Can Rwanda Achieve a $6,000 Per Capita Income by 2035? A Deep Dive into the Feasibility of This Ambitious Goal

In recent years, Rwanda has emerged as a shining example of resilience and ambition in Africa. The country’s transformational journey from the depths of tragedy in the 1990s to becoming a model of good governance, rapid economic growth, and environmental sustainability has been remarkable. Today, Rwanda’s Ministry of Finance has set an ambitious target: to achieve a $6,000 per capita income by 2035.

This goal aligns with Rwanda's Vision 2050, which seeks to position the nation as an upper-middle-income economy by the middle of the century. However, reaching this benchmark within just 11 years is a daunting challenge. To put it into perspective, Rwanda’s current GDP per capita stands at approximately $1000.22. Achieving this goal requires more than maintaining the rapid growth seen in recent years it demands sustained transformation across every facet of the economy.

In this article, we will explore the feasibility of this target by analyzing Rwanda’s current trajectory, identifying key opportunities, and assessing the structural challenges that could impede progress. We’ll also draw lessons from global success stories and examine whether Rwanda can replicate similar outcomes.

Understanding the $6,000 Target

The current state of the Rwandan Economy

As 2023:

GDP per Capita is $1000.22

The population is approximately 14.09 Million

using these numbers, Rwanda's total GDP in 2023 can be calculated as:

GDP(2023) = GDP per Capita x Population

GDP (2023) = $1000.22 x 14,090,080 = $14,105,286,609.60

So, the Gross Domestic Product (GDP) for Rwanda in 2023 is approximately $14.11 billion. To achieve a GDP per capita of $6,000 by 2035, we need to consider population growth, economic expansion, and structural transformation.

Mathematical Projections

1. Population growth

Rwanda’s population is currently growing at an estimated rate of 2.4% annually. Using this rate, we can project the population in 2035 using the formula for compound growth:

2. Required GDP Growth

If Rwanda aims to achieve $6000 GDP Per Capita by 2035, the total GDP required would be: 

GDP(2035) = GDP Per Capita (targeted) x Population(2035)

GDP(2035) = $6000 x 18,158,000 = $108,948,000,000 So, the required GDP for Rwanda in 2035 would be approximately $109 billion.

3. Annual Growth Rate Needed

The compound annual growth rate (CAGR) needed to grow Rwanda’s GDP from $14 billion in 2023 to $109 billion by 2035 can be calculated as:

This means Rwanda needs an average annual growth rate of 19.1% over the next 11 years, which is significantly higher than the 8–10% growth rate observed in recent years.

Challenges in Achieving 19.1% Growth

Structural Transformation

Rwanda’s economy remains heavily reliant on agriculture, which employs over 60% of the population but contributes less than 25% to GDP. To achieve high growth, Rwanda must accelerate its transition toward industrialization and high-value services.

Investment Needs

The scale of investment required to sustain 19% growth is immense. Infrastructure, education, healthcare, and technology will require significant public and private sector funding.

Global Economic Risks

Rwanda’s small, open economy is vulnerable to external shocks such as global recessions, commodity price fluctuations, and climate-related disruptions.

Inclusive Growth

Rapid GDP growth must translate into widespread economic benefits. Income inequality and unemployment could undermine progress if growth is not inclusive.

Strategies for Achieving $6,000 Per Capita Income

Industrialization and Export Growth

Industrialization will play a critical role in Rwanda’s economic transformation. The following steps are crucial:

• Export Diversification: Rwanda must reduce its reliance on traditional exports like coffee and tea by developing industries such as manufacturing, agro-processing, and technology.
• Regional Trade: Leveraging the African Continental Free Trade Area (AfCFTA) can enhance market access and boost exports.

Investment in Human Capital

To sustain high growth, Rwanda needs a skilled workforce. Investments in education, vocational training, and entrepreneurship will be essential. Programs like Vision Umurenge and partnerships with global institutions can accelerate progress.

Digital Economy

Rwanda’s focus on ICT, including the Kigali Innovation City, positions the country to lead in Africa’s digital transformation. Expanding access to technology and internet connectivity will create opportunities in e-commerce, fintech, and other digital sectors.

Infrastructure Development

World-class infrastructure is key to attracting investment and improving productivity. Projects like the Bugesera International Airport and regional road networks will enhance Rwanda’s connectivity.

Sustainable Development

Green growth is vital for long-term success. Rwanda’s leadership in environmental initiatives, such as banning plastic bags and reforestation, positions it as a model for sustainable development.

Economic Growth: Momentum and Prospects

Rwanda’s economy has been growing at an impressive rate of 8–10% annually over the past decade, driven by investments in infrastructure, agriculture, services, and a burgeoning ICT sector. The government’s focus on good governance, zero tolerance for corruption, and inclusive policies have created an enabling environment for growth. Programs such as Vision 2020 Umurenge, designed to alleviate poverty, have also supported this trajectory.

But sustaining and accelerating this growth requires addressing fundamental questions:

• Can Rwanda diversify its economy to reduce reliance on agriculture, which still employs over 60% of the population?
• How can Rwanda attract more foreign and domestic investment to spur industrialization and technology adoption?
• Is Rwanda’s workforce prepared to meet the demands of a modern economy?

These are pivotal issues that must be tackled to maintain momentum and reach the ambitious $6,000 target.

