Barely has the ink dried on the paper on which the deliberations of top government officials tucked away in Gabiro School of Infantry than observers started poking holes into them.

An average growth rate of 11.5 per cent (from $1,000 to $1,240) and at least 560MW of electricity on the national grid are two of the key targets the Rwandan government has set itself in what some observers say might turn out to be “too ambitious” at a time the global economy is struggling.

The government maintains that the targets, set during the 10th national leadership retreat, are achievable before 2020.  

The economy recorded an average growth of 8.5 per cent over the past 10 years. However, the latest targets, contained in the second Economic Development and Poverty Reduction Strategy (EDPRS II), which involve doubling the GDP per capita and increasing electricity generation by 2013, will test the resilience of the economy.

Last year, the government revised Vision 2020 upwards, adjusting GDP per capita and economic growth targets. It also set out to reduce poverty levels to below 20 per cent from the 44.9 per cent achieved over the past 10 years.

Under the EDPRS II and the revised Vision 2020, Rwanda will need to eliminate extreme poverty; some 24 per cent of the population live in extreme poverty.

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According to Minister for Finance and Economic Planning Claver Gatete, however, the government cannot achieve the target without the support of the private sector. The country also faces the daunting task of growing its exports to 75 per cent of imports if it is to reverse the negative trend.

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The government is in a desperate bid to bridge its balance of payments deficit with the country heavily relying on imports. The Ministry of Finance envisages that if the private sector contributed 15 per cent to the GDP from the current 10 per cent, the targets would be easily attained.

That would mean that, by 2016, the private sector should overtake the government in terms of investment, a feat observers say will not be easy given the current fragile state of the country’s private sector.

“Today we have a GDP per capita of $644 according to the figures from the National Institute of Statistics. Our goal is to achieve our old target in the Vision 2020, of $900 by 2017 and $1,240 by 2020. Our plan is also to see 35 per cent of the population living in cities.

“If we are to achieve these targets we need to increase our exports by 28 per cent a year. There is a need for the private sector to play a pivotal role and become the engine of this growth. The average growth today is 7.2 per cent but we want at least to have 10.2 per cent by 2017.”

The government wants to reduce poverty levels to below 30 per cent and extreme poverty levels to below 10 per cent. This will require creation of 1.8 million jobs by 2017, at least about 200,000 jobs every year.

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The new EDPRS is built on four pillars – economic transformation, which contains key driving factors to achieve the 11.6 per cent target; rural development, which focuses on poverty reduction; skills and capacity development, targeting the youth; as well as accountability.

Financing for the private businesses however remains limited. Nonetheless, the government believes that the growth of the service and financial sector will trigger financing for the private sector, hence a growth in exports.

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“If we don’t have skills, we cannot increase our productivity,” Mr Gatete told the 10th national leadership retreat, which was chaired by President Paul Kagame.

Among other uphill tasks is the need to create 200,000 jobs outside the agriculture sector. With the limping manufacturing sector, it remains to be seen where these jobs will be created as the only hope is the service sector.

Tall order

“That will be very hard,” an economic analyst and diplomat who declined to be named told Rwanda Today. “Unless the government creates new portfolios and institutions, which is also a difficult task, creating 200,000 jobs will be a tall order at a time when the government is cutting costs in many areas.

“It is equally a tall order for the private sector. As donors we appreciate these ambitious targets and we also appreciate that there is will on the side of government. While some of the targets are realistic, others could turn out to be too ambitious.”

Part of the plan is to see at least 35 per cent of Rwandans move into cities or towns, which some observers expressed fears about.

“It comes with positive and negative implications. If people move in multitudes, the agriculture sector could be deprived of vital manpower, but if this transformation happens gradually and systematically, the impact can be a positive one,” Ntwali Sebahizi, a rural development expert and university don, said.

Mr Gatete is however of the view that if the government invests in infrastructure, including roads, energy and ICT, that would create inter-linkages between towns and would-be cities but that more central to this target will be energy.

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According to Minister for Infrastructure Silas Lwakabamba, the government plans to have at least 560MW on the grid by 2017, up from a paltry 110MW. The recent power outages in the country dominated discussions at the retreat with Prof Lwakabamba promising that these could soon be history.

“Currently, the demand of power is higher than supply,” he said. “We discussed the issue of electricity and the new power plants that are under construction. By June 2014 we will have KivuWatt generating 25 MW, as well as Nyabarongo I, which will produce 28MW.

“The government has set a target to generate about 563 MW by 2017 under the new EDPRS. This will mean half the population will have electricity. The study has been done and we think this will be possible. Our plan is to have 1,000MW or more on the grid by 2020.”

Others argue that it is difficult to vouch for the credibility of the government’s self-assessment.

“At the moment, we have no facts to verify if they will be achievable or not.... Some of the targets look good but they are over-ambitious,” Frank Habineza, the leader of the yet-to-be-registered opposition Democratic Green Party of Rwanda, said.

“One thing though which is commendable is the one million people who moved out of poverty; but then, we have another 10 million still struggling and about 60 per cent below the poverty line, who cannot earn one dollar a day.

“Some of the figures the government gives are very questionable.”