Rwanda: Aid for Trade’s Golden Child

Rwanda’s Export Boosting Efforts

21 years following a genocide, which devastated the tiny East African country, Rwanda has transformed itself into a beacon of economic development that many hold as a model for Africa.

Rwanda enjoyed an average GDP growth rate of 7.73% between 2000 and 2015 and those living under poverty fell by 6% in a mere three years between 2011 and 2014. Furthermore the country has established itself as the easiest place in Africa to do business. With achievements like this one can see why Rwanda has received acclaim. Indeed its list of high profile admirers extends to former British Prime Minister Tony Blair.

Being one of the worlds most densely populated nations, landlocked and possessing limited natural resources, Rwanda would not be the obvious location for an African success story. The government’s strategy to overcome these obstacles was set out in a mission statement published in 2000 titled Vision 2020. The key objective outlined within this was to transform Rwanda from a country dependent on subsistence agriculture into a knowledge-based middle-income economy within 20 years.

Vision 2020 set out a programme for inclusive growth by transforming Rwanda through investment into its most valuable resource, its people. Added to this the programme targets trade, export diversification and deeper regional integration. In pursuing these ambitions Rwanda has established global links and relationships. One of the biggest success stories of this effort has been between Rwanda’s coffee producing industry and western coffee giants Starbucks and Costco.

These two companies have made deep commitments to Rwanda’s coffee industry. Costco now runs an internship programme for Rwandans whilst Starbucks actually provides funding to organisations that offer loans to coffee growers, which helps them sell their crops at the best time to get the right price. The loans also help farmers to invest in their farms and make capital improvements.

Rwanda’s effort to achieve development through trade is further showcased by the governments desire to unlock Rwanda’s export potential. According to the Minister of Trade and Industry, Francois Kanimba:

 

‘Any economist who knows Rwanda, knows very well that we have a very strong base for agro business exports, which have not yet been exploited due mainly to logistical constraints. One of the pillars of this strategy is the growth centre logistics which will facilitate all the logistics to collect, handle, value and package potential agro products Rwanda may distribute, not only to the regions surrounding our country but also far away to the developed markets in the Middle East, Europe, even far away in the US.’

The ultimate hope of the government is that investment into Rwanda’s logistics capabilities will not only boost the prospects of Rwandan exporters but also turn Rwanda into a regional logistics trade hub.

‘If such logistics are up and running efficiently they will transform themselves into potential exporters of logistic services since neighbouring countries will use them.’

 

Rwanda’s strategy to invest in human capital, establish global business links and enhance export capabilities is paving the way to middle-income status with a rapidity that deserves recognition.


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