Photo by Manuel Moses/IFC.

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Earlier this week, Rwanda commemorated the 25th anniversary of the genocide that killed roughly 800,000 of its people, mostly minority Tutsis. Few could have predicted a quarter century ago that Rwanda would today be among Africa’s most peaceful, orderly, and fast-growing countries.

Yet the tragedy—instead of paralyzing the country—galvanized soul-searching social and economic changes that have inspired its phoenix-like ascendance.

On his recent visit to the Rwanda for the Africa CEO Forum, IFC’s Chief Executive Officer Philippe Le Houérou visited the Genocide Memorial in the capital, Kigali. The emotional visit offered more than a history of the conflict. It also revealed a much broader context for how far the country had progressed since 1994.

“The leadership of Rwanda had great vision to end the cycle of violence after the genocide. They resisted temptations to seek revenge,” said Le Houérou.

The country instead turned its focus to rapid development following the national tragedy. The government, headed by President Paul Kagame, led the post-genocide economic recovery efforts, initially through large public investments in critical infrastructure for improved service delivery that were mostly financed through external assistance.

These efforts have borne fruit over time. In the last decade, Rwanda has experienced sustained high growth and poverty reduction. Economic growth averaged 7.5 percent between 2008 and 2018, while per capita GDP grew at 4.7 percent annually.

Poverty decreased from 58.9 percent of the population living below the national poverty line in 2001 to 39.1 percent in 2014, with more than a million people lifted out of poverty. The country has also recorded a two-thirds drop in child mortality and achieved near-universal primary school enrollment.

The government has more recently shifted its economic policy toward private sector-led growth. In 2006, the World Bank Group’s Doing Business Report ranked Rwanda 139th globally in the ease of doing business. The country embarked on a series of reforms to improve governance across the board and to open its economy.

Rwanda privatized key sectors, such as tea, coffee, and ICT, including the Poste, Téléphone et Télécommunications company. It also formed the Rwanda Development Board by merging eight different agencies and cutting bureaucracy. The Development Board is a government department that integrates all agencies responsible for the attraction, retention, and facilitation of investments in the national economy.

“For investors, the Rwanda Development Board is truly a ’one stop shop’ as opposed to ‘one more stop’ that we see in some countries,” Le Houérou told business leaders assembled for the CEO Forum.

This year, Rwanda ranked 29th in Doing Business’s global ranking. With the ongoing support of IFC Advisory Services, the country has jumped a remarkable 110 places in just 13 years and is among the top ranked for ease of doing business on the continent.

Rwanda’s journey is far from over, however. The country is now aiming to achieve upper middle-income status by 2035 and become a high-income country by 2050 under a “Vision 2050” plan that is being crafted. These aspirations translate into average annual growth rates of over 12 percent (over 10 percent in per capita terms), requiring Rwanda to grow faster than China or Korea at similar stages of their development.

It is a tall order, but Rwanda is confident of success. Le Houérou said that Rwanda shouldn’t be underestimated. He also said that the country’s experience in building economic growth should provide lessons not only for other developing countries but also for IFC and other development finance institutions.

At the Africa CEO Forum, Rwanda’s President said that political and business leaders throughout Africa could support economic growth by adopting a different “mindset.”

“The key factor in all of this is mindset,” Kagame said. “It might be difficult, but we can afford to affect it. Mindset has no price, yet nothing has greater value.”

Published on April 12, 2019