Research Paper on the Economic Development in Rwanda

Abstract

Existing research on the economic development in Rwanda centers on the growth theory, which explains that economic growth emanates from endogenous forces. According to this theory, investing in innovation and human capital are major contributors to the economic development of a country. This research was conducted to determine the viability of Rwanda's Vision 2020 through the economic development and poverty reduction strategy of its economic model dubbed, EDPRS. The methods used to conduct the research include the use of secondary data relevant to the economic situation in Rwanda. The study uses both qualitative and quantitative approaches. It makes use of random sampling method where the data collected is sampled randomly with a key interest placed on the years and the level of economic development observed during those years. The results obtained confirm the hypothesis that the agricultural, educational, and health sectors as well as political stability, have greatly contributed to the economic development of Rwanda. It was determined that the agricultural sector had a great influence on other areas such as education, health, and politics. Finally, the results of the study showed that the higher the quality of the education provided, the lesser the mortality rate in the country. Based on conclusions of the study, it is evident that the agricultural, health and educational sectors are the main pillars of Rwanda's economic development.

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Economic Development of Rwanda

Introduction

Rwanda set 2020 as the year when it would have achieved most of its economic development through the project dubbed Economic Development and Poverty Reduction Strategy (EDPRS). In the wake of technological advancement, Rwanda has enjoyed strong economic growth. The creation of new businesses has intensified and this has helped in reducing poverty in the country. Besides this, the government of Rwanda has taken on many initiatives that are focused on enabling development, especially in promoting positive reforms in the business sector. Many of these reforms have also attracted global interest in the Rwandan economy. For instance, the provision of a conducive business environment through friendly policies have helped the country to climb from a rank of 132 to 62 on the annual World Bank Doing Business Report.

Moreover, the major foreign exchange earners such as tourism, coffee, and mining have continued to show robust growth. Indeed, the development of an export industry will be vital in decreasing poverty and enhancing economic development. An increase in exportation may allow the country to participate in global market and benefit from international opportunities/marketplaces. Furthermore, the USAID has helped the country to attract investments by promoting market access and supporting Rwanda in removing the barriers that limit growth in the private sector. EDPRS was structured in three distinct phases to make it comprehensible to even the hoi polloi. The government sought to simplify the policy, so that every Rwandan from all backgrounds could realize the vision. The first phase was designed as a self-evaluation conducted by each of the sector working groups. The sector working groups are groups of people that were elected to conduct various sectors of the economy. Assessments were also conducted to help each of the sectors to set attainable goals. The EDPRS also provides a summary of Rwanda's achievements to date in regards to poverty reduction, governance reform, and growth performance.

In a study conducted by Westoff regarding the progress of Rwanda, he argued that Rwanda needed to establish a strategic plan to enhance its economic agenda. Furthermore, it needs to marshal resources to ensure that the project is adequately supported. Another study conducted by Castello and Rafael underpins investment in health, education, and agriculture as the main pillars for a country's development. Thus, if Rwanda seeks to develop, they argue, it must focus on these pillars. Despite the different approach of the researchers, they all agree that a proper plan is necessary to support the agenda of the government. Rwanda is banking on the EDPRS to ensure that the nation achieves middle-income status by the year 2020. The EDPRS can be interpreted in two ways: one as a document and the second one as a process. When viewed as a document, it stipulates the priorities, objectives, as well as the major policies, which are to be implemented during the 5-year plan. It acts as a guideline or a roadmap that explains the direction that Rwanda wants to take relating to its economic development. As such, any activity that is undertaken by the government must be within the framework of this roadmap. As a process, the EDPRS seeks to partner with stakeholders both at the local and government level to ensure that Rwanda becomes an economic hub in Africa.

The EDPRS examines the key factors that need to be implemented to ensure that Rwanda gains economic stability by the year 2020. Through the policies the country aims to invest in agricultural, education, and health and to encourage positive political participation. This study used secondary data to gather information about Rwanda's development plan. Secondary sources are essential as they provide various insights about a particular phenomenon using the available data. From secondary data, it is evident that Rwanda has experienced development in agriculture especially in the dairy and horticulture sectors. The government is supporting farmers to enhance their production and processes in order to increase their products' competitiveness in the global market. The government's determination to bolster economic development is also evident in its support to the private sector. For example, it is facilitating the policy reforms, which will encourage the private sector to use more fertilizers to augment production. Moreover, Rwanda's cooperation with USAID is allowing the country to benefit from regional trade by enhancing the competitiveness of Rwandan products and increasing trade facilitation policies. Because Rwanda is landlocked, it has increased efficiency in trading with neighboring countries such as Tanzania and Burundi.