Sectoral Transformation: Agriculture, Industry, and Services

The transformation of Rwanda’s economy hinges on the ability to transition from a predominantly agrarian society to one driven by industry and services. Each sector plays a critical role:

Agriculture

Rwanda’s agricultural sector is the backbone of its economy, but it is largely characterized by subsistence farming. Modernizing agriculture through mechanization, irrigation, and access to markets will be essential. Initiatives such as the Crop Intensification Program (CIP) have already boosted productivity, but there is room for improvement in areas such as post-harvest handling and value addition.

Industry

The industrial sector, particularly manufacturing, remains underdeveloped, contributing less than 20% to GDP. Rwanda must focus on creating an environment conducive to industrial growth. This includes enhancing access to affordable energy, improving infrastructure, and supporting small and medium-sized enterprises (SMEs). The government’s push for the “Made in Rwanda” campaign is a step in the right direction, but scaling up production and competing in regional and global markets will require significant effort.

Services

The services sector has shown tremendous potential, particularly in ICT and tourism. Kigali’s transformation into a tech hub is notable, with initiatives like Kigali Innovation City attracting global attention. Tourism, anchored by Rwanda’s stunning landscapes and conservation efforts, remains a key revenue generator. However, expanding these sectors to create high-value jobs will be critical for achieving higher income levels.

Demographics: Harnessing Rwanda’s Youthful Population

Rwanda’s population is young and growing rapidly, presenting both an opportunity and a challenge. A youthful workforce can be a significant driver of economic growth if equipped with the right skills and opportunities. Investments in education, vocational training, and entrepreneurship will be crucial. Programs such as “Hanga Ahazaza,” which aims to prepare the youth for jobs in hospitality and tourism, need to be scaled up to include other sectors like manufacturing and technology.

At the same time, creating enough quality jobs to absorb the growing labor force remains a pressing concern. Rwanda’s unemployment rate, particularly among the youth, underscores the need for policies that encourage job creation in high-growth sectors.

Infrastructure and Investment

Rwanda’s government has made substantial investments in infrastructure, ranging from roads and energy to ICT. The Kigali Convention Centre, the expansion of Kigali International Airport, and the rollout of 4G internet across the country are examples of projects designed to position Rwanda as a regional business hub. However, sustaining high levels of public investment requires careful fiscal management to avoid over-reliance on debt.

Attracting private investment is another critical component. Rwanda’s business-friendly environment, ranked second in Africa by the World Bank’s Ease of Doing Business Index, is a strong foundation. However, more needs to be done to attract large-scale foreign direct investment (FDI) in manufacturing and technology.

Macroeconomic Stability: A Pillar for Growth

Rwanda’s prudent macroeconomic management has been a cornerstone of its success. Low inflation, a stable currency, and manageable levels of public debt have created a conducive environment for growth. However, the ambitious growth targets for 2035 may necessitate higher levels of borrowing, which could strain the country’s fiscal position. Balancing growth-driven investment with debt sustainability will be critical.

Challenges to Overcome

1. Inequality and Poverty: While Rwanda has made significant strides in reducing poverty, inequality remains a challenge. Ensuring that growth benefits all segments of society, particularly rural populations, will be vital for social cohesion and sustainability.
2. Global Economic Shocks: Rwanda’s small, open economy is vulnerable to external shocks such as commodity price fluctuations, pandemics, and geopolitical tensions.
3. Climate Change: As a predominantly agrarian economy, Rwanda is highly exposed to the effects of climate change. Building resilience through sustainable practices and diversification is imperative.
4. Debt Sustainability: As Rwanda invests heavily in infrastructure and development projects, managing public debt levels will be crucial to avoid fiscal stress.

Opportunities to Leverage

1. Regional Integration: Rwanda’s strategic location in East Africa and its active participation in the African Continental Free Trade Area (AfCFTA) offer opportunities for trade and investment.
2. Digital Economy: The country’s focus on ICT can drive productivity and create new economic opportunities, particularly for the youth.
3. Green Growth: Rwanda’s commitment to sustainability can position it as a leader in green energy and conservation-based tourism.

Global Lessons and Rwanda’s Unique Path

Countries like South Korea and Singapore have shown that rapid economic transformation is possible through industrialization, education, and good governance. However, Rwanda must chart its path, leveraging its unique strengths in governance, innovation, and resilience.

Is the $6,000 Target Feasible?

Achieving $6,000 GDP per capita by 2035 is an ambitious but achievable goal if Rwanda can maintain consistent, transformative growth. The required 19.1% annual growth rate is challenging but not unprecedented. To succeed, Rwanda must:

• Invest heavily in industrialization, technology, and infrastructure.
• Foster partnerships with the private sector and international investors.
• Ensure inclusive and equitable economic growth.

Rwanda has defied the odds before, and with strong leadership, a clear vision, and collective effort, it can turn this ambitious dream into reality.

Conclusion

Rwanda’s ambition to achieve a $6,000 per capita income by 2035 is a bold and inspiring vision. While the challenges are significant, the country’s track record of resilience, innovation, and effective governance provides a strong foundation for success. By addressing structural issues, leveraging its youthful population, and maintaining macroeconomic stability, Rwanda has the potential to transform its economy and improve the lives of its citizens.

Achieving this target will require a collective effort from policymakers and private sector stakeholders to citizens themselves. It is a challenge that calls for long-term planning, adaptability, and unwavering commitment to the vision of a prosperous Rwanda.

By Donald Masimbi