When the Rwandan Patriotic Front took over Kigali on July 7 1994, they liberated a country on its knees, with a non-existing economy. For a country with hardly any minerals to look to as resources, the fragile economy before the genocide had been reduced to shambles in just 100 days.
Lootings and bankruptcies characterized the economy. Banks shut down as all those that had any savings were left in oblivion.
Twenty years down the road, Rwanda is the second easiest place to do business in Africa, according to an annual World Bank report on doing business, and 32nd overall, a 20-place improvement from the previous year.
But this did not come on a silver plate for the country, as strict reforms had to be made for the nation to climb out of the turmoil, a no-corruption discipline and courage to venture into the unknown being the major catalysts for advancing Rwanda’s economy to where it is today.
Faced with growing inflation, the country embarked on macro-economic reforms that continue today, and are hoped to vault the economy into middle status according to the EDPRS II and vision 2020 programs and goals.
The GDP per capital rate that was less than $200 in 1994 is now almost $1,000, with the target being $1,200 by 2017. To achieve this the country has set to diversify its traditionally reliant economy as it aims for the private sector to be the country’s main driver of growth.
“What Rwanda has achieved economically is a miracle,” notes Fred Mutebi, a Ugandan working with the Rwanda Stock Exchange. “You have countries like the Congo (DRC) that are rich in minerals but haven’t achieved any economic progress close to that of Rwanda.”
The traditional exports of coffee and tea that used to contribute to more than 80% of the country’s revenue by 1995, today contribute only 30%, with tourism as the country’s main foreign exchange earner. The tourism sector contributed more than $300 million as of last year but the country targets more than $400 million from the sector by 2017.
“We are looking at not only increasing tourism revenues but also improving the manufacturing sector,” noted Trade Minister Francois Kanimba in support for the need for diversification.
Rwanda’s balance of payment position has continued to be the same over the past ten years, though there has been a change in its export markets.
In 1994 the country had to major export routes in Zaire (now Democratic Republic of Congo) and Burundi but the current regime has seen this diversified with Uganda and Kenya as new partners.
“Partnerships like the single tourism visa and single customs territory will increase trade between Rwanda and other Eat African nations,” notes economic expert David Kayumba.
Trade between Rwanda and other East African Community members is at its most vibrant time with imports from the region comprising $516 million while exports to the region stand at $123 million.
Over 1 million people have been lifted out of poverty within the past ten years, and one would say with its current direction the memories of 1994 will be put to pass as Rwanda’s economy is set to blossom in the next ten years.