• Rwanda: “Our economic model is halfway between capitalism and socialism”
  • Rwanda: “Our economic model is halfway between capitalism and socialism”
  • Rwanda: “Our economic model is halfway between capitalism and socialism”
  • Rwanda: “Our economic model is halfway between capitalism and socialism”

Rwanda: “Our economic model is halfway between capitalism and socialism”

The ‘Thousand Hills’ country has revised its 2020 roadmap: the deadline has been now set for 2050. By the time, Rwanda will be not only, according to Paul Kagame’s ambitions, in the ranks of the developed nations but also a land of export of knowledge. For this, the Rwanda 2050 strategy focuses on innovation, technology and industry as highlighted by Vincent Munyeshyaka, Minister of Trade and Industry of Rwanda.

Interviewed in Kigali by Dounia Ben Mohamed
Photo credit: DBM/ANA


Your country is an example in Africa. In terms of good governance, support performance for SMEs and young entrepreneurs … What are the keys to the Rwandan model?

The success we are experiencing comes from the country’s leadership. Starting in 2000, we managed to develop and create visionary programming: Rwanda 2020, a strategy that aims not only to ensure economic growth, but also to reduce the poverty of our population by ensuring fair distribution of wealth generated by our economy to our population. So, if we try to look at our development over the last fifteen years, our economy has grown 8% a year on average. At the same time, we have seen the reduction of poverty. We have also managed to set up a social protection policy, with health insurance coverage for all our population. We have reached more than 90% of the population to date a success that comes from our leadership. It is a matter of having a clear vision and of well organizing the monitoring and assessment mechanism, because plans are one thing, but implementation is another. We have managed to set up this framework to ensure that the vision is implemented, with an accountability mechanism. For example, when the central government announces infrastructure, the local government is also committed to do the same thing, with the entire administration, up to the population. This culture has been perfectly integrated by our people. We have “performance contracts” for government members, including local governors, but also in families where the members commit, for example, to take their children to school. This culture is the bedrock of our development. I do not know if it’s a model … But what I can recognize is that we have created a legal framework to address the issues of access to funding, skills, access to the market…That is why we have paid particular attention to the SME sector. In fact, 98% of our business comes from SMEs and, in terms of job creation, 41% of jobs created in the private sector come from SMEs. It is a very important sector for our economy. 

Rwanda has recently revised its strategy. What are the objectives achieved by the 2020 vision and what adaptations include the 2050 vision?

Three facts characterize our economy: constant growth; a declining poverty rate from year to year and the disparities between the better-off and the poorest classes, which decrease as the country develops. So we are on the path to inclusive growth because we have managed to develop social programs, a program for which the government spends a substantial budget, in partnership with the World Bank, of nearly US $ 80 million per year, targeting social protection. This includes the mutual health that covers the entire population. Some vulnerable people, including genocide victims and the elderly, receive a monthly allowance. We also have a social housing construction policy, another one for the distribution of cows to improve the nutrition of our poorest populations and provide them with a minimum income. That is why our economic model is halfway between capitalism and socialism. It’s a combination of what we call inclusive and sustainable development, because we cannot look for sustainable development without including everyone, at a time when the other is going to break and we risk social problems. A number of capitalist countries have faced such problems in the past and even now. That is why our political, social and economic governance system puts the Rwandan at the center of everything. 

Now do you focus on innovation, technology … and industry?

In Vision 2020, we focused on basic infrastructure to accelerate economic development. We also tried to promote education, and already we had opted for information technology for faster development. But if we analyze our industry, for the moment we have not reached the threshold. The industry’s contribution to GDP is 16%, while agriculture accounts for 30% and services 47%. We are looking forward to transform our economy. I have never seen a developed country without previously developing its industrial sector. And to accelerate industrial development, we must focus on innovation and new technologies. This is the crucial point in our 2050 strategy, technology, innovation, by accelerating the industrialization of our economy and developing sectors such as mining. We want to create added value and the industrial sector can achieve that goal. Once in our country, we will have innovation- and technology-specialized industries, so we can export the technology in the coming years. We also adopt green growth. We must make sure that our industrialization process helps protect the environment. That is why in terms of technology choices, we will be very selective to ensure sustainable development which can be effective only if it is inclusive and if it is environment-friendly. 

You evoke the mining sector, Rwanda displays a serious potential in the field?

Unlike what was said in the past, our country, indeed, has real mining potential. We have conducted exploration studies to identify our natural resources, and it seems that our basement is well stocked, though it remains to be exploited, developed. From this year, and 2019, we will invest in added value. We do not want to continue to export the raw material. If we add the percentage of added value, we will triple the resources. We have many ores and much gold, oil…, which allows for economic diversification, and makes less depend on traditional exports such as tea, coffee. Today, we export textile. And exports from the mining sector are taking the advantage over other products. 

The Kigali Special Economic Zone, focused on industrial activity, illustrates the economic diversification strategy and creation of added value.

We have a very strong strategy to go in that direction. It includes the Economic and Special Zones. To date, we have identified 9 sites. The first is here in Kigali, the other 8 in the so-called secondary cities. You know that in Rwanda we have a decentralization policy. We have secondary cities that must support Kigali in terms of urbanization but also in terms of attractiveness, sites where we see potential. What we are doing for the moment is to develop the infrastructure to allow these sites to attract both national and international investors.

Both having the same tax advantages?

We have an investment code that gives the same benefits to local and international investors. But the fact is that foreign investors read, learn more about the existing benefits. These are provided on request. So in practice, we realize the foreigners benefit more than locals. We are seeking to attract the best investors around the world; our economy is open to everyone, not just Americans or Asians.

Including the French?

Yes! We have French investments in Rwanda. I recently received an investor, already involved in the mining activities in Rwanda, and looking for investment opportunity in packaging. Our country attracts everyone. But we are focusing on investment quality. 

For you, what is a quality investment?

First, technology: High tech, high quality technology. Then, ensure the transfer of technology to the premises, and show a high potential in terms of job creation. But also in terms of added value, a volume of production for export, for example, up to 50% or 80% of your production. We already have industries that export 80% of their production. And this is precisely the type of investment we are looking for. Last year, textile industries not only created a lot of jobs but also exported 80% of their products. In America, in Europe…

Interviewed in Kigali by Dounia Ben Mohamed
Credit photo: DBM/ANA

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