With digital transformation being continuously positioned as a key enabler for the country’s development agenda, is Rwanda ready for the transition?

A World Bank study and analysis on the subject shows that there is need to adjust approach in a number of sectors to make the most of the trend.

The digital economy assessment looked into five aspects of the ecosystem; infrastructure, skills; platforms, financial services and digital entrepreneurship.

Digital skills gaps are among the factors that still hamper the increase of digital adoption and innovation. 

Government estimates put computer literacy at about 8.4 per cent which experts say gets in the way of usage of basic digital devices and applications and keeps demand for more advanced tools and services low.

Computer literacy still locks out a big section of the population from adoption and use of digital platforms. This is partly due to lack of adequate training avenues for both academic and non-academic purposes.

"Gaps in access to key enablers in schools, including connectivity, digital devices, reliable electricity, digital content and adequate teacher capacity, continue to adversely affect both the integration of ICT in the classroom and delivery of digital skills training,” the report noted.

For instance, the skills gap is evident in that 25.1 per cent of primary schools and 41.3 per cent of secondary schools reportedly had access to the internet in 2017, which meant that ICT was predominately being taught in an offline environment, or in theory, with limited practical application.

Among the measures that government is using to address this is innovative partnerships to expand access to basic and advanced digital skills training such as Digital Ambassadors Programme as well as inviting globally acclaimed higher learning institutions such as Carnegie Mellon University and advanced private players in digital skills such as Andela.

A key priority

Claudette Irere, the Permanent Secretary in the Ministry of ICT and Innovation, said that digital transformation remains priority for government with many ongoing interventions.

Among the approaches she said include a focus on adoption and uptake to increase demand and use of digital services by citizens.

This she noted would include continued interventions to increase digital literacy across different levels of the population through initiative such as digital ambassadors’ programme.

Launched in 2017, the Digital Ambassadors Programme, locally known as Intore Mu Ikoranabuhanga, is an ambitious plan in which the Government targets to introduce five million citizens to digital literacy and opportunities through the use of e-Government and e-Business services.

Another key effort is the ongoing Connect Rwanda Challenge – a campaign which seeks to mobilise people to contribute to providing smartphones to Rwandans who cannot afford them is expected to drive up access to smartphones.

The campaign has a target of a million gadgets, Irere said will contribute towards government’s efforts of ensuring every household in Rwanda has access to a phone further increasing adoption of digital services.

The initiative which was launched by local telecom, MTN Rwanda, has earned a lot of support by institutions and individuals, including President Paul Kagame, who committed 1500 gadgets.

Financial inclusion

Despite the significant strides made and campaigns aiming at improving usage of technology to boost financial penetration, a large section of the population remains unconnected.

According to the National Bank of Rwanda, 51 percent of adults owned a mobile money account as of 2019.

However, according to the World Bank report, transactions via mobile money platforms remain basic, transfer of money as well as airtime purchase with more room need advancements in payment for goods and services.

"Banks are only just starting to enter the digital payments sector and have been slower to embrace digital channels and support innovation,” the World Bank observed.

"There is thus ample room to grow mobile money wallet adoption, increase transaction volumes/usage and expand the existing service offering, which could provide a meaningful way of boosting financial inclusion, but also facilitate the expansion of other e-transactions that rely on digital payments such as e-commerce,” reads the report.

While government has been playing an active role in advancements towards digital transformation, entrepreneurship in the digital ecosystem is yet to be seen.

In recent years, government has built critical support infrastructure for aspiring innovators and entrepreneurs through facilities such as KLab and Fablab incubation facilities and the establishment of the Kigali Innovation City, experts say that there remains limited viable start-ups as well as firms joining the ecosystem.

"There is limited support infrastructure for start-ups beyond a certain growth stage, including incubators and accelerators, which serve a crucial function in terms of facilitating access to skills, networks, mentorship, capital, technology and digital tools for start-ups,” the analysis further shows.

Funding gap

Isabella Hayward, a Digital Development Specialist at the World Bank, said that there is also weak access to growth-oriented financing for early-stage enterprises.

"Rwanda lacks many of the diverse funding channels available in more developed entrepreneurial markets, such as venture capital funding, angel investors, and seed stage investment,” she said.

Irere said that the Government is well aware of the need to seek ways to stimulate digital entrepreneurship to make the most of the attractive business ecosystem that exists.

The Government and the World Bank are involved in deliberations for potential support in investment policy operations that could boost digital entrepreneurship.

There is, however, an opportunity and room to build on Rwanda’s favourable reputation for being an easy, safe and stable place to do business encouraging more tech based firm to use Rwanda as their launchpad into East Africa.

However, it’s not all dull; Rwanda fairs well in aspects of digital transformation especially those that government has taken lead.

For instance, in regards to digital infrastructure, Rwanda has set the bar for the region in terms of mobile network coverage, access to international bandwidth as well as the roll-out and expansion of a national fiber optic cable.

While Rwanda’s expansion of digital infrastructure has been impressive the World Bank noted gaps in the uptake of high-speed internet services such as access to gadgets, affordability of internet and perceptions on value.

Rwanda was also cited as a model in regards to digital platforms owing to Irembo platform and multiple tech systems improving the delivery of key government functions such as financial management, public procurement, education and health.