Introduction
Rwanda is a landlocked country located in East Africa. It is a hilly and fertile country with a dense population of approximately 12.2 million people (Bishumba, 2018). It borders, Tanzania, Uganda, Democratic Republic of Congo and Burundi. It has been categorized as a low-income country but it is working its way towards being a middle-income country. Even though 39% of its population is living below the poverty line, Rwanda has managed to make progress by struggling to recover from the aftermath of the 1994 Genocide which significantly tore the country apart making a significant negative economic impact (Bishumba, 2018). Today, Rwanda has a steady economic growth which they are likely to be a middle-income country very soon. The International Monetary Fund (IMF), as well as the World Bank, has made significant contributions by supporting Rwanda economically to ensure its economic growth and development. With help from these two institutions and other donors, Rwanda has been able to make significant economic as well as structural reforms to sustain its economic and development growth. Focus on Rwanda, this paper will discuss its economic development efforts and also give an overview of its economic growth and development.
Economic growth and development overview
Rwanda currently looks forward to being a middle-income country soon and to be a high-income country by 2035. It 2035 vision will be executed through a series of National Strategies for Transformation executed through sectoral strategies for seven years that are focused on achieving the Sustainable Development Goals (The World Bank, 2019). The National Strategies for Transformation was introduced after two development strategies were implemented; Economic Development and Poverty Reduction Strategies (EDPRS) which was implemented between 2008 and 2012, and EDPRS-2 implemented between 2013 and 2018 (The World Bank, 2019). After the implementation of these strategies, Rwanda managed to experience strong economic as well as social performances. Actually, they experienced an average growth of 7.5% until 2017 whereas its per capita growth domestic product increased at 4.7% per year (The World Bank, 2019).
Currently, the economic freedom score for Rwanda is 71.1 thus putting its economy to be the 32nd freest economy ever in the 2019 index (“Economic Growth and Trade,” 2016). Rwanda’s overall economic growth score has grown by 2.0 points, championed by the high scores of Rwanda government integrity, judicial response, and effectiveness, fiscal health as well as the tax burden. Moreover, it is ranked second among the forty-seven countries within the Sub-African region. Its general score tends to be above the average regional and world scores. Robust economic growth has progressed but stays driven partly by an untenable as well as a self-defeating policy of import substitution together with fiscal measures enforced to curtail import demand (“Economic Growth and Trade,” 2016). Prior structural reforms, as well as the adoption of an effective regulatory framework, enhance business activities and also government plans more strategies for improving the business climate. Furthermore, tax rates are moderate, both corporate and personal tax.
Industrial base
Rwanda’s industrial base makes up 20% of the Gross Domestic Products which creates employment for less than 2% of the productive population. Literally, manufacturing makes up the most essential basis of industrial activity, making up about 12% of GDP whereas construction makes up 8% (“Economic Growth and Trade,” 2016). The Rwandan government has focused on improving its industrial base by reviewing its industrial policy in order to make the policy more lenient and encouraging investment in the industry. The government reviewed the industrial policy in order to make it favorable and easy to invest in industries. This helped in attracting both local and foreign investors.
Expectancy and literacy rates
The life expectancy in Rwanda for males is 66.1 years while for females is 69.9 years. The total life expectancy is 68.0. It is therefore ranked to be 129 in the World Life Expectancy ranking. The life expectancy rate has been gradually reducing and has been linked to being mainly caused by diseases. Initially, the adult literacy rate was 57.9% in 1991 (“Economic Growth and Trade,” 2016). The literacy rate in Rwanda has increased to 71.2%. It is alleged that the increase in the literacy rate has been significantly contributed by the empowerment of the girl child and women by offering them education. To promote girls and women’s education, the government of Rwanda has focused on amending the Rwandese culture by advocating for the education of girls and women (Bishumba, 2018). To achieve this, the Rwandan government has introduced free and compulsory education and made it a basic right for every child. The government has focused on increasing access to education by girls and women by putting it a priority on its agenda.
Funding interventions
Rwanda has been benefiting from some financial donors to improve its economic growth and development. One of its main financers is the World Bank. World Bank has provided Rwanda with a lot of financial aids to improve its economy. For instance, currently, the World Bank portfolio entails fourteen national projects having a net commitment of $1,185.77 million (The World Bank, 2019). Previous interventions made by the World Bank have proven to be a success given the increase in the economic growth and development of Rwanda. Moreover, the International Monetary Fund, International Development Association, Multinational Investment Guarantee Agency, as well as the International Finance Corporation, have been providing financial support to Rwanda to enhance to fund its development projects (The World Bank, 2019).
Conclusion
To sum it all, Rwanda has been experiencing a steady economic growth and development. It has made significant improvement and it is likely to be soon categorized as a middle-income country. Moreover, with the help of IMF, World Bank and other funding or donor organizations, Rwanda experiences rapid economic growth and development.