Rwanda’s economic plans have fallen short. The answer? Listen.
Low trust and lack of accountability are holding Rwanda back. Dialogue and opening up are in everyone’s interests.
In 2000, Rwanda embarked on a development programme aimed at transforming the nation to middle-income country driven by knowledge economy by 2020. Over the following two decades, Rwanda made notable progress for which it received international plaudits. Its economy grew the tenth-fastest in the world from 2001 to 2010. Its income per capita rose along with Rwanda’s position on the Human Development Index, while poverty levels seemed to decline significantly.
Not everything, however, was perfect. Inequality remained high, while independent studies questioned the veracity of Rwanda’s poverty statistics. Moreover, the high growth rates were driven by foreign aid rather than a vibrant private sector or trade. When donor countries suspended financial assistance in 2012 due to Rwanda’s alleged involvement in the conflict in the eastern Democratic Republic of Congo, growth decelerated.
Several projects also fell short of expectations. From the early-2010s, for instance, the Rwandan government rapidly accumulated debt to upgrade the national airline and invest in large-scale infrastructure projects for developing the Meetings, Incentives, Conferences and Exhibitions (MICE) sector. These initiatives failed to generate their intended returns and fell even further behind when the Covid-19 pandemic struck.
The result of this today is that Rwanda is still yet to reach middle-income status and the deadline for this goal has been pushed back from 2020 to 2035. The country’s debt has reached 71% of GDP, most of it having been spent on big projects that did not address the immediate needs of the population. While the economy rebounded from the pandemic last year, the IMF has warned that “accelerating structural and economic reforms are needed to mitigate pandemic scars and ensure more inclusive and sustainable growth over the medium term”.
Despite the praise it received internationally, the pandemic exposed the shortcomings of Rwanda’s economic progress, especially in those sectors needed to achieve genuine social and economic transformation for the wider population.
According to the World Bank Human Capital Index 2020, for instance, a child born in Rwanda today will be 38% as productive when they grow up as they could be if they enjoyed high-quality education and healthcare. This figure is below average for sub-Saharan Africa and is driven by Rwanda’s poor education and high rates of malnutrition. These shortcomings are among the main reasons Rwanda struggles to attract private investment, which will be key for its economic development. The country is unlikely to be able to rely on continued borrowing, foreign grants or hiking taxes to drive investment.
Underlying these weaknesses is low societal trust, between citizens and between citizens and the state. This stems from both the legacy of the history that led to the 1994 genocide and Rwanda’s governance since. Many people lack confidence that there has been justice for all the atrocities committed, while human rights violations in the past decades have contributed to a distrust of the state. Rwanda has the fourth lowest reported happiness levels in the world.
This is compounded by the fact that citizens have little ability to hold their policymakers accountable. While Rwanda scores above the sub-Saharan African average for “control of corruption” and “government effectiveness” in the Worldwide Governance Indicators, it falls well below average for “voice and accountability”. Policies are typically implemented with little input from citizens and often lack sensitivity to the population’s wants and needs. This top-down approach not only means that people may be not satisfied with government policies, but the stifling of dissenting voices also means those policies are less likely to be effective and well-designed.
The lessons of history teach us that Rwanda is highly unlikely to transition to a modern and competitive middle-income country without developing highly capable and genuinely accountable institutions. This is not all that must change, of course. For instance, Rwanda’s development will have to be driven by trade and regional integration, yet instead of forging strong neighbourly links, Kigali has often allegedly been involved in regional insecurity and has increased political tensions with neighbouring states.
Nonetheless, domestic governance reform remains the single most vital aspect of putting Rwanda on the course it desires. The first step in this direction ought to be an intra-Rwandan dialogue between the government, political opposition parties, and civil society organisations in and outside the country.
Why dialogue? The history of Rwanda since independence has been characterised by successive regimes that have stayed in power by any means possible. The repercussions have been massacres and human rights violations, culminating in the 1994 genocide. To prevent history repeating itself, an intra Rwandan dialogue for governance reform is a necessity today. This small opening of discussion and inclusivity would help create an environment that could facilitate stability and the sustainable economic development in Rwanda and Great Lakes region that would be in everyone’s shared interests.