Friday, December 09, 2016 9:59 AM / fdc
Friday, December 09, 2016 9:59 AM / fdc
Out of the Blue is a series focusing on how countries build capacity to achieve breakthrough results. In this edition, we examine how the visionary Rwandan authorities are positively transforming their economic landscape with technology-conscious policies and support for forward-looking high-tech solutions.
On October 13th, the Rwandan government, in partnership with California-based Zipline, launched the world’s first national drone delivery program. Compared to the Rwanda the world knew two decades ago, this event was a distinct contrast. Only 22 years ago, Rwanda was a crisis-ridden country torn along ethnic lines. Over 800,000 Rwandans were killed during the Rwandan genocide in 1994.
Today, Rwanda is steadily clearing a path through the rubble and gearing up to become Africa’s foremost technology hub. Drones now make hundreds of daily deliveries of critical medical supplies to 21 locations across Rwanda, digitally guided by a navigation system connected to Rwanda’s 3G network. Zipline’s drone service is a profitable business run on a national scale. While Rwanda’s government is strongly criticized on certain democracy and human rights issues, the technology revolution in Rwanda is undeniable – and the economy is better for it.
Land of a Thousand Hills – and a Million Economic Opportunities
Rwanda is today among the fastest growing economies in the world, accelerating from a contraction of -11.4% in 1994 to a growth of 6.9% in 2015. Annual growth rate in Rwanda averaged 7.66% from 2000 to date, hitting a record high of 13.4% in the first quarter of 2007. Between 1996 and 2015, Rwanda’s GDP per capita based on purchasing power parity (PPP) more than tripled to $1,758.73. A media report quoting the Rwanda Utilities Regulatory Authority (RURA) indicated that internet penetration in Rwanda was 33% in 2015, compared to less than 10% in 2012.
The internet is considered a critical public utility like water and electricity by the Rwandan authorities. This has expedited the government’s digitization drive, which is creating jobs for the future and boosting social gains. Development is slow but steady. Between 1990 and 2014, Rwanda posted annual growth in its Human Development Index (HDI) of 2.89% - the highest amongst countries with available data in the low human development category.22 This compares favorably to the 1.08% growth for sub-Saharan Africa (SSA).
Competitive Economy driven by Reforms
Rwanda ranks second in Africa after Mauritius, and 56th overall on the 2017 World Bank Doing Business Report - the same list on which Nigeria ranks 169th of the 190 countries surveyed. The service industry witnessed the most significant improvement on the back of technology gains.
In credit financing, Rwanda clinched second place in the world, while it was ranked fourth in property registration. The country improved six places on the Ease of Doing Business indices as well as the latest World Economic Forum’s Global Competitiveness rankings on which it came 52nd out of 138 countries. Substantial improvement was recorded in institutional development (13th) and labour market efficiency (7th), critical pillars of a strong business environment.
More than 40 countries, including Rwanda and Nigeria, have established regulatory reform committees that target the Doing Business indicators and guide regulators in their efforts. The World Bank re-cords that, in line with its Vision 2020, Kigali has implemented 47 reforms across these indicators since the 2005 Doing Business Report was published. In December 2015, the Ministry of Justice launched the Justice Sector Integrated Electronic Case Management System (IECMS). The automated system integrates five institutions of the Rwandan Justice sector involved in the processing of court cases. With the IECMS, the government is improving the delivery of judicial services to its citizens through the reduction of delays and transaction costs.
Korean-style Political Will
Rwanda’s leaders have a well-defined development strategy aimed at transforming Rwanda to a “knowledge-based, middle-income country” with “science and technology” as a “cross-cutting influence” to business and government by 2020. This is expected to transform the country from a low-income economy to a lower-middle-income economy by raising income per capita from $290 to $1,240 by the year 2020.
These resolutions are well documented in the government’s Vision 2020, which incorporated the National Information Communications Infrastructure (NICI) policy. NICI was a realistic digitization plan established in the year 2000 that set out Rwanda’s technology blueprint in four five-year stages.
