Rwanda unveils post-Covid investment plan at CWEIC Forum

Trade delegates from Rwanda have recently unveiled the country’s post-Covid economic recovery and investment plan in a forum with Commonwealth Enterprise and Investment Council (CWEIC).

HE Yamina Karitanyi, High Commissioner in the UK, was joined by Hon Soraya Hakuziyaremye, Minister of Trade, and the Hon Clare Akamanzi, CEO of Rwanda Development Board to discuss Rwanda’s economic successes to date, future investment opportunities and the Rwandan government’s Vision for 2020 and 2050.  

Prior to the pandemic, Rwanda had experienced a period of rapid economic growth from investment and industrialisation. Indeed, the country had enjoyed an average rate of 7-8% GDP growth in recent years, reaching a record high of 9.4% in 2019.

Much like the rest of the world, however, Rwanda’s economy has not been immune to the debilitating effects of the pandemic. As businesses were forced to shut their doors in the nationwide lockdown, income generation ceased for the work force and consumer spending ground to a crippling halt. Hon Soraya Hakuziyaremye, Minister of Trade did not shy away from the financial reality, and told the council that they could expect Rwanda’s economy to retract anywhere between 35-105 billion dollars due to COVID-19.

In response to the crisis, the government has launched a financial relief program to provide grants and food supplies for households and mitigate the impact of lockdown on private businesses. This new Economic Recovery Fund (ERF) totals over Rwf 100 billion, raised both from the Rwandan government and with aid from international funding partners.

Tourism and hospitality sectors have been greatly affected by the pandemic, as both international and domestic tourists have been prevented from travel. As such, 50% of all funding from the ERF will go to workers in the tourism sector, and the government is to advocate for domestic tourism as lockdown measures ease. International flights are to resume on 1st August.

Similarly, Rwanda’s manufacturing sector has also been severely damaged by the global spread of coronavirus. The industry had been steadily growing prior to the pandemic at a rate of 12-16% annually. To save heavy industry and keep factories active during lockdown, the government has supplied PPE to factory workers, and extended liquidity to banks supporting businesses. A loan equivalent to 50 million rand has been provided to ‘weather the storm’ for the private sector. 

Nonetheless, Rwanda is optimistic about the future. The country keen to position itself as a major investment hub for Africa, and has recently been named by the World Bank as the second easiest place to do business in the continent.

To bolster Rwanda’s reputation even further, the government has launched two new programs to fold into Rwanda’s Vision 2050, the country’s long-term plan to sustained economic growth.

The first program, Visit Rwanda, targets traditional tourism markets in the developed world, for instance purchasing sponsorship deals with Arsenal FC and the American NBA to promote international travel. What’s more, Visit Rwanda also encourages medical tourism in Rwanda, as patients come from surrounding region for the nation’s medical expertise and diagnostic capability.

The second program, Made In Rwanda, advocates for the growth of heavy industry, such as paints, ceramics, and metal working. Agro-processing plants also benefit from the program: grants and investments will be provided to support fruit, vegetable and beef processing. Indeed, Made In Rwanda has already launched its flagship agro-processing program in partnership with Israeli investors to oversee the aggregation of 15,000 hectares.

Other industries of under development are pharmaceuticals, textiles and garments, automobile assembly, and technology.

Rwanda is blessed with a young population and a rapidly expanding labour force. According to the Minister of Trade, these assets can be tapped into by removing tariff barriers and improving trade initiatives to increase exports to the continent and beyond. For instance, the recent increase in cargo flights from Rwanda to Europe has benefited Rwanda’s horticulture sector through coffee and tea exportation. In 2018, a direct flight path was established between London Gatwick and Kigale, and another flight path between Heathrow and the capital is expected soon.

What’s more, Rwanda is keen to mitigate the pandemic’s economic damage in the Central and East Africa regions by integrating trade and fast-tracking the development of the Continental Free Trade Area.

All of these programs dovetail into Vision 2050, the Rwandan government’s long-term economic and leadership plan to transform Rwanda into an ‘upper-middle’ income country by 2035 and a high-income country by 2050. The scheme champions leadership that is agile and highly responsive to changing events. For instance, as cash transactions were problematic during the coronavirus pandemic, decisive leadership and funding led to the financial sector being able to increase their capacity for online transactions.

Furthermore, to build resilience in the economy, the government has entered talks with CDC Group, the largest private sector investor in Africa, to transform Kigale into a gateway for future capital flow. Through their partnership, they have launched the Kigale International Finance Sector, a new project to secure Rwanda’s reputation as an African trading hub.

Photo: CDC Group