Rwanda’s path to prosperity
By Doreen Kagarama
Growing up in exile, I formed images of my motherland but when I first came to RwandaRwanda was devastated. From the damaged infrastructure and bullet ridden buildings, it was obvious Rwanda’s economy had collapsed beyond repair. However, something deep inside told me the struggle was not over. It had just changed from struggle for peace to struggle for prosperity. in 1995, what I saw was in sharp contrast to all I envisaged.
Twelve years later, Kigali’s skyline is gloriously speckled with numerous multi-storied buildings; among them the recently inaugurated Union Trade Center. As the city evolves, so do the cultures of the Kigali city dwellers; Rwandan holidaymakers are visibly excited about yet another new place to ‘hang out’ while young professionals are eager to indulge in the ‘finer things in life’ like glossy magazines, sea food, French wine and much more from the unlimited choice of products available at the city’s largest shopping mall. Kigali has indeed evolved from nothing to a blooming metropolitan capital in every sense.
I listen to a distinguished speaker on developing nations, Mr. Michael Fairbanks, address a group of students at the recently refurbished School of Finance and Banking (SFB), I sigh with relief. Rwanda is a transformed nation and her private sector is increasingly playing its role in the struggle for prosperity.
“Prosperity is a choice”, says Michael Fairbanks, a former Havard, Stanford and Georgetown lecturer. Michael’s words resonate with my views. The choice to prosper has already been made by Rwandans, now all that is left to do is address some key factors that will stimulate and sustain Rwanda’s wealth and growth.
Globalization is accelerating integration of the world’s economies and societies. Political boundaries are disappearing and costs of communication are rapidly declining. To achieve prosperity therefore, we must understand and embrace globalization.
Already, a lot is going on for Rwanda, coffee and tourism, two of Rwanda’s biggest exports, have captured global market share, Rwanda’s specialty bourbon coffee is fetching higher prices on international markets, discerning tourists are paying $375 to see the gorillas, handicraft is doing the same with the ‘Agaseke’ baskets. Rwanda must take advantage of Globalization to access markets that were previously out of reach.
In his New Year address, President Paul Kagame stressed the need for value addition. country must seek ways to serve lucrative market niches. This will in turn increase the price Rwandans receive for their products. Value addition requires more learning about customer needs.
Such strategic market research is already available from On The Frontier Group in Rwanda. On The Frontier is the first Venture-backed US firm to focus on developing nations. The organization is presently offering its consulting services to the Government of Rwanda in nation’s tourism, coffee and agro-industry sectors. Information available is in sectors such as coffee, tourism, tea, horticulture, hides & skins and mining. Existing strategies for these industries suggest Rwanda’s export could reach $300 million by 2010 if all investments were made.
Understand that wealth in the future is based on higher forms of capital
The time of comparative advantages is over. No nations can create prosperity based on its natural resources alone. New forms of capital include trained human capital, strong institutions, insights and cultural attitudes.
The past ten years have seen significant investments in training, institution building, legal reforms and a new mindset for Rwandans. At least 32 per cent of private sector firms view human resource capacity and staff training to be their primary challenges in operating their businesses – second only to access to capital.
The Rwanda Private Sector Federation (RPSF) established nation-wide Business Development Services (BDS) centers to enhance private sector capacities through training, information distribution, facilitating access to finance, and consultative services. Such initiatives must be scaled up.
Assist the private sector
The government must do everything it can to assist the private sector, except to impede competition. The private sector needs several inputs to create products. It needs qualified people, good infrastructure and, most importantly, a non-defensive dialogue between the public and the private sectors.
The government is winning international accolade for its openness to the private sector. Significant investments are being made in developing required infrastructure and policies have been established that will boost the key priority sectors. Rwanda has created a culture of public-private dialogue through several forums including the National Investment Dialogue, the Public-Private Forum and even industry level workgroups.
Our moral Purpose: ‘A high and rising standard of living for the average citizen.’
Vision 2020 calls for Rwanda to become a middle income nation with a per capita income of $900. To stimulate growth, Rwanda’s leadership has prioritized anchor export industries—coffee, tourism and tea. Given that eighty-five percent of Rwandans are farmers; these sectors provide the most potential for reach the largest cross-section of Rwandans while developing a service component to the economy.
The informal private sector will require a similar focus. Rwanda boasts 70,000 micro and small-scale enterprises. These small-scale businesses are the foremost job provider outside of agriculture. The country must articulate support programs to support this important component.
As I reflect on the past twelve years, I cannot help but think that slowly but surely Rwanda is winning the struggle for prosperity.
Doreen Kagarama is the First Secretary at Rwanda’s Embassy in the United States. In the past she has served as a Senior Analyst working with OTF Group, a Boston-based economic development firm advising Rwanda’s Public and Private Sectors on achieving economic growth through competitiveness.
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