In 1994, Rwanda was devastated by a 100-day genocide that saw the violent slaughtering of over 800,000 people. The difficulty of recovering from such a horrific event and its severe social and economic impacts cannot be underestimated.
It has taken conscious and carefully planned efforts by the Rwandan government to stimulate economic growth at an annual rate of over 7 percent as well as promote an active ‘start-up culture’ across the country. This small landlocked nation of 12 million people is now redefining the nature of business on the African continent.
Evaluating the effectiveness of their key strategies offers insight into how the Rwandan society has transformed and thrived over the past 25 years. There is evidence to suggest that their success will continue into the future and inspire other countries to follow their example.
Political stability and realistic policies have played an important role in Rwanda’s transformation. An all-inclusive government gives a voice to individuals, business people, and politicians, while an emphasis on measurable targets has guaranteed tangible impact.
As the aspiring “Singapore of Africa”, Rwanda’s main aim has been to transition from its historically agricultural economy to one that is more technology and private sector-focused.
In 2000, president Paul Kagame implemented the “Vision 2020” plan to provide a clearly defined framework for the country’s development. Areas of focus include maintaining transparency, developing skilled human capital, upgrading vital infrastructure and expanding their international relationships.
A 2019 study conducted at the University of Johannesburg measured the progress made towards achieving the targets outlined in “Vision 2020”. While only 13 of the 48 indicators have been completely fulfilled, the authors conclude that significant progress has been made in all areas. Any noteworthy shortfalls and persistent issues have been used to inform and refine future strategies such as “Vision 2050”. Announced in 2015, this plan continues Rwanda’s path to becoming a high-income country.
According to the 2019 World Bank Doing Business Index, Rwanda is the 29th easiest place to do business globally, and the only low-income country in the top 30. Regulation reforms have simplified business and investment by removing unnecessary ‘red tape’. It takes just 48 hours to start a business and an additional 6 hours to register it online for free.
An agile open-border environment and an easing of national visa requirements have also encouraged global interest in Rwanda. In June 2019, Norrsken, a co-working space and investment fund based in Stockholm, opened its tech and entrepreneurship office in the capital city of Kigali. With their first center outside of Sweden, the foundation hopes that their presence in Rwanda will improve the wealth prospects of entrepreneurs and attract more international investment to the region.
Commitment to technology
In 2011, the Rwandan government constructed a 2300-kilometer fiber optic cable network to improve internet access for all citizens and stimulate digital innovation. Having reliable network connectivity is absolutely essential for new businesses in the 21st century.
Subsequent infrastructure investments have allowed tech startups to pursue projects such as cashless payment systems, that further broaden financial and technological inclusion. Regulatory sandboxes, another attractive feature of Rwanda’s entrepreneurial ecosystem, offer a temporary relaxation of regulatory requirements to allow startups to test new digital products before officially launching them to the public.
In 2019, Mara Group, a Rwandan company, capitalized on these favorable conditions to release the first mobile phone manufactured completely in Africa. The devices boast a range of high-quality features such as fingerprint sensors for an affordable price of fewer than 250 dollars and have quickly gained popularity across local and global markets.
To continue expanding its technology sector, Rwanda has announced the construction of Kigali Innovation City, a 2 billion dollar project that is predicted to create 50 000 jobs annually. The special zone will host new educational facilities and tech company headquarters as well as the offices of biotech and real estate firms.
A new national curriculum
While successfully creating an environment to promote private sector development, Rwanda has recognized the importance of preparing their youth to actively participate in this new innovative space. In 2016, the Competence-Based Curriculum was implemented in all Rwandan schools in collaboration with Educate, a non-profit organization.
The curriculum includes mandatory entrepreneurship classes for all secondary school students as well as government workshops that encourage the pursuit of self-employment. An additional focus on the country’s culture and history has strengthened nationalist attitudes. Young people are being prepared to contribute to the growth of their country by equating entrepreneurship with national unity.
In the most successful cases, students have launched their small businesses to generate income and direct their career paths post-graduation. An example on Educate’s website follows the journey of 2 girls who opened a jewelry making business and describes how this experience allowed them to build more self-confidence and resilience.
Room for improvement
While the improvements Rwanda has achieved in such a short period of time are truly admirable, there is still much to be done on their path to becoming a high-income country. Poverty levels and unemployment rates remain high, particularly in more rural regions of the country. There is also a lack of capital available for startups and high taxes remain a burden to new businesses. Rent, licensing fees and security are further complications faced by budding innovators and entrepreneurs.
With visionary leadership that continues to rely on credible strategies, there is little doubt that Rwanda will overcome these challenges in the future. Their good governance, business regulations, technological focus, and modernized education system have broadened the opportunities available to all citizens and unlocked the possibilities that come with a global network. Such innovations will provide the foundation for a much-needed economic revolution across Africa.