I had the humbling privilege of calling the beautiful and scenic country of Rwanda home this year and actively immersing myself in various inspiring activities across its vibrant startup and tech ecosystem. I love how Rwanda firmly and aggressively cemented its position as Africa's leading and most ambitious hub for technology, innovation and entrepreneurship in 2023.

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From my participation in the UNLEASH Innovation Lab, Mobile World Congress, Norrsken Africa Week, Africa&039;s Business Heroes, Kigali Founders Happy Hour, DevFest Kigali and a host of others, I could see massive energy sparking across the innovation ecosystem. And this development is no surprise at all.

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Crucial to this emergence is the government's hands-on, progressive and collaborative approach to powering innovation. Over the past decade, this small, landlocked nation, known as the "land of a thousand hills," has embarked on proactive initiatives and business-friendly reforms to transform its digital economy and boost its regional competitiveness. Such sweeping reforms include tax incentives, special economic zones, and visa policies targeted towards tech companies and investors. Of course, all these and more made the local ecosystem considerably advanced and made remarkable progress over the past year, resulting in the influx of startups, growing interest from investors, and a big push to attract private capital.

The watershed moment for homegrown innovation in 2023

One of the significant milestones I witnessed this year in Rwanda was the official inauguration of Norrsken Kigali House, born out of a Swedish global impact fund's first hub in Africa and with roots in Rwanda. With investment worth $20 million and state-of-the-art facilities, the facility houses a community of over 1,000 entrepreneurs, innovators and business professionals, further strengthening Rwanda's credentials as a launchpad for high-growth and high-impact startups. I also observed how homegrown innovation thrived and rapidly rose, with over 200 local tech startups now based in Kigali.

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According to data from Statista, Rwandan tech startups raised $1.91 million in 2022 with only 18 funding deals closed. However, it was also lower than 2021&039;s funding value of $6.88 million. But 2023 has been a lot better with more fruits to bear. Several Rwandan startups secured major funding rounds and global recognition in 2023. Insurtech startup, Eden Care, became the first Rwandan startup to be accepted into the renowned Y Combinator accelerator programme in Silicon Valley. E-commerce platform, Kasha, also raised $21 million in Series B funding to expand across Africa. Both are prime examples of the rising quality of tech ventures within the country. Tech investments have indeed been on the rise, as the state-backed $30 million Rwandan Innovation Fund also continues providing catalytic capital to nurture early-stage local ventures and innovators.

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Government reforms attract international interest

While Rwanda doesn't have a large market size compared to other countries, I think a key aspect of its investment promotion strategy is positioning itself as a "proof of concept" country where startups can pilot and prototype their innovations before scaling across the continent and globally. And the government has invested heavily in modern infrastructure, including roads, security, green energy, broadband internet coverage, and world-class academic institutions like the African Leadership University and Africa's campus of the Carnegie Mellon University for talent development to support this goal. Tech companies like Zipline even used Rwanda to demonstrate the viability of their innovations before expanding to other markets.

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This year alone, government incentives enticed the biggest Pan-African players to expand into its market — particularly through frameworks created by the Kigali International Financial Centre (KIFC) to position Rwanda as a leading gateway for entering the African fintech market. For instance, Flutterwave, Africa’s leading payments technology company, chose Rwanda for its East African settlement hub, capitalising on the country's friendly regulations for payment firms. Chipper Cash also kicked off Rwandan operations, while Paystack confirmed Rwanda as a key expansion market for 2023 and beyond. Global artificial intelligence firm, InstaDeep, cited Rwanda's progressive approach to technology policy as a critical factor in selecting Kigali for its new African research lab. These expansions validate Rwanda's strategy of being a fertile land for international companies seeking to expand into the broader African market and wants a stronger footing.

In 2023, Rwanda also hosted high-profile events that boosted its global innovation credentials and market readiness. For example, the Inclusive Fintech Forum convened top African fintechs and investors to discuss the future of financial inclusion, Norrsken's inaugural Africa Week positioned Rwanda as a fast-growing impact investment hub, and UNLEASH Rwanda gathered social innovators from 136 countries for an Innovation Lab to ideate SDG solutions to the world's most complex challenges. Major tech startup competitions like Hanga Pitchfest 2023 also generated buzz around the innovation drive of young entrepreneurs across the country— complementary to Rwanda Coding Academy (RCA), a unique tech high school established by the government to boost local talent development.

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Predictions: The road ahead in 2024

As we draw 2023 to a close, I couldn't help but imagine what 2024 will look like for this promising ecosystem as a member of Rwanda's international community based at the heart of the Kigali Innovation City. So, looking ahead to next year, I expect Rwanda's rise up the African innovation ladder to continue scaling greater heights. I also expect Kigali's stature as a Pan-African fintech hub to grow as more players leverage Rwanda's regulatory harmonisation for licensing and expansion — particularly in green finance for climate innovation as Rwanda transitions into a greener economy with support from the IMF’s Resilience and Sustainability Trust. I also have high hopes for the newly unveiled Hanga Agritech Innovation Challenge Fund, in partnership with the World Bank and worth $2 million, to bet on scaling agriculture technology startups in the country.

More than ever, Rwanda has a long path ahead to build a truly vibrant innovation ecosystem. And I predict that the over-reliance of the ecosystem on the government to feed innovation will steadily reduce in the new year. There will instead be an organic, entrepreneur-led culture of innovation to accelerate the ecosystem's development — and I expect communities like ALX Rwanda, CCHub Design Lab, Startups in Rwanda, and others to be at the forefront. Also, as stiff competition from other African countries and ecosystems persists, I expect that Rwanda's small domestic market size will start prompting local startups to look beyond its borders and expand into other African markets while aiming to sell to a global market.

As Rwanda strategically continues cultivating a thriving culture of innovation, I also predict that the government will recalibrate its dominant involvement in directing innovation with radical shifts to ecosystem design thinking to catalyse better commercially viable and global-facing ventures from its growing talent pool. In 2024, I see tremendous potential for Rwanda to become a hub for global solutions, not just consumer businesses. By doubling down on market scaling, I foresee homegrown ventures winning for Rwanda on the global stage.

Rwanda has made impressive investment strides in promoting a culture of innovation. But my understandable fear is sustaining this unprecedented momentum to consolidate upon the massive growth recorded. It's no gainsaying that this will require the Rwandan government to intensely continue to bridge gaps between translating ambitious policies into on-the-ground execution for the ecosystem.

While relevant authorities including the Rwanda Development Board (RDB) and the Ministry of ICT and Innovation have made steady strides, I think they still need to make more efforts to clarify legal and licensing policies around operating companies in Rwanda — particularly to encourage more local entrepreneurs and particularly international firms to set up shop in the country. And yes, streamlining paperwork must continue to be a priority to ease startup operations.

If Rwanda proactively rises to meet these anticipated yet avoidable challenges and risks, its grand aspirations of becoming a globally recognised African technology leader can inch even closer to reality in 2024. I firmly believe this will be an African success story unlike we have ever seen in history — creating a ripple-effect win for other emerging ecosystems across the continent. I can't wait to see what the new year holds for the innovation landscape here in my host country. Rwanda is an ideal African country for me and so dear to my heart; I am rooting hard for the country to win for Africa.

The author is a Kigali-based social entrepreneur and researcher