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Switzerland of Africa: Little Rwanda has risen

11 May 2016 - 02:00 By Bloomberg

More than two decades on from a genocide that claimed 800,000 lives, Rwanda is taking another step towards looking like the closest thing Africa has to Switzerland.The tiny, landlocked, mountainous nation's economy has outperformed those of almost all its continental peers, with yearly growth averaging 7.8% since 2000.Like Switzerland, which hosts the World Economic Forum in Davos every year, Rwanda is about to welcome delegates to the organisation's annual African gathering."Nurturing an attractive business environment has become more important for many African nations to sustain growth, as commodity revenue and aid have fallen," Mark Bohlund, Africa economist with Bloomberg Intelligence in London, said."Rwanda has led the way by cutting red tape, providing tax incentives and improving governance, which has helped overcome the disadvantages of its small size, lack of port access and limited natural resources."However, the Swiss parallel of its economic success story, furthered with a ranking by the World Bank as mainland Africa's easiest nation in which to do business, does not extend to its reputation for upholding democracy.Civil rights groups accuse the government of stifling opposition and have criticised a constitutional change that will allow President Paul Kagame, who has been in power since 2000 and taken credit for Rwanda's economic success, to stand for a third term.Kagame's administration has built the tourism industry into the country's biggest foreign exchange earner by hosting events such as the World Economic Forum and the African Development Bank's 2014 annual meeting, and by luring visitors to see mountain gorillas and climb volcanoes.It has also boosted agricultural output and manufacturing by improving roads and the electricity supply.Rwanda's experiences are high on the forum's agenda, which will focus on how African countries can harness technology to spur growth."The slump in energy and commodity prices has demonstrated the urgent need for greater diversification and entrepreneurship across Africa," said the forum's head for Africa, Elsie Kanza.Rwanda "stands as a good example of how long-term planning and savvy investing can lead to sustainable and inclusive growth".Foreign direct investment in Rwanda would probably rise 36% this year to $1.5-billion, the nation's development board said in April.Although global economic recovery was taking longer than expected, and the slowdown in China was limiting growth for commodity-based economies, Rwanda had decided to focus on marketing itself as a conference destination to support growth, Finance Minister Claver Gatete said in the capital, Kigali yesterday...

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