Last year, Rwanda woke up to the fact that it was approaching William Rostow’s second stage of economic growth known as the preconditions to take-off. In this stage the economy shifts from traditional modes of existence and begins committing itself to secular education. This stage also enables a degree of capital mobilisation, especially through the establishment of banks and currency that an entrepreneurial class forms. Another underlying assumption is that the secular concept of manufacturing develops but only a few sectors develop at this point. It is not coincidental therefore that in 2007, stories about the number and quality of universities in Rwanda made many front page stories in papers. Some questioned the qualifications and general competences of some lecturers to meet required standards as set by the Rwanda National Council of Higher Education (the council itself set up in 2007). The fact that the education sector raised many issues such as government scholarships, student loans and many more, is evidence that human resource development is at the centre of Rwanda’s policy drive. Dr. Jean d’Arc Mujawamariya minister for Education says there are 14 universities in the country now. This also indicates how Rwandans are hungry for skills and have realised the value of an educated society. It will help them secure jobs in the service sector that is currently the highest contributor to the Gross Domestic Product (GDP) growth with Frw176.5b compared to the agricultural sector which accounts for just Frw573.3m despite employing the of majority Rwandans. The desire to mobilise capital for the growth of the service sector was a major issue last year and it was supported when the central bank made regulations that allowed operation of venture capital funds; this subsequently led to the entrance of Rwanda Enterprise Investment Company-RIEC and the partnership between BCR and South Africa’s GroFin. Michael Kaggwa, a senior official at RIEC, says his company exists to help early stage companies to access the capital they need to get themselves off the ground. If people have great ideas but no capital they come to us. We help expand areas of the market which have been either too risky or too little understood to attract investment, galvanising the economy and making it dynamic in a way banks just cant-because we have lot to lose, Kaggwa says. Commercial Bank of Rwanda (BCR) in partnership with South Africa’s GroFin also launched a venture capital fund worth $43m. David Kuwana Managing Director of BCR says the fund will help in financing projects that have a vision to expand and grow products for export. We want to finance small and medium scale enterprises that would like to grow into corporate companies, Kuwana says. Therefore as the government emphasized increased investments in the service sector, the motivation was more out of function than inspiration. All these factors were at the center of President Paul Kagame’s speech to the business forum of the Commonwealth Heads of Governments and Missions meeting in Kampala in November 2007. The speech was lauded by commentators as a major highlight of the event and showed President Kagame’s position as one of the most visionary of world leaders. In his speech, the president called upon regional and developing countries to find means of retaining skilled labour. He also called upon East African community partner states not to be limited to a 12 hour working day. Rwanda Investment and Export Promotion Agency (RIEPA) has just released its 2007 report which indicated that the service sector outstripped other sectors bringing in a total of Frw173.5b and creating 3,290 jobs, while the next sector construction-brought in only Frw13 billion. Kagame’s passionate appeal to investors in all his tours was fruitful to Rwanda by contributing towards the growth of the service sector-which provides huge market opportunities in the region as the owners of Serena group of hotels and MTN can testify. Rwanda’s unique position is the commitment of the government to invest in an efficient ICT sector that will reduce the time and cost spent in dilly dallying with long and tedious red tape. The investors listened attentively and many packed their bags and came-prompting US prestigious satellite television CNN through their broadsheet magazine; Fortune to write several reasons why western executives were interested in Rwanda. Dubai World came and is set to invest $230 million in tourism. They are reported to be planning to redevelop the golf course in Nyarutarama to international standards, build 300 upscale housing apartments and a five star hotel, an eco lodge in Nyungwe and many other projects. Rwanda in 2007 was also recognised for its ambitious desire to rollout ICT coverage throughout the country. In the article; ‘Why CEOs love Rwanda’, Rwanda was praised by Francoise Brougher, a senior executive with Google, for the seriousness with which the government has pursued investing in IT infrastructure, the same way governments invest in roads. With the UN-sponsored Africa Connect Summit taking place in Kigali in October, Rwanda’s ICT strategy can’t be emphasized further. As a result President Kagame’s tours abroad and warm embrace for investors have led to the creation of a small class of millionaires; people who were speculative earlier enough to build houses near and around Nyarutarama, a Kacyiru, and other Kigali suburbs. Many plots in this area have been bought off by investors willing to set up multimillion investments. On the other end, RIEPA officials were smiling all the way to the airport to receive business executives flying in to attend the annual international investment conference which will be remembered for showcasing an ambitious master plan for the new look of Kigali City which will stretch through the Free Trade Zone area along Kabuga to Rwamagana. As a result, the Eastern Province town will soon be the hottest city to live and work in thanks to the high number of US high profile investors including Quincy Jones and other high profile business entities interested in investing there. Again Dubai World features prominently in the region with its proposed expansion of facilities in Akagera National Game Park. Africa’s leading banks were not left out in the scramble for investment opportunities in Rwanda; Access PLC and Ecobank made grand entrances, acquiring some of the biggest local banks like Bancor and BCDI respectively. The banking sector has since changed and will certainly never be the same. According to Rostow, the preconditions for take off can exist from ten to fifty years; because there are limited economic techniques available and so these restrictions create a limit to what can be produced because there is limited production function, and therefore limited output. 2007 provided reason for opportunism for a bright future for Rwanda. For the cynics who see the Rwanda’s glass of opportunities as half empty as they roll out statistics issued by God cares what international organisation, they will be happy to learn that even in huge economies like England according to the 2007 housing report, stated that 268,000 children in that country share a bedroom with their parents, while 98,000 British children sleep in kitchens and even bathrooms. It is important to note here that the preconditions for take off can take up to 50 or more years. Many of you reading this will need Rwanda’s life expectancy to double to witness another stage of economic development in Rwanda.Ends
