Despite the short period left to the deadline for the mid-term development roadmap that among others, projects income per capita to reach $1,240 against economic growth of 11.5 per cent, the Government is optimistic that the target is still within reach.

The targets are enshrined in the second Economic Development and Poverty Reduction Strategy (EDPRS II) and Vision 2020, both of which seek to drive the country into a middle income status.

The most recent report by the National Institute of Statistics of Rwanda (NISR), published in March, last year, put GDP per capita at $720, from $221 in 2003.

Yusuf Murangwa, the director-general of NISR, said the next figures on GDP per capita would be released in March.

This means that by the end of 2020, the current GDP per capita must increase by at least 60 per cent to hit the Vision 2020 aspirations.

To put it into context, GDP per capita gap (as per the Vision 2020 is at $520) has to increase by about $173 per year, for the next three years, which policymakers say is feasible.

In an interview with The New Times, Finance and Economic Planning minister Claver Gatete said over the past few years, several projects were set up and these, coupled with available policies, will deliver the country to the set position.

"The target (for income per capita growth) still remains on $1,240 by the year 2020. We have a target, the issue remains on how we work towards it,” Gatete said.

According to Andrew Mold, the acting director of United Nations Economic Commission for Africa (UNECA) sub-Regional office for Eastern Africa, the current economic performance is "very good” given the international context, but it will require an extra effort to achieve the ambitious targets under Vision 2020 as they are.

"It would be difficult to predict that Rwanda will attain middle-income status by 2020, but the country is going in the right direction, and as long as the impressive growth performance is not derailed, it will attain it,” Mold said.

Current growth projections

Currently, growth is estimated to have reached 6.0 per cent over the course of 2016 (as per the results for the first and second quarters of 2016 from NISR.

The International Monetary Fund (IMF) is now predicting just 1.4 per cent growth for sub-Saharan Africa in 2016, which means that Rwanda is growing 4 times faster than the regional average.

Yet still, Mold, a development economist, says it would require conventional mechanisms for Rwanda to graduate to middle-income economy by 2020.

However, he doesn’t rule out that possibility, provided some challenges are addressed ahead of time.

Among other issues he suggested should be addressed to pave way for Vision 2020 target include trade deficit, working towards mitigating climate change impacts and stability of mineral prices, among others.

"There are a number of challenges to be confronted. Frstly, we see that climate change has been weighing negatively on the performance of the agricultural sector. Drought will surely affect the agricultural output figures for the second half of 2016. Building greater resilience in the sector is therefore a priority.

"Secondly, there are foreign exchange problems related to trade deficit. Mineral earnings recovered over the course of 2016, but the trade deficit is still large, and financing it is difficult in the current international climate,” Mold said.

Global trade growth, Mold says, is slowing down "considerably”, and this is worrying economists quite a lot, as trade expansion has been one of the main drivers of growth for the global economy over recent decades.

"For developing countries like Rwanda, it means that expanding opportunities in international markets are more limited. So if exports are to grow, then it is probably better to prioritise regional markets (for example, within the EAC or ECCAS), and also focus energies on ‘recapturing the domestic market’ in sectors where there are reasonable possibilities of producing locally,” Mold said.

Toward Vision 2050

In 2016 alone, Rwanda registered commendable strides and Mold is optimistic that if the country maintains that pace, vision 2020 will pave a better path for the recently outlined Vision 2050.

The Vision 2050 underlines that the country will work toward reaching ‘upper middle income’ by 2035 and high income by 2050.

This will require an average annual growth of above 10 per cent.

Last year, several infrastructure projects were finalised, while others are on course, including the Bugesera International Airport, which is supposed to be finalised by the end of 2018, and is billed among the major vehicles that will deliver the country’s development aspirations.

This is mainly going to be made possible by the gains so far made by the national carrier, RwandAir, whose fleet has continued grow, and in tandem with the number of destinations, both on the African continent and beyond.

The growing airline industry is a major facilitator for the Meetings Incentives Conferences and Exhibitions (MICE), an initiative launched by the Government to tap into the country’s service industry.

2016 saw a number of five-star facilities like the Kigali Convention Centre and Radisson Blu, Marriott and the Grand Ubumwe Hotel, among others, launched.

This is why Mold says it is the moment for Rwanda to capitalise on the service sector investments made and finalised in 2016 and before.

"As the President pointed out in his recent State of the Nation Address, tourism is now the leading foreign exchange earner for Rwanda. A surplus in services trade is quite attainable - and should help compensate for the deficit in goods trade.”

Whether the country is going to make yet another remarkable stride to achieving the seemingly impossible goal or not, this will only depend on how all stakeholders—both in the public and the private sectors— "move faster” to address the existing economic bottlenecks.

editorial@newtimes.co.rw