Additional information from secondary sources reveals that the genocide in Rwanda and its consequences have stunted the development of the country. The country's fortunes were greatly affected and areas such as education, health, and agriculture, which were the pillars of the economy, were destroyed. Unemployment rate also soared in the country, causing Rwanda to be among the poorest nations in Africa. Some of the effects of the genocide continue to haunt the nation to date.

During the past two decades, after the genocide, Rwanda has observed a sustained economic and social development. The life expectancy and health care spending have improved due to the government's initiatives. The country has also experienced some progress in social reforms especially on gender equality. For example, 64 % of parliamentarians are women in the current government. In addition, women in the country have made numerous advances. For instance, they can now own land for agriculture. Yet, In spite of the development spurt, Rwanda is still facing many problems. For example, more than 60% of the population is still living with about $1 per day. In another example, the government still depends on foreign aids whereby 40% of its budget is financed by foreign aid. The country requires to strengthen its population which is still working on subsistence farming in its effort to achieve a knowledge-based economy.

The analysis will help in evaluating the significance of the growth approach of Rwanda in its economic development. Research has shown that agriculture is a major contribution to ensuring that various states have achieved growth, but it also needs to incorporate new technologies to achieve a rapid development. Equally, the study will help the government and various stakeholders see the importance of supporting farmers in the production and the marketing of their products. It will also inspire investors to gain interest in Rwanda as an attractive market that has not been adequately explored. The government will be challenged to implement the necessary reforms that will help in promoting economic development. It will identify the areas that it needs to focus on to achieve rapid development. Moreover, the study will encourage researchers to focus on Rwanda development such as assessing the impact of agriculture on the country's development. The guiding question for this study will be, "Does Rwanda's Economic Development and Poverty Reduction Strategy (EDPRS) have a significant impact on the economic development of the country?" Based on this research question, this study will highlight the agricultural, health and educational sectors as the main pillars of Rwanda's economic development plan.

The next section shows the methodology that was used in the study as well as the results that were obtained. Based on the conclusions, it is evident that Rwanda will continue to develop economically if it maintains its investments in the sectors of health, the economy, and agriculture.

Research Methodology

This part of the research will focus on the methods that are used to evaluate the economic development of Rwanda. It will include data collection and analytical methods. Quantitative data will be obtained from secondary sources to determine the extent of Vision 2020 towards the economic development of Rwanda. Sample size determination and sample selection will be done in this section of the research. It is assumed that the economic growth in Rwanda depends on three main factors which are: agriculture, economy and health. Therefore, economic data is collected based on the three main variables which are related to those sectors. Moreover, the study focuses on establishing the independent impact of the three variables to economic development. Also, it evaluates the joint impact of the three factors and will assess the effects of improving them towards achieving Rwanda's vision 2020.

Research Design

This study uses the descriptive research design. The Descriptive research design enables the researcher to observe and describe the behavior of something without necessarily having to interfere with it. The research design will refer to the data collection and analysis methods. For the research design, the factors are agriculture, economy and health.

Sampling Method

The research will apply simple random sampling where the sample size will be determined. In this research, the sample size is the number of years. The research will apply time series data obtained in a range of ten years. The researcher will source for information from relevant sources especially those that have the required data involving the economic development of Rwanda. A time range of ten years is essential to the researcher and the users of the research since it provides sufficient basis for economic trends and projections and which are essential for an accurate analysis.

Data Collection Methods

the study will mainly rely on secondary sources of data collection. This type of data will be straightforward to obtain; it will be inexpensive for the researcher to collect; and it would also save the researcher some time. Secondary sources are Therefore, the most suitable and efficient method of data collection here. The research will apply time series data obtained from the website of the Bureau of Statistics of the country, the World Bank and, the International Monetary Fund. Notably, the research will use recent data that range from 2009 to 2018- a range of ten years. A wide range of data increases preciseness of the results and reduces the error...