World Economy

Rwanda Wants to Become a Middle-Income Economy

Rwanda Wants to Become a Middle-Income Economy
Rwanda Wants to Become a Middle-Income Economy

The tiny nation of Rwanda is pursuing a local technological revolution in a bid to transform its largely agrarian society into the equivalent of an African Singapore.

Since President Paul Kagame led his Rwandan Patriotic Front to power in 1994 after a genocide that claimed as many as 800,000 lives and cut economic output in half, the East African nation has pursued policies aimed at encouraging investment in and developing its ICT industry. The goal is for Rwanda to become a middle-income economy by 2020, Bloomberg reported.

The latest innovation was unveiled this week when Rwanda officially opened a methane-fired power plant on Lake Kivu to generate clean energy. The government’s commitment to technological innovation has helped double the industry’s contribution to the 1.53 trillion-franc ($1.74 billion) economy, according to National Institute of Statistics of Rwanda data. It may also ensure the landlocked, tea- and coffee-growing nation sustains growth that’s averaged 7.5% since 2000, according to the International Monetary Fund data.

“A lot of scientific research and technological innovation was required, even more than was realized at the outset,” Kagame said at the launch of the KivuWatt Methane Gas Power Plant on May 16. “Some even thought it was an impossible endeavor. But we are happy today that things have proved to be different.”

Rwanda ranks 11th out of 51 countries in an index that measures the drivers of internet affordability, according to the Alliance for Affordable Internet. The country has rolled out a national high-speed fiber-optic backbone in all 30 districts, while 4G LTE extends to 14 districts with plans to cover 95% of the population by 2017, Information and Communications Technology Minister Jean-Philbert said in a statement last month.

During last week’s World Economic Forum on Africa, which Rwanda hosted, the government announced plans for an “innovation city” in Kigali that will seek to attract and house technology companies and institutions to promote digital transformation in the country.

  Singapore Model

“They are pushing to be the most efficient and forward-looking, the most innovative’’ country on the continent, Dominic Barton, the global managing director of consultancy McKinsey & Co. said in an interview. “They have to be a bit like Singapore, because they don’t have the endowment that the other countries have.’’

Unlike many African countries, Rwanda doesn’t have significant deposits of oil or metals such as copper and gold like neighboring Uganda and the Democratic Republic of Congo do.

The KivuWatt methane project is currently the only gas-water extraction project operating in the world, according to ContourGlobal LP, the closely held US company that built the facility. It’s expected to produce 100 megawatts within three years as it extracts gas found in the lake’s deep waters to generate low-carbon emission power, reducing the risk of a catastrophic release of methane. The lake is situated near Mount Nyiragongo, an active volcano that could trigger an explosion of the gas.

Rwanda is also lining up other world firsts. United Parcel Service Inc. is funding a project in which drones will carry transfusion blood to remote rural areas. The Atlanta, Georgia-based company is working with California-based robotics maker Zipline and Gavi, the vaccine alliance, to start deliveries later this year.