30 January 2006

Rwanda: Vision 2020: Rwanda's Struggle for Prosperity


Kigali — Recognizing this reality, Rwanda's leadership aims at making Rwanda a middle income country by 2020. Vision 2020 boldly states what Rwanda can achieve by unleashing the economic potential of its citizens. Five years after its inception, the time is now right to assess Rwanda's progress towards Vision 2020.

Visions are often to countries what New Year's resolutions are to individuals: lofty goals pushed aside as soon as the reality sets in. Most African countries boast of these grandiose visions, often ambitious statements denuded of any practical implications. Rwanda's leadership is steering the country on a different path: it demands that policy, strategies, programmes and investments actually be measured against Vision 2020.

Nonetheless, most Rwandans would be hard-pressed to define Vision 2020. So, what is Vision 2020? In Vision 2020, Rwanda's leadership sets ambitious goals for the nation's development:: To increase its per capita GDP from $250 to $900 between the years 2000 and 2020. Achieving this goal would require Rwanda to expand its economy seven times.

If achieved, Rwanda would be transformed. The Greek word for transformation, metamorphosis, is used to describe the amazing change a caterpillar goes through in becoming a butterfly. This powerful metaphor illustrates the transformation Rwanda would undergo under Vision 2020.

The most obvious benefit of this metamorphosis is economical. Vision 2020 will make it possible for the average Rwandan to live in a decent home, access quality healthcare and basic infrastructure (i.e., water and electricity) and educate their children. The eighty per cent (80%) of Rwandans living in rural areas stand to benefit the most from this transformation.

Is such a metamorphosis possible? A recent OTF Group survey offers some interesting data. In September 2005, the OTF Group surveyed a cross-section of 300 Rwandans from the country's five main regions, Kigali, Butare, Ruhengeri, Kibuye and Kibungo. The survey asked for their views on the economy and economic development.

Most respondents thought such a metamorphosis was possible. Seventy per cent (70%) of respondents believed that the average Rwandan would enjoy a higher standard of living in 5 years. Moreover, eighty two per cent (82%) believed that the majority of Rwandan businesses will be much more competitive in the world market in five years.

This may sound overly optimistic. Are these Rwandans engaging in wishful thinking or is a real metamorphosis underway? The economic statistics of the past five years points towards a true metamorphosis.

First, Rwanda's economy has grown by an average six per cent since 2001, a strong performance considering rising oil, energy and food prices. Second, Rwanda's goods exports are poised to reach $123m in 2005, up 25% from 2004. This export level would be the highest recorded since 1990. These export statistics do not include tourism, another strong growth area.

Sometimes I meet skeptics who respond to this performance by calling it a mirage. For one, they point to high and raising energy and oil costs. Other challenges include a weak private sector, high logistics costs, limited qualified human resources and the like.

These skeptics are mostly right about Rwanda's challenges, but they are missing the point. We should be less worried about Rwanda's challenges, than about its ability to conquer those challenges. What really matters is Rwanda's ability to win its struggle for prosperity.

The ongoing transformation of Rwanda's coffee industry suggests it is possible. In 2002, this industry chose to migrate from commercial coffee towards high quality fully washed Arabica. Today, coffee cooperatives and entrepreneurs such as Maraba and COOPAC make headlines selling their specialty Arabica to Starbucks, Green Mountain Coffee and the like.

Coffee farmers are benefiting. Last year one kilo of cherries sold for RWF 110 three times the 2001 price. As a whole, Rwandan coffee exports reached $37m in 2005, up to sixty eight percent since 2001. A similar transformation is ongoing in Rwanda's tourism industry.

While the caterpillar's metamorphosis is a natural effortless process, transforming Rwanda requires the best the nation can muster.

Rwanda is still in need of continued support of the international community, tailored to its real needs. But, Rwanda's government, businesses and civil society have the biggest roles to play in building a prosperous Rwandan society.

How can Rwandans build on the present momentum to bring into reality this vision?

First, Rwanda's Government is now renowned for sound leadership, good governance and courageous reforms. It must stay the course. There is no substitute for a sound business strategy, public-private partnership and sustained investments. The successful competitiveness model in coffee and tourism needs to be expanded to other industries such as Mining, Tea, Horticulture and Hides & Skins.

The Government must increase its focus on implementation. Effective implementation requires greater ownership, reinforcement of institutional capacity and coordination. The ongoing government reform is an opportunity to address those critical challenges. The Government must also continue investing in the economic infrastructure and build human capacity.

Second, firms compete, not nations. Rwandan businesses must build sophisticated products tailored to the needs of demanding customers. Rwandan businesspeople must relentlessly ask themselves one critical question: "What am I going to sell, to whom, and why will they buy from me?" Businesses must also learn to cooperate to compete. Investments in training, ICT and strategy will separate the winners from the losers.

A recent positive development is the launch of a national Business Development Services (BDS) network by the Rwandan Private Sector Federation (RPSF). Located in each province, these BDS centers offer training, information, financing and consulting to SMEs and cooperatives. These services will play a tremendous role in building competitive individual businesses.

Last but not least, achieving Vision 2020 will require Rwanda to increase productivity of its citizens becoming, de facto, a knowledge economy. Building a knowledge economy is about individual empowerment. Each Rwandan will need to acquire and continuously horne relevant skills to increase his or her own productivity.

There is good news. First, forty five per cent of Rwandans are less than fifteen years old. These youths are the engine that can transform Rwanda into a knowledge economy. Rwanda must capitalize on their hunger for knowledge. Second, the advent of the internet accessible in rural tele-centers will make it easier than ever for these youths to learn.

Three months ago, I was invited to speak to Rwandan leaders about the country's growth prospects. One courageous participant asked me whether or not I believed Vision 2020 could be achieved. A sudden murmur in the room told me he had asked aloud a question everyone else was thinking about. My answer to him was that I wholeheartedly believe Rwanda could achieve Vision 2020.

We are sometimes reluctant to believe in progress. But the evidence is unmistakable. Rwanda's economic performance has already markedly improved over the last few years.

Most importantly, Rwandans themselves have been at the forefront of the ongoing metamorphosis. Scientists often stress that metamorphosis requires a unique combination of favorable factors. Rwanda has created the right conditions for its metamorphosis to continue. Every Rwandan should be proud of these achievements.

Should Government, businesses and civil society stay the course, Rwanda will win its struggle for prosperity.

In this New Year 2006, my wish for Rwanda is unique: Prosperity and Vision 2020!

Eric Kacou is a Director with OTF Group, a US based competitiveness and strategy firm. Based in Kigali, Mr. Kacou currently leads the Rwanda Innovation and Competitiveness (RNIC) program. The RNIC is a Government of Rwanda program to develop the competitiveness of key exports and reinforce economic institutions.

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