Inside Rwanda’s economic recovery and job creation strategies

By Esther Muhozi
On 15 February 2024 at 07:26

The Government of Rwanda has declared that, in response to the impact of the Covid-19 pandemic, approximately Rwf206.6 billion from the Economic Recovery Fund has been allocated to the private sector, with additional funding aimed at supporting new projects.

In addressing the economic challenges posed by the pandemic, the Government of Rwanda established the Economic Recovery Fund to assist businesses affected by the crisis. Prime Minister Dr. Edouard Ngirente informed the Parliament on February 13, 2024, that since its initiation in 2021 with $150,000, the fund has seen an increase to Rwf459 billion, with Rwf206.6 billion already disbursed to support the private sector.

Dr. Ngirente explained, "The fund has already given Rwf206.6 billion to different members of the private sector out of Rwf459 billion that was put into the fund in its two categories." He emphasized that these funds, beyond aiding projects affected by Covid-19, have also been directed towards supporting new investments.

Initially, the fund began with Rwf300 billion in response to private sector requests, later augmented to Rwf459 billion Frw. Dr. Ngirente highlighted that the service sector, particularly hotels, received the first funds, contributing to a positive impact on the economy. The service sector, which saw a 6% contraction in 2020, experienced a 12% rise in 2021 and 2022, with provisional figures for 2023 indicating a 1% increase over the three quarters.

Prime Minister Dr. Ngirente remarked, "The support we have given them through the economic fund has not been wasted because you have seen that it has contributed to the improvement of our economy. The more money we earn, the greater the production, which increases the overall production of the country."

Dr. Ngirente emphasized the significant size of the funds allocated to the private sector, highlighting the continuous growth of the fund. He assured that the fund would persist in its efforts, particularly in supporting various investments. Furthermore, he disclosed a plan to promote industrial development, with 136 approved projects expected to generate over 43,000 jobs for Rwandans across diverse backgrounds.

Elaborating on the industrial development plan, he stated, "There was an established plan to develop the industry so that we can contribute more to the economic development and job creation." The program, implemented in 2021, has led to the approval of 136 projects valued at more than $2.3 billion.

Statistics indicate a notable increase in loans received by the private sector from banks, reaching Rwf1927 billion in 2023 compared to Rwf1065 billion in 2020. Over the period from 2021 to 2023, more than 590,000 new jobs have been created, aligning with the government’s goal of generating at least 200,000 new jobs annually.

The aerial view of Kigali Special Economic Zone located in Masoro, Gasabo District.