An article published in Forbes Africa in 2018 hailed Rwanda as “Africa’s poster child for progress” – a country that has lifted itself from a history of unspeakable violence to significant economic growth within the past 25 years.
The country’s economic growth reaches an average of at least 7% each year and, through President Paul Kagame’s Vision 2020 strategy, Rwanda is steadily working towards becoming a sustainable, knowledge-based economy.
Granted, the country is not without its issues. Poverty remains a challenge and the country still depends on foreign funds. Beyond this, many who have studied the development of Rwanda caution against the assumption that its particular development model would be successful elsewhere.
One of these warnings came from Professor Nic Cheeseman from the University of Birmingham, who wrote that Kagame’s approach – which involves the ruling party investing in the economy – only works within the political context of the country.
“The problem is that these conditions don’t hold in most African states,” he writes in The Conversation. “The ruling party cannot aspire to the level of dominance witnessed in Rwanda, because the opposition is too strong for this degree of political control to be sustained.”
Therefore, Rwanda’s success story should not be viewed as a one-size-fits-all solution, as the political climate that is inextricably linked to its journey will not be the same elsewhere.
Nevertheless, as Nelson Mandela Bay and the larger SA, we can learn valuable lessons from Rwanda’s approach to developing the economy.
The first of these pertains to the ever-present challenges around the ease of doing business. In the most recent “Doing Business” report by the World Bank, Rwanda is ranked 29th of 190 economies – and second in Africa – in terms of how simple and efficient the processes of starting a business are. (SA was ranked 82nd.)
More to the point, a report by the United Nations’ Africa Renewal magazine found that between 2005 and 2009, Rwanda cut the time it takes to start a business down from 21 to three days – with foreign direct investment during the same period climbing between $8m and $118.7m.
Another lesson comes from Rwanda’s determination to diversify its economy, while still offering significant support to agriculture, a strong contributor to job creation.
The diversification includes a drive to develop tourism – both by making the most of their natural environment of gorilla-inhabited rainforests, and by establishing Rwanda as a conferencing and events destination. In May 2018, the International Congress and Convention Association ranked the Rwandan capital of Kigali as the third most popular conferencing choice in Africa.
At the same time, Rwanda will not be left behind by the digital revolution. The country is a leader in the continent’s digital developments.
African newspaper Newsday ascribes part of Rwanda’s success to liberal policies that simplify and boost exports from the country, while the American business magazine Fast Company referred to Kagame’s Presidential Advisory Council – consisting of 16 leaders from the private sector – as an integral part of its success in attracting investment.
Whether the prosperity of Rwanda can be attributed to policy, private sector involvement or the development of certain sectors, the bottom line remains: these are all priorities that could, and should, foster economic growth in SA.
The Nelson Mandela Bay Business Chamber has been vocal in the past about the value of reducing red tape for new and existing investors, and we believe this can be achieved in SA and Nelson Mandela Bay. The announcement of a onestop shop to be established by the municipality is certainly a step in the right direction.
Policy remains a national imperative, and we are pleased with President Cyril Ramaphosa highlighting the importance of exports in his recent state of the nation address.
From a local and national perspective, the business chamber considers tourism to be a key sector for future economic development. The Rwanda model is particularly relevant for the Bay, as we can boast a biodiverse destination that could benefit from exploring the possibilities of business tourism and conferencing.
A strong theme from the Rwanda success story, and, encouragingly, from Ramaphosa’s address, is the importance of involving the private sector in planning for broader economic development.
The business chamber will continue its work in advocating for sustainable and inclusive economic development in the Bay across various sectors.
The final lesson we can take from Rwanda is the principle of Umuganda: a programme through which its able population between the ages of 18 and 65 years come together to carry out community work on the last Saturday of the month. This is to foster socioeconomic development and nurture a shared national identity.
Let us all take the principle of Umuganda to heart and work together to achieve a better future for all our residents. Economic development is not an easy road, but with co-operation between all stakeholders, this common goal may not be as far off as it seems.