World Bank president Jim Yong Kim has said that Rwanda’s approach to encourage private sector investment is a sure way to build resilience and maintain growth.
Kim was speaking to the press at Village Urugwiro following his meeting with President Paul Kagame yesterday.
The two spoke at length about Rwanda’s development progress as well as the utilisation and impact of the bank’s funds in the country.
At a time when a section of countries are wary of what proposed budget cuts by the US administration could mean for their growth and economic stability, Kim said Rwanda’s approach has resilience and will maintain growth.
He said despite having limited natural resources, the country has implemented appropriate strategies for growth.
“I think that Rwanda is in a good position, they were a step ahead of everyone else and even though there are so few natural resources, they have managed their resources brilliantly and we think that the growth will continue,” Kim said.
Mid this month, US President Donald Trump proposed deep budget cuts that would touch funding for multilateral development funds like the World Bank by about $650 million.
The cuts are part of a broader effort by the new administration to step back from foreign aid which has led to wide spread fears of implications on developing countries who largely rely on the funds to fund their national programmes.
Kim said he had a discussion with Trump on the issue to make a case for the financing.
“President Trump has told me himself that he is very supportive of the efforts that we are doing. It is very relevant for Rwanda. Rwanda is making efforts to scale up investments by the private sector. In my discussion with President Trump, we talked about trying to bring more of the private sector and he said that it was a great idea,” he said.
The private sector investment approach was also an aspect of major focus during his public lecture at the Kigali Convention Centre.
During the lecture, while discussing the need to alter on approaches to development support, Kim said that World Bank Group would invest less in initiatives that can be done commercially by the private sector.
This, he said, also aims at de-risking countries as investments destinations to increase the interest by private sector leaving the government to concentrate on initiatives that cannot be done commercially.
Kim said having been a partner of Rwanda over the years and witnessed growth, they would continue to support in multiple ways, including in terms of ideas contribution and financing.
“We have been a partner in many aspects of Rwanda’s economic development and for us it is great that the country has clear ideas where it is going. We are bringing ideas to the table and financing to the table and we are glad to be here to witness the growth and innovation,” he said.
Sub-Saharan Africa economic growth projections
Kim expressed optimism in the economic growth of sub-Saharan Africa, which had its lowest growth in 20 years in 2016 at 1.6 per cent.
He said, although they were concerned about the dip in growth, the trends exhibited by prices of commodities as well as oil and gas, were promising for the region.
The optimism is, however, clouded by fears of impacts of spillover effects of uncertainties across the world such as the UK’s Brexit, policies in the US and elections in some European countries.
“The down side risks are significant though because there is still uncertainty around Brexit, policies of the US and elections in Europe. The uncertainty is not good especially for developing countries. We think that commodity prices will recover but never to the prices that they were in the period between 2004 and 2011,” he told journalists.
The Minister for Finance and Economic Planning, Amb. Claver Gatete, said that after Kim’s visit to Rwanda and a tour of some projects, it opened up conversations about continued partnership.
Gatete said the next step in the partnership would see the World Bank Group also work with the private sector to increase their role in national development and investment in more sectors.
Kim was in the country on a two-day official visit during which he visited the drone port in Muhanga District, the ICT innovation centre, kLab, and Digital Fabrication Lab, and Kigali Special Economic Zone.