Rwanda and its struggle to attain economic self-reliance
The Rwanda economy is performing well on the regional, continental and global scale with a steady growth and the country is one of the few African countries that have taken a direction of becoming self-reliant.
In the past five years, the journey to self-reliance has gained momentum. Domestic resources covered 60.2% of the national budget in the 2013/14 fiscal year, up from 42.8% in 2009/10.
While IMF statistics indicate that Rwanda’s growth for 2013 is projected to be 6.6 percent. For 2014, growth of 7.5 percent is projected, supported by a recovery in agriculture and a pick-up in services. This is has also seen the increase in financial inclusion from 48% to 72%
The subject of Self-reliance as a way of attaining dignity for Rwanda and its people has become a central topic today and this subject was central in the discussion that prevailed during the 11th National Dialogue Council, which ended this December 7, 2013; under the theme: “The Rwandan Spirit: Foundation for Sustainable Development”.
In order for the country to attain its development goals to self-reliance there are some strategies that have been put in place.
While presenting these strategies, the Minister of Finance, Ambassador Claver Gatate said that the economy is performing well and that the achievements reached so far have been possible through the implementation of home grown initiatives and community-based solutions as well as the hard work and dedication of Rwandans.
The minister said that Rwanda has experienced one of the fastest periods of socio-economic progress ever; over the last ten years the country has recorded rapid economic growth, reduced poverty by one million residents above the poverty line and poverty was reduced from 56.7% to 44.9%.
This has been accompanied by a growth in GDP at the average real GDP growth rate was 8.2% and increased access to services including health, education and basic infrastructure, universal access to education and health services, with 96% of school-aged children now enrolled in primary school and 90% health insurance coverage.
Highlights of Rwanda’s home grown solutions
Besides the economic aspects, Rwandans have adopted home grown solutions to enable them to be self-reliant as seen in the country’s ambitious vision 2020. Today, Rwandans have managed in only six months to build 3072 school classrooms out of 3172 planned this year, saving a total of Rwf110 billion that would have been spent by government.
The Umuganda program (monthly community cleaning exercises) have since 2007 been used to address various environmental and social support aspects especially for the needy, saving Rwf33billion that would have been used in reaching out all the communities. This is accompanied by the Girinka programs (one cow per family) in which over 183,614 cows have been donated to the poor families.
Health insurance has been implemented with government changing its policy on health coverage, and at least 90 percent of the 12million Rwandans have Mutuelle de Sante health insurance policy and over 45.000 health workers have been trained to reach out the rural communities.
Establishment of forums of mediators in the Justice system has resolved many local disputes at a cost of Rwf20.700 instead of over Rwf280.000 that a local person would incur in a classic court. This has been also accompanied by the completion of genocide cases, through the establishment of Gacaca courts among the home-grown solutions of justice.
The establishment of the Agaciro development fund has been the most remarkable home grown solution that drives Rwanda directly to achieving self-reliance.
Though this initiative was developed coincidently at the when Rwanda’s faced aid cuts from donor communities, the initiative has showed signs of hope. The fund has in the last two years accumulated over Rwf20billion as per records of December, 2013.
In order to maintain this growth, of which has made Rwanda get ranked among the best performing economies today, Rwanda’s Finance minister says that Rwandans must be reminded that the success of the country will depend on them.
“The attitude of dependence needs to be dealt with, adopt a culture of saving, mobilize large investment in the private sector, and improve the quality of products to cut the export deficit and increase access to finance” Gatete said, not that 49% percent of the budget is still foreign funding, but the country has a target of making an 80% contribution to its budget by the year 2017/18.
In addition, Gatete says that Rwandans have to continue contribution to the Agaciro Development fund, in addition to the 1/3 contribution of the government annually; so that hopefully the country can finance its own development programs.
He says that Rwanda needs to also address the sources of revenues and the tax base need to increase from 15% to date, to 20% through building a culture of pride to pay taxes of which Rwanda depends on for growth, review the tax exemptions and increase foreign large foreign investments, and simplifying the taxation policy.
“In order to attain these goals, we need to strengthen the household performances, emphasis on culture of global competitiveness, focus on productivity and private sector engagement and develop the identity of ‘I am a Rwandan’ and collective responsibility” Gatate noted.
The Rwandan population is expected to increase to around 16 million by 2020. Given that the major aspiration of Vision 2020 is to transform Rwanda’s economy into a middle income country (per capita income of about 900 USD per year, from 220 USD in 2000), this will require an annual growth rate of at least 7%.
This will not be achieved unless we transform from a subsistence agriculture economy to a knowledge -based society, with high levels of savings and private investment, thereby reducing the country dependence on external aid.
The questions that still hang are how will Rwanda increase self-reliance on a personal level, how to identify hazards in the cultural tendencies that impede self-reliance and what innovations at the national level need to be developed to attain this goal of self-reliance by 2020.