One of Africa's smallest and most densely populated countries Rwanda expects to double its economy over the next 15 years and its economic growth in the coming decade will be powered by taking advantage of its strategic location to become a regional trade and investment hub.

As part of the government's Vision 2020, Rwanda has set itself the target of moving from a per capita gross domestic product (GDP) of around US$250 to US$900 by 2020, a task that will require a seven-fold increase in GDP from the current US$2 billion.

And the way to do that, says Vincent Karega, minister of Commerce, Industry, Investment Promotion, Tourism and Co-operatives, is a two-pronged strategy of attracting direct foreign investment and boosting exports.

A member of COMESA (Common Market for Eastern and Southern Africa), Rwanda already provides access to 400 million potential consumers. It is set to join the East African Community later this year.

The country has become one of the most open economies in Africa, doing away with most tariff barriers in the process.

"We are positioning Rwanda as a market for the region," says Karega, pointing to the country's sound government, lack of corruption, well-educated workforce and rapidly expanding high-tech infrastructure.

The commerce ministry is working with other public and private-sector institutions to create a stimulating, flexible and dynamic business climate. The aim is to create a base for overseas investors to set up partnerships with small and medium-sized enterprises.

"For the last three years, the ministry has been implementing new policies to attract investment, promoting the private sector by creating the right legal environment and offering businesses support through other institutions," he explains.

Public-private partnerships, for example between the BRD development bank and the private sector federation CAPMER, will lay the foundations for future growth, says Karega.

Karega says the country is proving increasingly attractive to growing numbers of Chinese investors, keen to enter the burgeoning markets of Africa.

"The Chinese need to sell, and we are developing an export processing zone to make Rwanda a redistribution point. With their skills and knowledge of local markets, Rwandans make the perfect local partners," says Karega. He points to opportunities in energy, information and communications technologies, infrastructure, agriculture and food processing, mining, and tourism.

"If we look at our economy, 40 per cent is generated by agriculture, another 40 per cent by the service sector, and the rest by industry," he says. "The private sector's contribution is invaluable, but what we also need to ensure is that the private sector becomes vibrant enough to influence the labour force to produce the right products for the market. We need to look into high-value, high-yield crops, for example."

Around 90 per cent of the population still depends on agriculture, and the sector contributes almost three quarters of export earnings. To create more rural wealth, boost export earnings, and meet the country's own food needs, the sector needs to move away from subsistence farming to producing high-value crops.

Tea and coffee offer tremendous potential, and are being privatized, pulling in key foreign investment. In February, the government sold a 51 per cent stake in the country's biggest coffee processor and exporter, Rwandex.

This move will see the creation of new coffee washing stations throughout the country, and strengthen the quality of Rwanda's coffee exports.

Karega says Chinese investors are particularly suited to areas involving added value, such as the coffee and tea sectors, and he looks forward to what he calls a "win-win situation" with China and the rest of the world, based on fair trade among regional economic blocs that see each other as partners, not competitors.

The commerce ministry is also working hard to attract further private investment to the tourism sector.

Rwanda's star attraction is undoubtedly its gorilla population, which makes up more than half of the world's total population. The best way to protect this precious resource, and to create a long-term, sustainable sector is to focus on low-volume, high-yield tourism, says Karega.

Highlighting what he sees as the different attitude of the Chinese to doing business, Karega says: "China doesn't have a neo colonial attitude, and this balances our relations with Europe."

(China Daily 10/13/2006 page17)