Poverty Reduction in Rwanda
It was in 2012 in Rio De Janeiro, the conference known as sustainable development was made by the United Nations and structured its objectives that would solve problems in the social, economic, and political corners of the world. These goals are known as “sustainable development goals (SDGs)”. Through these SDGs goals, The 1st known as “No poverty”. Poverty is one of the significant constraints that the world is facing these days. Countless people have been affected and are being affected by chronic hunger and malnutrition, which results in negative effects to socio and economic development.
According to the United Nations Development Program estimation, 736 million people still live in extreme poverty which is 10% of the world’s total population. This indicates how the world is being affected by poverty and its effects. Therefore, the UN and other organizations took policies and measures to eradicate poverty. However, this goal might be burdened by the greediness of some of the leaders who put their interest first instead of the people who chose them to stand on their behalf.
Technology improvement is also another major cause of high rates of poverty. Artificial intelligence is one of the leading reasons for people losing their jobs and entrepreneurs earning a massive amount of money (Chakraborty, and Acharya, 2018). For instance, in ALIBABA stores, only robots are the ones lifting things (Cerrudo, and Apa, 2017). This reduced the thousands of man labor that Alibaba needed to use. This also applies in Rwanda where more than 1000 of the drivers-mate that had jobs before Tap and Go came and were adopted and now some are unemployed due to the Tap and Go system that does not require a conveyor for service. All these are indicating that poverty will continue increasing as Artificial Intelligence is driving the new era.
Stands of poverty in Rwanda
In the last couple of decades, Rwanda has seen a tremendous decrease of poverty either on the national GDP with major sectors like infrastructure, health care, and education developing simultaneously or even on the personal aspect with an increase in affordability of basic needs and many more as well considering the development of the private sector which on low support of the government. Rwanda came from a GDP of $2.569 Billion in 2000 to $9.509 Billion in 2018, and on the side GDP per capita, coming from $218.98 in 2000 to $772.68 in 2018. (World Bank, 2018) But this is not yet enough for a country working on eradicating poverty with no more than 1% of the total population falling under the poverty line. Today, the world’s average GDP per capita is $18,000, this clearly shows that Rwanda is still far away from the world trend but with regulations and laws being put in place and huge investments made in some sector, there are high expectations on the increase in the coming years if there is no economic growth or social progress interruption.
Rwanda national GDP(Above)and GDP per capita(Below) trendlines in the last 50 years(Worldbank, 2019)
(Rwanda GDP of the last 50 years. World Bank)
(Rwanda GDP per capita of the last 50 years. World Bank)
By being specific to poverty instead of the general statistics like GDP capita. In 2016, the World Economic Forum report showcased how the percentage of people living under the poverty line dropped from 57% in 2005 to 45% in 2010 ( Weforum, 2016) even though 63% of the population were still living in extreme poverty defined by the World Bank as living on less than a $1.25 per day.
The government is making major changes in both its investment decisions’ systems and focuses on the development of the different sectors to ensure a long-lasting hike of the economy in the developing digital-led world. In 2016, around 83% of the total population was still living in rural areas and around 70 % relying on subsistence farming which doesn’t really put any contribution to the country’s economy.
Going deeper on the root cause of poverty in Rwanda, include demographic features of the country. On a land scale of 26,338 km2 lives 12 million, making it the second-most densely populated country in Africa after Mauritius on a scale of 525 people/km2 (Sawe.B, 2020). This is one of the reasons which can lead to poverty since there is a shortage of land to use productively in consideration to the inhabitants and there is still a lack of management in land use and urban areas settlements.
When the vision 2020 development strategy was set, the target was to have a healthier, educated and prosperous nation with a low middle-class income( approximately $1006 to $3,975 per year), with economic growth bounced by the private sector. It’s within this development strategy many policies have been implemented to eradicate or decrease the poverty level in the country.
The following are projects which took place and the contribution they made in the process.
EDPRS 1 & 2
Fully known as the Economic Development and poverty reduction strategy. These strategies were adopted in 2008, with the first one starting from 2008 up to 2012 and the second one from 2013 to 2018. They all had main priority to focus on in each sector:
- Priority 1: Increase the domestic interconnectivity of the Rwandan economy
- Priority 2: Increase the external connectivity of Rwanda’s economy and boosting exports
- Priority Area 1: Integrated Approach to Land Use and Human Settlements
- Priority Area 2: Increase the Productivity of Agriculture
- Priority Area 3: Connecting Rural Communities to Economic Opportunity
Productivity and Youth Empowerment
- Priority 1: Skills and Attitudes
- Priority 2: Technology
- Priority 3: Entrepreneurship, Access to Finance and Business Development
With these strategies and priorities put in place, there rose various programs that really reduced poverty levels on a significant level. Those programs included:
In 2012, the success of Nine Years basic education led the Programme to its expansion of Twelve years of Basic Education: This program comes to give access to every young Rwandan child to upper secondary education at no cost. In the report made by The Commonwealth Education Hub, over 6,008 new classrooms were built and more constructions still ongoing, helping to apply for the program in the entire country and increase their capability of handling huge numbers from lower secondary. (CEH, 2019). The increase of a literate population is highly expected to strengthen the private sector thus creating new job opportunities and the competitiveness of the country on the regional and global levels in various sectors.
Social and Economical
Introduction of SACCO(Savings and Credit Cooperative Organization): These microfinance institutions were started in 2008 in almost every sector of the country, as one of the government initiatives to boost rural savings and ease getting loans to rural businesses and increase financial inclusion to every Rwanda citizen.(rca, 2015). Financial inclusion can play a vital role in poverty alleviation
Gender Equality: Increasing gender equality is one of the strategies for the alleviation of poverty, it is most crucial to meeting basic needs and ensuring food security. Equality helps in poverty reduction where every individual has equal power on decisions on financial resources usage and investments.(Margarita, 2019) This comes up as one of the pillars the Rwandan economy is currently based. Since 2000, major policies have been introduced to strengthen gender equality in all sectors, from the school enrollment of girls to the increased ratio of women in the parliament of 64% from 17% in 15 years earlier(World Bank, 2015).
Improvement in infrastructure quality and quantity was one of the key implementations which were put in place to ensure ease of movement within the country and ease of doing businesses. From the construction of roads, focusing on inter-provincial ones and inside the 6 secondary cities to Kigali was key targets to achieve. 1500 kilometers roads were estimated to be constructed in the country by 2020, even though this wasn’t even nearly achieved, there was a tremendous improvement of road connectivity between provinces’ rural areas and main cities(Adam, 2018)
Apart from roads, there has also been a significant increase in electrification within the country with more than half the country having access to electricity from 10% in 2009. In 2019, 23.62% and 84.8% of people living in rural and Urban areas respectively had access to electricity.(World Bank,2019) . This has led to the creation and development of small businesses mostly in rural areas.
Industrialization created new jobs and for the development of a digital economy, fiber optics were laid in entire countries, bringing the country under 4G coverage, enabling the creation of small businesses. (Minict, 2019)
Electricity access in Rwanda. (World Bank, 2018)
When promoting poverty reduction policies and programmes, it is essential to enhance coordination among social sectors, but also between social sectors and others, such as agriculture- given their contribution to creation of employment, social protection and economic growth.
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