Rwanda has made rapid progress; soon, its people will be happy

Thursday May 25 2017

Jeffrey Sachs is director of the Earth Institute at Columbia University in the US. PHOTO | FILE

Rwanda is one of the star macroeconomic performers in Africa, with economic growth currently in the range of 7 per cent per year, and with significant increases in life expectancy and other indicators of wellbeing, including literacy and school attendance.

According to the IMF, the Rwandan economy grew at an average annual rate of 8 per cent between 2000 and 2015. According to the United Nations, life expectancy at birth during 2000-2005 was 50 years and is expected to average 66 years during 2015-2020.

Rwanda is accomplishing this progress from difficult beginnings. First, it is landlocked, making it more difficult to achieve the kind of export-led growth that boosted East Asia’s emerging economies.

Second, Rwanda endures and must continue to overcome the wounds of the genocide.

Third, Rwanda lacks rich hydrocarbon deposits and therefore has depended mostly on imported energy. That could change significantly as its increasingly taps its own solar and other renewable energy with new technologies.

I know of few countries around the world that have made as much recent progress as Rwanda. And I know of even fewer countries with the kind of forward-looking, goal-based management and policy implementation that Rwanda has exemplified since the years just after the genocide.


Yet starting from genocide and extreme poverty and the lack of primary energy resources, Rwanda still faces profound challenges. The great progress to date shows up in some places but not yet in others. For example, Rwanda has climbed steadily on the World Economic Forum’s Global Competitiveness Index, reaching a very heartening ranking of 62nd out of 138 countries in 2016, a quite remarkable achievement.

Rwanda also scores 50th out of 174 countries on the Transparency International Index, among the very highest in Africa.

That high score reflects the widespread view that Rwanda is among the least corrupt and best managed countries in Africa, and indeed among low-income countries worldwide.

Taken together, those high rankings suggest that Rwanda will be a choice location for inward foreign investment in the coming years.

Yet as co-editor of the both the Sustainable Development Goals (SDG) Index and the World Happiness Report each year, I do realise that Rwanda still has a generation of hard work ahead to overcome the legacies of poverty, exploitation from abroad, poor governance, and genocide.

I am optimistic because I see a society taking the very steps needed for success, including spurring higher education, adopting the SDGs as a framework for action, and promoting innovation and adoption of cutting-edge technologies.

These are all the correct policies for rapid progress and leapfrogging in overall economic performance.

Some people have asked me why Rwanda scores only 151st out of 155 countries in “happiness” if it has made such progress in competitiveness, growth, life expectancy, transparency, and domestic peace. My own view is that Rwanda’s score is likely to rise, and rise rapidly over the coming generation.

There seems to be a time lag between progress in development and life satisfaction as registered in surveys, since economic progress itself is very hard work, requiring long hours of study and work, high savings, and a constant attention to the future.

Consider, for example, the rapid urbanisation that is now underway. In 2000, 15 per cent of Rwandans lived in urban areas according to UN estimates. By 2015 that had nearly doubled to 29 per cent, and the UN expects 34 per cent urbanisation by 2020. This urbanisation is key to Rwanda’s future economic and social development and is a very positive development overall. Yet urbanisation is difficult. Migrants from the countryside do not find city life easy, with its anonymity, rapid pace, and weaker social bonds than in villages.

Thus, countries experiencing rapid urbanisation often show lower levels of wellbeing in that phase.

This year’s World Happiness Report has a chapter on happiness in China.

By any standard, China has made the most rapid economic progress of any major economy in world history. By all standards – reduced poverty, higher incomes, long life expectancy, greater education, and many others – China’s progress is astounding.

Yet as the China study shows, the survey evidence suggests that self-reported happiness in China actually declined from around 1990 to 2005 before starting a rapid increase after 2005. Thus, even as China was making all-time record progress, recorded happiness was falling, albeit temporarily.

After roughly 25 years of fast progress and rapid urbanisation, China’s recorded happiness began to rise rapidly. In short, I believe that Rwanda is very much on the right course.

Jeffrey Sachs is director of the Earth Institute at Columbia University in the US.