## Rwanda—Taking On the Future, Staying Ahead of the Curve

_IMF News, January 27, 2015_

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**Canonical URL:** [Rwanda—Taking On the Future, Staying Ahead of the Curve](https://www.imf.org/en/news/articles/2015/09/28/04/53/sp012715)

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## Bibliographic details
- Published: January 27, 2015

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### Introduction and framing
- Speech delivered by Christine Lagarde, Managing Director, International Monetary Fund, Kigali, Rwanda, January 27, 2015. As prepared for delivery.
- Three thematic anchors using Rwandan dances:
  - Intore (victory dance) — stock take of Rwanda’s success within a regional and global context.
  - Umuganura (harvest dance) — lessons Rwanda offers peers in Africa and the world.
  - Ikinimba — commitment to the future and policy directions for transition to a stronger, more diversified, and more inclusive economy.
- Emphasis on homegrown initiatives, inclusiveness, gender empowerment, and partnership with the IMF.

### 1. The Road from Mozambique — good news, some headwinds ahead
Key findings and context:
- IMF co-hosted “Africa Rising” conference in Mozambique brought together officials from 42 African countries.
- Many countries in Sub-Saharan Africa expanded at a healthy clip for ten years or more despite the Great Recession.
- Rwanda has grown at an average of about 8 percent since the early 2000s.
- Per capita income has more than trebled.
- Poverty remains high—at about 45 percent of the population.
- Sub-Saharan Africa is expected to post close to 5 percent, the region’s world’s second highest growth rate in 2015.

Downside scenarios and risks (enumerated):
- Persistently lower oil prices:
  - Benefit for oil importers (more household purchasing power, opportunity to reduce energy subsidies).
  - Increased external and balance sheet vulnerabilities for oil exporters.
- Monetary policy normalization in the United States:
  - Even if well-managed and well-communicated, potential negative effects for emerging markets and global financial stability; possible impacts on African economies.
- Persistence of geopolitical tensions (Ukraine, the Middle East, and parts of Africa) increasing volatility and vulnerability.

Policy takeaway:
- Sustaining growth is a first order priority—reignite where deficient, support where waning.
- Sound policy fundamentals are paramount, with country-specific policy specifics.

### 2. Rwanda today — a house in order, leading by example
Macro and social achievements:
- Rwanda is described as a dynamic economy with good governance standards; second generation reforms sustained and accelerated growth beyond the post-1994 rebound.
- Parliament composition: more than 60 percent of members are women — described as the world’s highest and more than double the average for parliaments in other countries.
- Women make up about 30 percent of ministers and half of Supreme Court justices.
- Girls have the same access to primary and secondary education as boys; Rwanda is well on its way to achieve the Millennium Development Goal for education.

Fiscal and external resource management (exact figures):
- Social spending on health, education and social protection is now about 13 percent of GDP, up from just 4 percent in 1999.
- Resources from foreign aid remain at about 15 percent of GDP.
- Fiscal space from debt relief was efficiently used to scale up priority spending.

Homegrown inclusive initiatives highlighted:
- Legal and institutional frameworks for gender equality (2003 Constitution, laws on land ownership and inheritance).
- “Complete farmer” approach to raise agricultural productivity and reduce rural poverty.
- Girinka program — the one cow per poor family initiative to combat childhood malnutrition.
- Umuganda — monthly civic contribution (last Saturday of every month) fostering social cohesion.
- Imihigo — performance commitments to improve governance and service delivery.

### 3. Taking on the future — staying ahead of the curve (policy priorities)
Three-pronged future growth model (enumerated priorities):
- Mobilize domestic resources to reduce dependency on aid.
  - Current tax collection effort is 16 percent of GDP.
  - East African Community target is 25 percent.
  - IMF engagement: technical assistance and capacity building in revenue administration and collection to broaden the tax base and strengthen administration.
- Encourage private sector development to reduce reliance on the public sector.
  - Rwanda ranked 46 out of 189 countries in 2015 Doing Business Indicators; in the top three sub-Saharan performers.
  - Reforms: cutting red tape for construction permits, easing access to electricity, strengthening legal rights of borrowers and lenders.
  - Infrastructure gaps in transportation, water and energy need critical projects to come on stream.
  - Financing approach: optimal combinations of financing sources—revenue increases and judicious external borrowing—while preserving debt sustainability.
  - Labor force skilling: emphasis shifting beyond primary education to secondary level education to capture demographic dividend.
- Harness regional integration to support export diversification and overcome geographic constraints.
  - Need to develop vibrant non-agricultural sectors; support household enterprises and small and medium sized businesses through targeted mentoring and access to finance.
  - For a land-locked economy, deeper engagement in the East African Community can provide access to larger markets and regional infrastructure projects (power generation and transportation).

IMF role:
- Continued financial assistance, policy support programs, and technical assistance to cement gains from macroeconomic stability and to support transitions toward middle income status.
- Partnership framed as “Africa partnering” committed in Mozambique and restated for Rwanda.

### Key statistics and exact figures (preserved)
- More than 60 percent (parliament composition: women).
- Average growth since early 2000s: about 8 percent.
- Poverty: about 45 percent of the population.
- Social spending: about 13 percent of GDP, up from just 4 percent in 1999.
- Foreign aid: about 15 percent of GDP.
- Women: about 30 percent of ministers and half of Supreme Court justices.
- Tax collection effort: 16 percent of GDP; East African Community target: 25 percent.
- Rwanda Doing Business ranking: 46 out of 189 countries in 2015.
- Sub-Saharan Africa growth outlook: close to 5 percent in 2015.

### Conclusion and policy message
- The reforms required to reach middle income status are ambitious but necessary.
- Continued focus on inclusive policies, mobilizing domestic revenue, private sector development, regional integration, infrastructure financing, and skill development are central.
- The IMF will remain a partner providing financial assistance, policy support, and technical assistance as Rwanda pursues development goals.

*Rwanda—Taking On the Future, Staying Ahead of the Curve by Christine Lagarde, Managing Director, International Monetary Fund, January 27, 2015.*

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## References

- [Republic of Mozambique and the IMF](http://www.imf.org/external/country/MOZ/index.htm)
- [Rwanda and the IMF](http://www.imf.org/external/country/RWA/index.htm)
- [United States and the IMF](http://www.imf.org/external/country/USA/index.htm)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [Christine Lagarde](https://www.imf.org/external/np/omd/bios/cl.htm)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp012715_