our "IT Vision", which will enable a service-based economy to flourish by tapping on the inspiration of the young Rwandan, which is more than 60% of our population.

But reforms also include land ownership rights, equality, science & technology, sustainability, macro-economic stability, public finance management systems and so forth. By the way, I believe across Africa and the developing world we have one of the best finance management systems.

These reforms are already paying dividends. Rwanda has experienced more than 8% GDP growth over the last 10 years, with inflation in single digits at around 4%. Poverty levels dropped from 78% in 1994 to 45% currently. The vision is to take this number to below 30% by 2018 and below 20% by 2020.

Rwanda is now one of the few countries to provide free universal primary and secondary education, so all our children have the opportunity to make a better life for themselves. Life expectancy increased by 9 years over the past 10 years. Access to mobile phones increased 10x from 6% to more than 60% in 6 years. Women representation in Rwandan parliament is now at 64% after recent elections. We believe in the power of women participation in our economy, in entrepreneurship, in youth and fostering the right environment for them to develop their skill set and become productive.

Concrete results
We are convince these reforms will pay off in the long term. They have allowed our country to be considered highly politically stable and safe investment destination. We are now Africa's fourth least corrupt country and Rwanda was named the second best global reformer by the World Bank's Doing Business report in 2012 making the country Africa's third best place to do business behind Mauritius and South Africa.

Currently it takes an entrepreneur 6 hours to register a business online and the entire country has fibre option broadband infrastructure. This, I believe, will enable the new Rwandan economy we want to create.

We will keep pushing on key areas such as macro-economic stability, open economic transformation, technology (especially mobile payments), rural development, productivity and accountable governance.

We don't want growth just for the sake of it. We want inequality to be properly dealt with and that's why we look at economic growth from bottom-up perspective so that social programmes that are helping our people to leave poverty to financial inclusion and ultimately turning Rwanda a middle income country. And that is why in our view the BRICS countries are becoming a stabilising force to the global economy and also financing our growth.

We are seeing now investment sources coming from countries like India, China and Turkey and other emerging countries and this is another game changer.

This article was written based on a keynote speech delivered by Hon Minister Claver Gatete in London on October 8th 2013 during innovaBRICS & Beyond 2013