Investment Policy Review - Rwanda - UNCTAD Virtual Institute

Investment Policy Review of Rwanda
The Government also rapidly initiated stabilization policies and a series of structural reforms aimed
at reducing poverty through private sector development. A poverty reduction and growth facility (PRGF)
was concluded with the IMF to support policy reforms in 1998-2002. It was extended in August 2002
until June 2006, and then again renewed for three years. The initial PRGF focused on re-establishing
macro-economic balance and creating appropriate tools and institutions to manage government policy. The
IMF provided significant technical assistance in the area of fiscal and monetary policy, financial supervision
and collection of statistics.
The second and third PRGF put increased emphasis on structural reforms and private sector
development to sustain growth over the medium term. A key measure, already initiated in 1996, is the
privatization programme, which has picked up pace in recent years. Much of the focus of the PRGF is
also on institutional reforms and capacity-building in administration, and the Government has committed
itself to update a number of laws and regulations affecting the investment climate and competitiveness.
Economic and social policy is guided by the Vision 2020 strategy, which the Government elaborated
through a wide consultative process with civil society and the international donor community. Vision 2020
defines ambitious goals for the country. It aims to turn Rwanda into a middle-income country by 2020
and achieve the United Nations’ Millenium Development Goals (MDGs), with significant improvements in
health, education, inequality and other social indicators of development (table I.1). The document provides
a sound evaluation of Rwanda’s current economic situation, constraints to development 3 and challenges
for the decades to come (box I.2).
Table I.1. Main targets of Vision 2020 and the Millenium Development Goals
2000 2010 2020
Real GDP growth (per cent, average) 6.2 8.0 8.0
Industrial sector growth (per cent) 7.0 9.0 12.0
Services sector growth (per cent) 7.0 9.0 11.0
Domestic investment (percentage of GDP) 18.0 23.0 30.0
GDP per capita ($) 220 400 900
Poverty rate (percentage living under $1/day) 64.0 40.0 30.0
Off-farm jobs 200 000 500 000 1 400 000
Urban population (percentage) 10.0 20.0 30.0
Population living on agriculture (percentage) 90.0 75.0 50.0
Literacy 48.0 80.0 100.0
Primary to secondary school transition rate (per cent) 42.0 60.0 80.0
Tertiary education rate (per thousand) 1.0 4.0 6.0
Life expectancy at birth 49 50 55
Infant mortality rate (per thousand) 107 80 50
MDGs, selected indicators (by 2015)
1. Halve proportion of people whose income is less than $1 a day.
2. Achieve universal primary education.
3. Reduce the under-five mortality rate by two thirds.
4. Develop and implement strategies for decent and productive work for youth.
Sources: Ministry of Finance and Economic Planning, Vision 2020 and United Nations.
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It identifies, among the main constraints: (1) the decrease of soil productivity and land pressure; (2) transport issues and other infrastructure
constraints; (3) the narrow economic base; (4) the low level of human development; (5) the lack of entrepreneurship; (6) the poor institutional
capacity; and (7) the social and economic consequences of the genocide.
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