Rwanda welcomes G 20 Compact with Africa Initiative
Rwanda has recommended the G20 for Compact with Africa, an initiative that supports reliable financial framework in order to increase investment opportunities. The initiative also seeks to push for more sustainable infrastructure as well as create jobs and employment in African countries.
The CWA initiative covers three blocks: the Macroeconomic Framework, the Business Framework, and the Financing Framework. The first group of countries to develop the Compacts are Côte d’Ivoire, Morocco, Rwanda, Senegal and Tunisia.
Speaking in Berlin at the “G20 Africa Partnership - Investing in a Common Future” conference, Paul Kagame, the President of Rwanda said the time was right to put commercial and investment relations at the centre of the joint agenda. President Kagame pointed out that a broader relationship is therefore necessary between Africa and higher-income countries, together with the international financial institutions that serve everyone.
President Kagame further noted that bureaucratic red tape serves special interests, not the public interest and that it contributes to poverty and slows progress generally. He underscored that eliminating such barriers is a very important first step.
“In Rwanda, we have seen good results from adopting this approach. As we climbed the ranks of the World Bank’s Doing Business report, there has been increased attention from investors. But administrative reform on its own is not enough, and so the second job for the governments is to reduce the cost of enterprise by building critical infrastructure through public-private partnership,” President Kagame said.
Rwanda sees the private sector and private investment as the engine of growth and development, and this is shown in the long term Vision 2020 elaborated two decades ago, as well as the successor Vision 2050.
As such, Rwanda has implemented reforms geared at ensuring macroeconomic stability over the last two decades. This has allowed the country to register inflation that averaged 5% and GDP growth rates of above 8% on average since 2000.
At the same time, Rwanda also managed to keep its public debt at low levels and is categorised among countries with low-risk of debt distress.
Speaking at a high level Investor Roundtable themed “support the Compact with Africa and to launch a structured dialogue between key stakeholders and private investors on opportunities and challenges for investment engagement in African countries”, the Minister of Finance and Economic Planning Claver Gatete said that given the positive outlook, Africa provides increasingly attractive investment opportunities.
Minister Gatete however noted that despite all the progress made, to be able to flourish, private investment still faces challenges related to the cost of doing business. He pointed out that infrastructure gap is far from being bridged and that the cost of financing when investing in Africa remains too high due to perceived and actual risks.
“We are pleased that the international community is committing to supporting the Compact countries to bridge gaps in infrastructure and finance de-risking,” Minister Gatete said.
He underscored that there should be no assumptions that public-private opportunities are the only ones worth investing in Africa, as the continent is increasingly open for business.
Rwanda wants to support investors starting operations to grow profitably serving the domestic, regional and international markets,” Minister Gatete added.