Rwanda’s Infrastructure Development deserves some study. With 12 million people, barely $2 billion in total annual government revenues, not much more than a billion dollars annually available for capital expenditure, and a per capita GDP below $800, it’s quite easy to see that Rwanda is a decidedly low income country; with significantly constrained public sector resources available for development.
Yet, this small, landlocked, densely populated country, located as it is in an incredibly challenging geopolitical postcode has managed over the past 25 years to triple per capita income, achieving “high growth (which) has raised income levels and reduced poverty, (although) incomes and labor skills are still catching up to peers,” according to IMF’s latest review of the country’s economic performance..
By any measure (and despite some valid criticism of its statistical methods), a historically important economic miracle has been pulled off in Rwanda since the horrific its crisis in 1994– average annual public and private sector investment levels consistently higher than 20 percent of GDP per annum points to one of the more important sources of that growth.
Much energy has been expended in examining the political model that produces these outcomes (a very important area for consideration, and long may it continue), but that vital debate need not detain us today. My particular area of interest and expertise is in exploring the principles of economic governance that made these kinds of development outcomes possible.
Financing large infrastructure projects in Rwanda (Africa Finance Corporation has funded a power plant that is nearing completion, and we are now working on a new airport for the future) provides a vantage point from which to observe the approaches and principles that drive economic development and attract investment into the country.
How does Kagame do it? This is without a doubt, a deceptively simple question that is impossible to answer comprehensively in any kind of summary manner. Keeping aside the question of politics and state security (areas with evidently very little room for compromise), some common themes are easy to observe.
The first is a systematic approach to attacking development problems. It is impossible to overstate the importance of this seemingly innocuous original step. In the area of public infrastructure delivery in Africa, there are quite simply, no simple problems.
Taking the time upfront to scope out the multiplicity of interconnected factors that prevent or delay success in the implementation of a project (or a series of projects in any sector) is invaluable best practice. Often, a comprehensive and well-documented technical, commercial, legal and regulatory assessment will be the most proper instrument for achieving this.
Next, for each developmental challenge or objective, a carefully thought-through institutional framework is conceived of, with all the required parties for a solution mapped out. In practice, this will often lead to the creation and promulgation (or more often, when they exist already, restructuring and amendment) of appropriate institutions and legislation required for an effective intervention by the state. Extensive consultation with private sector, donor and development partners will also take place at this point in time.
Finally, it will not be unusual to observe that incredibly smart, typically quite young and very often female, citizens have been identified, recruited, trained and handed sufficient responsibility for driving the desired solution, within the context of an already well laid-out framework. From here on, development tends to take on a life of its own. The results are clear to see: remarkable public sector accomplishments and large private investments in the areas of education, technology, healthcare, tourism, manufacturing as well as infrastructure, combining to deliver the enviable and much-talked-about economic growth and poverty reduction.
More can be done evidently (this is still a poor country, with up to 40 percent of the population living below the poverty line according to some of the more critical, non-government analyses). And Rwanda is a small country with a peculiar history of its own, so caution is always necessary in reading results across to other African countries.
Critically, a major area of concern is in the area of sustainability, and the extent to which outcomes depend entirely on the currently applicable political system and leadership. But if our objective is to learn from economic development everywhere we encounter it, then there is a great deal of pedagogic value that must be taken from the work that has been done in Rwanda.
Some ambitious ideas for infrastructure development lie in the future of Rwanda. In particular, establishing communication by rail with important regional trading locations, and ultimately with a deep-water seaport on the coast would be a transformative development for the country’s economy. Already, the same energy and discipline that I have tried to describe above is being applied to this challenge, and with a lot of luck, more successes lie ahead.
FOLA FAGBULE
Fagbule is Senior Vice President, Africa Finance Corporation. His Twitter handle is @folafagbule
