Donnah Rubagumya
Africa-Press – Rwanda. Speaking during a panel discussion titled “Building a solid foundation for our country” at the 17th Rwanda Patriotic Front (RPF) Congress in Kigali, Rwanda Development Board (RDB) chief executive Jean-Guy Afrika was clear about the scale of Rwanda’s ambition and the growth arithmetic behind it. To reach upper-middle-income status by 2035, he said, Rwanda must raise GDP per capita to about $4,000, and to roughly $12,000 by 2050 to attain high-income status.
Achieving these benchmarks will require consistent double-digit economic growth, at least 10 per cent over an extended period.
Afrika outlined the pillars through which this ambition is expected to be realised: infrastructure development, logistics and connectivity, private-sector growth, and human capital development. President Paul Kagame reinforced the same message, noting that while current growth of around 8 per cent is commendable, it falls short of Rwanda’s potential. If the country can grow at 10 per cent, settling for less is not success. It is underperformance.
The question, therefore, is not whether Rwanda understands what needs to be done. It does. The more difficult question is whether the country is confronting what truly constrains its ability to do it. Those pillars describe what must be built. They do not fully address how such transformation will be financed. And finance, more than policy design or institutional capacity, is now Rwanda’s binding constraint.
No economy sustains double-digit growth without access to large volumes of cheap, patient, long-term capital. Infrastructure does not build itself. Industrial clusters do not emerge on short-term, high-interest loans. Export champions do not grow on cautious finance. Rwanda’s institutions are strong and its governance credible, but it is attempting transformation with expensive, risk-averse money.
This is not unusual. It is the classic dilemma of late developers.
East Asia’s rise is often attributed to discipline, exports, and skills. But beneath those achievements was something more decisive, alternative financing architectures deliberately designed to accelerate growth. Japan, South Korea, Taiwan, and later China built policy banks, directed credit to priority sectors, suppressed interest rates strategically, and absorbed early losses politically. Finance was not neutral; it was an instrument of national strategy.
In South Korea, access to cheap credit followed export performance. Firms that delivered grew; those that failed lost support. Scale came before efficiency. Growth came before balance-sheet elegance. Rwanda today operates under a far cleaner financial model, concessional aid with conditions, blended finance, public-private partnerships, and private capital that prefers fast returns in services and real estate. These tools have value, but can they produce the transformation we want?
Vision 2050 makes another crucial point that deserves more attention: Rwanda cannot become a high-income country as a predominantly rural society. Today, fewer than one in five Rwandans live in urban areas. Vision 2050 aims to reverse this, targeting about 70 per cent urbanisation by mid-century. This is not a demographic preference; it is an economic necessity. High-income economies are urban economies. Productivity, innovation, and efficient service delivery concentrate in cities.
But urbanisation at this scale cannot be financed incrementally. Building future Rwandan cities, dense, vertical, serviced, and climate-resilient, requires huge volumes of long-term, affordable capital. Vertical construction, mass housing, urban transport, water systems, and energy networks must be built ahead of population inflows, not after. Expensive, short-term finance produces sprawl. Cheap, patient finance enables vertical, efficient cities.
The same financing logic applies to agriculture. Rwanda’s hills can support a green, productive, high-value agricultural economy year-round, but only if water is mastered. Mountain irrigation systems, hillside reservoirs, and water tanks resting atop ridges could allow gravity-fed irrigation across valleys and terraces. This is not a technological challenge. It is a financing challenge. Such systems have long payback periods and will not be built by commercial lenders. Developmental finance is essential.
If Rwanda focuses on high-value agricultural exports, horticulture, specialty crops, and agro-processed goods, rural productivity can rise even as labour migrates to cities. This is how urbanisation becomes economically sustainable. Cities grow not because rural areas collapse, but because agriculture becomes more capital-intensive and less labour-dependent. Again, the transition depends on cheap, patient capital willing to fund irrigation, cold chains, and agro-processing before profits appear.
Infrastructure, logistics, urbanisation, and agricultural transformation are therefore not separate agendas. They are a single financing problem.
This also reframes the role of the private sector. SMEs are vital for jobs and resilience, but large, export-oriented firms drive productivity growth. Every country that sustained double-digit growth relied on a small number of firms operating at scale, often supported and disciplined by the state. Rwanda remains cautious about picking winners. That caution may be good politics, but growth economics rewards decisiveness.
Human capital development faces a similar timing challenge. Aligning education with industry is essential, but education reforms take decades to mature. Vision 2035 does not have decades. Fast-growing economies imported skills aggressively, engineers, managers, technicians and embedded them in domestic firms. Financing must absorb the early costs of knowledge transfer.
To unlock truly transformative volumes of cheap, long-term capital, Rwanda may need to go further and pioneer new financing frontiers. Asset tokenisation could allow the country to fractionalise high-potential national assets, future tourism revenues, renewable energy projects, logistics hubs, or prime urban land into investable digital units accessible to diaspora and impact investors. Future export revenues from sectors such as coffee, tea, minerals, or MICE tourism could be securitised through advance market commitments backed by guarantees, enabling upfront borrowing at concessional rates tied to performance. Crypto-enhanced diaspora bonds could mobilise patriotic capital at scale, while catastrophe and resilience bonds could front-load global insurance capital to de-risk infrastructure.
As I have advocated before, the realm of innovative and creative alternative development financing is vast and largely untapped. We need bold financial engineering policies and the experts to implement them to fully explore and harness its potential.
Countries that achieve sustained double-digit growth do not wait for capital to arrive on comfortable terms. They engineer financial architectures that pull it in.
Eight per cent growth is respectable. Ten per cent growth is transformational. The difference lies not in knowing what to do, but in how boldly Rwanda is willing to finance its ambition.
Source: The New Times
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