Rwanda: Genocide to economic beacon

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DAVOS/SWITZERLAND, 23JAN13 - Paul Kagame, President, Rwanda is seen during the press conference 'Launch of the East African Stock Exchange' at the Annual Meeting 2013 of the World Economic Forum in Davos, Switzerland, January 23, 2013. Copyright by World Economic Forum swiss-image.ch/Photo Moritz Hager

Rwanda is one of Africa’s fastest growing economies. The World Bank praised the nation for having a “resilient economy, with annual growth above 5%.

Flying high

Government investment has been at the forefront of Rwanda’s economic fortunes.

It’s hoped that the Kigali Convention Centre, built with state funds, will provide an attractive space for foreign investors to do business.

And it doesn’t stop there.

The government has poured millions into a national airline, which is set to fly to around the world, and a new airport. It’s hoped that Rwanda will become a tourism destination for wealthy foreigners.

Whilst some argue that these bold investment initiatives are very risky, Rwanda knows that it lacks natural resources. It must instead use its transport connections, security and political stability to create the environment for multinationals to invest.

Problems ahead?

There are questions about how accurate Rwanda’s growth statistics are.

And new challenges do lie ahead: debt to GDP percentage is getting higher and foreign direct investment has dropped. This is concerning and demonstrates the risks of debt fuelled economic expansion.

Also, a majority of the population are small plot farmers, whilst a third of the national budget is made up of foreign aid. It’s hoped that the “Made in Rwanda” manufacturing campaign will offset these drawbacks.

President Kagame, recently elected to a third term, has healed the country from genocide and turned it into an economic beacon. In order to ensure that economic growth can continue to stifle political dissent, he will have to grapple with these challenges.

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