Rwanda: Country of a thousand opportunities
By Thomas N. Jiji
In its modern evolutionary history the tiny sovereign state of Rwanda in Africa was known initially as a country of a thousand hills, becoming a country of a thousand problems, while today this densely-populated state in the heart of Africa is more and more wearing the description of a country of a thousand opportunities.
Rwanda’s renewal is most evident in the ‘buzz’ of entrepreneurs flooding into Kigali, of foreign corporations jostling for a slice of what some are calling an ‘economic miracle’. ‘It’s amazing how in eighties our experts saw passion fruit as the only potential driver of the economy of Rwanda’, a former IMF official remarked as we drove to Gisenyi on the picturesque Lake Kivu, whereas today we are experiencing an economic awakening of truly astonishing diversity.
Rwanda comprises just 26,338 sq kms of territory in the Great Lakes region of central Africa. After independence from Belgium in 1960, the country was wracked by periodic bouts of ethnic bloodletting, culminating in the 1994 genocide which claimed around one million Tustis and Hutu moderates. The genocide was brought to an end by the Rwandese Patriotic Front (RPF) under the military command of the country’s current head of state, President Paul Kagame.
Over the next decade, Rwanda fought on its western border with Congo, a violent insurgency of Interahamwe militia, largely responsible of the horrendous 1994 genocide that came to an end in 2003.
In the past ten years Rwanda has astounded many of its harshest critics by creating a model of peace and stability in one of the most war-torn regions. In parallel with national reconciliation, Rwanda has transformed its economic fortunes and now punches far above its weight diplomatically, both within the continent and globally.
Not all critics’ charges can be easily dismissed. Rwanda’s media, for instance, is not nearly free as it ought to be. Nevertheless, its achievements are nothing short of remarkable considering its recent upheaval:
- World’s fastest global reformer ( World Bank ‘Doing business report’ 2010)
- Top country in sub-Sahara Africa on the World Economic Forum’s competitive index( 2011);and
- Least corrupt country in Africa after Botswana, Cape Verde, and Mauritius according to Transparency International ( 2011)
This is an astonishing achievement for a country which has only recently in an historical context emerged from the horrors of genocide on an industrial scale. How could this have been possible? How could a tiny country which had been on its knees so recently, now be ranked higher than China and India on the World Bank governance indicator of political stability?
I recall a conversation we had with Nobel laureate Oscar Arias Sanchez, who served two separate terms as President of Costa Rica. I asked him to what he attributed his success as president, and he replied in a soft but confident voice: “Leadership is about choice and the willingness to fight for what you believe in, without compromise”. That statement still resonates profoundly with me as I observe the volatile political landscape of Africa on a daily basis.
No leader has been more decisive in the history of an African country than Paul Kagame, indeed for all the naysayers’ criticisms of his style of his leadership of a hardnosed, ruthless leader who brooks no nonsense, a man hard to himself as anyone around him; can anyone seriously imagine what this country might look like were it not for his unflinching commitment to its political survival and recovery?
Known as ‘President and CEO’ , Kagame has boldly steered Rwanda away from the scourges of corruption and cronyism which have become rooted in the fabric of all too many African countries, among them many new ‘democracies’. Often forgotten is the fact that he inherited in 1994 not just a genocide-ravaged society but also a desperately poor country, with 90 percent of the population engaged in subsistence farming. He wisely called on a host of international experts and advisors to address the country’s manifold economic challenges with the aim of transforming Rwanda in just few decades into a middle income country, shifting from agriculture to a knowledge-based society.
The results speak for themselves. Rwanda’s GDP has grown on average 7% annually since 1994. Inflation has been curbed, exports taxes abolished, trade liberalized. Its new constitution protects free repatriation of capital and profits. Public entities have been restructured and privatized, while the central bank is independent and assertive.
Rwanda is positioning itself as a hub in the increasingly integrated East Africa region, a market of some 125 million people with a combined GDP of over USD 70 billion. The East African community, comprising Kenya, Burundi, Tanzania, Rwanda and Uganda, has established a customs union in preparation for monetary union and ultimately a political federation.
Rwanda intends to be at the heart of the region’s transformation, in part through major infrastructure projects, including:
- a $4 billion railway linking the Dar Es Salaam port to Rwanda-Burundi-via Congo to the Southern African cape gauge railway network;
- a $300 million phase-one new airport at Bugesera, 40 km from Kigali;
- a concession of 55 billion cubic meters of methane gas to generate electricity and conversion of gas to liquid.
