Rwanda’s poverty remains an unbeaten war

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Various economics experts, International Monetary Fund, World Bank Doing Business reports  and many others have singled  out Rwanda  as one of the emerging economies to look out for in terms of investment opportunities, low level of inflation and economic growth. However, almost  its entire population is devastated by poverty.

According to recent statistics, the proportion of people who were poor in 2016-2017 was 38.2%, compared to 39.1% in 2013-2014. Poverty is still an issue nationwide where the main poverty line is set at Rwf 159,375 per adult equivalent per year.Then, around 4 millions of Rwandans starve not even use $on daily consumption and yet no hope to improve as the demographic transitional model forecasts the rapid growth of population endangers the common and sustainable development.

Rwanda is a nation which proves to be a role model for the continent under President  Kagame’s leadership

Her fiscal and social policies are widely touted by supporters and many in the international community as a blueprint for success in the region. Zero tolerance on corruption policy and accountability among officials can been considered the developmental milestone of the nation.

Rwanda is the second on the continent behind Mauritius in the latest annual World Bank Doing Business Report 2018. It is ranked the 2nd  as the most competitive economy on the African continent, the 7th most globally efficient robust governance and 1st Africa’s most efficient government.

Then, the status quo is that the economy of the country is in the hands of foreigners as it is still a drawback for nationals to partake in its developmental process in that system which is based on direct foreign investment (DFI).Big companies are owned by foreign investors.Mauritian investors currently have the most investments in the country with a majority of their investments spread in tourism, energy, wholesale and manufacturing.

As for  a Foreign Private Capital survey conducted by the Central Bank to determine the direction, magnitude and trends of Foreign Private Investment.Mauritius accounted for 25.8 per cent of Foreign Private Capital inflows for 2017 at about $117 million.

Significant achievement over the last two decades

Economy grew at an average annual Gross domestic product of 8 per cent for the last years.Growth of the GDP per capital in 2017 was $From $701 in 2013. Between 2001 and 2015 real GDP growth averaged at about 7.8 % per year. Rwanda was a low-income, agriculture-based economy,then,  it is now a knowledge-based, service-oriented economy. Life expectancy raised from 49 in 2008 to 67 years by 2017. Currently, the service is the largest contributor to the GDP. The sector contributes 48 per cent, followed by agriculture 31 per cent and the industrial sectors 17 per cent respectively. World bank projects the Rwandan economy to grow by 7.2% annual growth rate.

There is along way to go

Around four millions of Rwandans regularly go to bed hungry. They consume approximately Rwf 436 which  is not even $1. International standard states that a poor person  should consume at least $3.2 on daily basis.

.The proportion of people who were poor in 2016-2017 was 38.2%,compared to 39.1% in 2013-2014. Poverty is still an issue nationwide where the main poverty line is set at Rwf 159,375 per adult  equivalently per year. More than  12 millions populated the country, by then Rwandans grow at rapid growth. Birth rate stands between three to five children, this is a burden in developing country as income is still a crucial issue among Rwandans.

Earnings in Rwanda come from work in agriculture (as a farmer or farm labourer), in independent non-farm work from a wage and salary.Since then,  poverty affects people and children suffer from malnutrition which leads to Stunting and has implications for future productivity.

In the recently developed Human Capital Index (HCI), Rwanda’s score was 37 per cent implying that a child born today will only be 37 per cent productive relative to if they had attained complete education and health,there will be gap in market place.

By rounding up, Rwanda proves to be the role model for the continent by boosting its economy under Kagame’s leadership yet  poverty is still a burden and an unbeaten war.

One in three Rwandans is chronically hungry. Therefore, even if Rwanda  has economic growth, citizens still live poorer due to the cost of living which is high and no way to earn the incomes. Rwanda can set long term strategies to decreases  birth rate by improving education system, investing more in girls’ education and they should go for further studies so as to regulate birth rate, well implement job creation policies and not to copy advanced nations’way of living.

Agricultural sector can be prioritised and be given enough budget so as to fight against malnutrition, stunting and food insecurity.

 Etienne Mbarubukeye

 Economics and business reporter

 

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