Context

Rwanda has rebuilt since the genocide of 1994 to become a significant development success, achieving high growth, lowering poverty and reducing levels of inequality. Consistent economic policies over the 14 year period from 2001 to 2015 have contributed to this small landlocked country averaging real economic growth of around 8 percent per year.  With the support of DFID and other development partners, Rwanda has become known as one of the easiest places to do business in Sub-Saharan Africa, according to the World Bank.

According to the African Development Bank Real GDP growth in the first half of 2017 was an estimated 2.9%, down from 8.2% in the same period in 2016, due  to weak performance in services and industry. Services, which accounted for 46% of GDP, increased 6% in the first half of 2017, short of the 9% in the same period in 2016, due to contraction in trade and transport. Steady recovery in 2016 and higher commodity prices, particularly for coffee and tea, led to 5% growth in agriculture during the first half of 2017,  down from the 6% in the same period  in 2016. Agriculture accounted for 32% of GDP. Industry, which accounted for 15% of GDP, posted zero growth in the first six months of 2017, down from 10% in the second half of 2016, due mainly to completion of major construction projects and weak performance in mining and quarrying. Economic performance improved in the second half of 2017 and is projected to continue to do so in 2018, due to favourable weather conditions and higher commodity prices.

DFID Rwanda Strategy

Ending extreme poverty: UK aid has helped Rwanda to lift almost 2 million people out of poverty since 2005. The UK will continue to support the poorest and most vulnerable people to escape poverty and take control of their lives. The UK will have helped lift over 200,000 people out of extreme poverty by 2020. The UK will reach over 450,000 people through its nutrition programmes, and support 345,000 children to gain a decent education.

Building stability and institutions: The UK will support Rwanda to manage its public finances and help the government raise an additional £1.1 billion in tax revenue to further finance its own development. The UK will help to strengthen the accountability of the state to all of its citizens, and support a transition to a more inclusive, open society.

Economic development: The UK will invest in eliminating trade barriers to make Rwanda more competitive and help ensure future inclusive and sustainable growth. The UK aims to support a three-fold increase in the value of Rwanda’s exports by 2021. The UK will improve the capacity of financial systems and help create better economic opportunities for over 1.5 million people by 2020.

World Bank Doing Business

In 2018 the World Bank ranked Rwanda at 41 in the terms of the Ease of Doing Business, continuing a trend which has seen the country successfully put in place measures to improve the business environment. Rwanda is the Sub-Saharan Africa’s best performer (Distance to frontier score 73.4) after Mauritius (DTF 77.54), and is substantially ahead of the regional average score of 50.43.

Reforms in 2018 included:

  1. Dealing with Construction Permits: Rwanda increased quality control during construction by introducing risk-based inspections.
  2. Registering Property: Rwanda made registering property easier by implementing online services to facilitate the registration of property transfers.
  3. Protecting Minority Investors: Rwanda strengthened minority investor protections by making it easier to sue directors, clarifying ownership and control structures and requiring greater corporate transparency.
  4. Paying Taxes: Rwanda made paying taxes easier by establishing an online system for filing and paying taxes.
  5. Enforcing Contracts: Rwanda made enforcing contracts easier by making judgements rendered at all levels in commercial cases available to the general public through publication on the judiciary’s website.