The first stage (2000-2005) focused on laying the foundation for a solid information and communications technology (ICT) sector, through favorable institutional and regulatory frameworks. The second phase entailed enhancing ICT infrastructure through solutions such as centralized and cloud computing systems.
During the third stage, the government supported the improvement of service delivery through initiatives such as the One Laptop per Child program. In the ongoing final phase (2016-2020), the government is concentrating efforts on skills, private sector and com-munity development. Rwanda’s policy implementation phases bear some semblance to the transition stages of South Korea, a resource-poor country that transformed itself into a high-income innovation-driven industrial economy in 50 years, employing a technology-driven growth paradigm.
World-Class STEM Education
The quality of education in the fields of science, technology, engineering, and mathematics (STEM) is improving, as Rwanda takes steps to boost the future skillset of its workforce and its capacity for innovation. In 2012, Carnegie Mellon University, an American high-ranked university renowned for its expertise in information technology, established a campus in Rwanda, following invitation by the authorities. The university is pioneering education by practice, encouraging students to create solutions and develop strategies for real Rwandan companies. It recently received a $10.8 million commitment from the MasterCard Foundation that will sponsor 125 students from indigent families.
President Kagame has paid several visits to world-renowned universities including Massachusetts Institute of Technology (MIT), which is soon to set up a state-of-the-art climate observatory in the country. Rwanda’s technology hub is not only populated by software developers, as is seen in many African hubs. At the recently established innovation hub, FabLab, young techies are working on hardware development of IT products such as 3D and laser printers. Rwandan youths are assembling 'Made in Rwanda' laptops at the Kigali-based South American technology firm, Positivo BGH. Growth in the education sector is underpinned by commitment to scientific research and development.
Nigeria & Technology: Firing a Flicker of Hope
Leaders in Rwanda have set very ambitious targets, but not with-out results. Rwanda’s rapidly evolving technology scene is testament to the fact that with strong political will, and a clear blue-print backed by consistent implementation efforts, nations can reach their goals. Nigeria is not an exception.
We are in a good place to kick-start our own technology breakthrough.
Information and communication sub-sectors defied the recession, expanding by 4.07% and 1.35% during the first two quarters of the year. Nigeria’s capacity for innovation was ranked 77th amongst 138 countries in the 2016/2017 Global Competitiveness report. Government sources say that internet penetration has hit 47.44%, the second highest in Africa.24 At least four telecoms operators in Nigeria have rolled out 4G services.
The booming ICT space continues to attract global attention. Facebook founder – Mark Zuckerberg – is the latest visitor to the blossoming Yaba technology hub. The Nigerian government is to-day taking initial steps towards the establishment of its first ICT University, while the lawmakers have shown their willingness to adopt an e-voting system that encourages transparency and accountability. Although manufacturers have been hit in recent times by the foreign exchange scarcity, up to 30 new assembly plants have been licensed since the National Automotive Industry Development Plan (NAIDP) was introduced in 2013.
Any sustainable economic progress will require commitment to a new direction driven by a cocktail of comprehensive and timely policy actions, implemented by a forward-looking and innovative government.
With disruptive technology, we will liberate ourselves from the pains of having to endure all the stages of industrial development experienced by developed Western nations. The application of radical innovation across sectors and industries will enable Nigeria to leapfrog more expensive, less-efficient processes, to accelerate inclusive growth and drive sustainable development – two major policy goals of the Buhari administration.
2. Trading Economics. 2016. Retrieved from “Rwanda GDP Annual Growth Rate.”
3. The World Bank. 2016. "GDP per capita, PPP (current international $)". .
4. The East African, 2016. Retrieved from Rwanda Top in Internet Access but Cost, Devices a Hindrance.
5. UNDP. 2015. "Human Development Report 2015".
6. Rwanda Development Board. 2012. “Vision 2020 Booklet.”
7. The Eagle Online, 2016. Retrieved from Nigeria broadband penetration reaches 20.95% — NCC.