A combination of population growth, urbanisation and the migration of labour into higher value-added sectors will make private consumption the key driver of economic growth over the next eight years, but poor infrastructure will remain a significant barrier.
The construction of a USD40m dry port will help to reduce major non-tariff barriers to trade and improve access to coastal ports once completed in 2017. Other infrastructure improvements include the recently operational methane gas plant in Lake Kivu, which will generate 75MW; a 28-MW hydropower plant on the Nyabarongo River; and an agreement to import 30MW from Kenya and 450MW from Ethiopia.
The government’s ambitions are further supported by loans from international finance institutions and private foreign investment, as well as the five-year USD20m infrastructure bond launched in February 2016.
Government spending on infrastructure is set to increase under Rwanda’s Economic Development and Poverty Reduction Strategy, with plans to develop rail links to the Indian Ocean ports through Tanzania at a cost of USD800m to USD900m. This will open up new routes to market for Rwandan trade and add further impetus to economic growth.