- Coffee is Rwanda’s primary foreign exchange earner, but that is set to change on the back of advanced explorations and developments in the mining sector, especially gold, tin and tungsten.
For all Rwanda’s impressive economic gains, they pale beside the remarkable reconciliation forged in the genocide’s aftermath, primarily between Hutu and Tutsi ‘De-ethnicising’ a country that so recently succumbed to systematic ethnic killing on a scale comparable to the holocaust was always going to be a formidable challenge, but no one could have predicted how quickly the desire for a common Rwandese identity could be rekindled in the minds of the population. Much of the credit must go to the countless ordinary Rwandans who have participated in the gacaca courts – the traditional Rwandan system of community justice.
Over a decade ago Rwanda was a poster-boy for the ‘hopeless continent’. Yet just as that phrase has now been repudiated by the august publication that coined it, Rwanda has also defied all predictions of economic and social catastrophe to emerge as an inspiring model – and perhaps not only for Africa.
Thomas.N.JIJI, is an African entrepreneur and an associate at the Brenthurst Foundation, a leading think-tank specializing in economic growth strategies for Africa.
Rwanda has clear legislation regarding mining and exploration. A new Mining Policy was adopted in 2009 in order to:
- Strengthen the enabling legal, regulatory and institutional environment
- Develop targeted investment and fiscal and macroeconomic policies
- Improve sector knowledge, skills and best practices
- Raise productivity and establish new mines
- Diversify into new products and increase value addition
The Ministry of Environment and Lands has overall responsibility for the mining sector while the Rwanda Geology and Mines Authority (OGMR) is responsible for the management and functioning of the mining industry. Specific duties of the OGMR include:
- Conduct surveys in geology and mining and publish research findings
- Promote technology aimed at development of geology and mining
- Establish the value of projects
- Establish the mining standards
- Training of employees
- Monitor mining operations , trade and value added in mining
- Participate in formulation of policies, laws and strategies
The mining law currently recognizes the following mining rights:
- Prospecting licenses are available for periods up to two years and are limited to areas of 1000 square kilometers.
- Research licenses are available for up to 4-year periods, with one renewal. Research licenses are granted for areas up to 2 square kilometers and are transferrable. At the end of the research license period, the licensee must provide the state with a report regarding the findings of the research.
- Small mine exploitation license sare available for renewable 5-year periods. The license is limited to an area of 2 square kilometers and depth of 40 meters. Small mine exploitation licenses may be transferred.
- Vast mining concessions are available for 30-year, renewable periods. The concession area is subject to a minimum size of 100 hectares and maximum size of 400 hectares.
- Quarry exploitation licenses are available for renewable 5-year terms for areas up to one hectare
All licenses require environmental statements. TransAfrika Rwanda Gold SARL, has acquired two exploration permits in Rwanda issued under the terms of the law of 27 April 1971 modifying the Mining Code of 30 January 1967, but at present being regulated by the new law No 37/2008 of 11/08/2008 on mining and quarry exploitation. These exploration permits are treated as research licenses (although much larger in size) are valid for four years and once renewable.
Mining in Rwanda has continued to gain significance as a source of export revenues. In 2010 the country earned USD67.8M from mineral exports which constitute 15% of total exports. The mining sector keeps on improving and in the first quarter of 2011 the mining sector earned the country USD35.5m. Projected earnings per annum amount to USD256m by 2015. Currently the country produces about 9% of the world’s tantalum and 4% of the world's tungsten. For 2010 the important mineral exports were:
- Cassiterite (tin ore): 3,874 tons valued at USD42.2m
- Coltan: 749 tons valued at USD18.5m
- Wolfram: 843 tons valued at USD7.1m
Gold is currently being mined in the informal sector and there are no reliable statistics on production.
The government is putting a lot of effort into encouraging the development of the mining sector and several foreign companies have licenses to explore for gold, nickel, cobalt, platinum and copper and foreign companies are increasingly dominating the mining industry.
The government of President Paul Kagame has introduced laws that encourage private investment, offer security of tenure, and contain provisions for international settlement of commercial disputes. The President has considerable support, both internally and externally.
Rwanda, a Belgian colony until 1962, today enjoys one of the most stable and effective governments in Africa. It is successfully dealing with the social and economic consequences of 30 years of authoritarian rule which culminated in genocidal warfare during 1994. The country has made numerous economic policy and regulatory reforms helping to achieve macroeconomic stability and annual GDP growth of 7.5%.