Investment: Rwanda prepare for a brighter future

Tuesday July, 20, 2010

Rwanda is investing in innovative agriculture, methane gas, fibre optics and ice tea in a bid to become a middle-income economy by 2020, the country’s foreign minister said on Monday.

Rwanda hopes to push economic growth ahead of rates in neighbouring countries with investment in new agricultural production aimed at raising food and export output.

"Agriculture in the last 3 to 5 years has been the driver of our economy," Rwanda's Foreign Minister Louise Mushikiwabo said.

Agricultural output has been the main engine of the economy, expanding 7.1 percent in the same comparison.

"For years Rwanda had been farming in a very traditional, primitive way, but we have now introduced some policies that involve farming crops that work in particular areas and farming intensely. We have moved from just planting and producing coffee to producing gourmet coffee."

Due to commodity prices drop and global recession, Rwanda's economic growth is forecast to slow down to 6.5 percent in the 2009/10 fiscal year, from 8.6 percent in the previous period, according to government estimates.

In nominal terms, the gross domestic product of the country is about $5.7 billion or 3.33 trillion Rwanda Francs, according to the International Monetary Fund.

"We are also looking at areas such as ice tea. For a country that is landlocked, that has proven to be a very positive thing," Mushikiwabo said.

The minister said Rwanda is now laying optic fiber throughout the country and is set to exploit methane gas in one of the lakes as the country lacks natural sources of energy such as crude oil.

The country, which signed its largest ever investment deal with Canadian firm ContourGlobal for a 100 MW methane gas project worth $300 million in 2009, is looking to export electricity to neighbouring countries.

According to the minister, Rwanda, a densely populated country of more than 10 million, is encouraging its people to "go into technology" as a way to increase job opportunities.

"We're also integrating in the eastern African community which then moves our size from 10 million people to 130 million people. So we are doing a number of things to become a much more attractive investment destination.

The East African Community is an intergovernmental organization of five African countries – Kenya, Uganda, Tanzania, Rwanda and Burundi – comprising 126.6 million people and a combined GDP of $73 billion.

Rwanda's ranking as a top global reformer in the World Bank's "Doing Business" Report last year boosted investor confidence and mitigated the worst effects of the crisis.

Rwanda was the first sub-Saharan country to win the award, based on reforms it introduced in 2008.

"We have been very successful, giving the recent history, in attracting investors. Rwanda has enjoyed incredible security after the genocide in the region," said Mushikiwabo.