The Rwandan Government believes that the service sector will define the country’s future development. Still, agriculture remains the backbone of the economy. According to the Rwanda Development Board (RDB), it accounts for about a third of Rwanda’s GDP and generates approximately 70% of the country’s export revenue. A little less than 80% of the population is employed in agriculture, constituting the main source of income for rural households, especially for women.
Accepting this reality is crucial, and any plan for future development must fully consider the 80%. Both the public sector and private sector must take steps to transform agriculture and ensure that Rwanda’s rural population reaps the many benefits of modernization. With this in mind, Karisimbi Business Partners is currently engaged in the early stages of a 5 year 8 million EUR public-private-partnership (PPP), entitled “Sugar: Make it Work.” The project brings needed investment to the sugar cane sector with financing from the Dutch Government and Rwanda’s sole sugar processor, Kabuye Sugar Works (KSW), with additional participation from the Ministry of Agriculture and Animal Resources.
Currently, sugar cane farmers, as well as KSW, face a multitude of challenges. A shortage of suitable land available for sugarcane agriculture restricts production. Severe flooding and deficient water drainage/irrigation constrains optimal yields on existing land, forcing Rwanda to import much of its sugar and leaving consumers highly dependent on volatile prices. With a growing population and increasing consumer expenditure, both domestically and regionally, Rwanda risks missing a crucial opportunity to grow a local industry with great potential.
The “Sugar: Make it Work” PPP is making critical investments in water management infrastructure in order to reduce flooding so that KSW and outgrower farmers can make the most of available marshland. Within the next decade, through improved water management and the introduction of remote sensing technology, local production of sugar should nearly double. This could lead to an increase in outgrower and KSW estate employment by approximately 41%, as well as add new highly skilled agro-IT service jobs in the sugar cane sector. With improved capacity to track and monitor crops, KSW and outgrower farmers will be in a better position to predict sugar cane yields, respond to disease outbreaks and optimize the harvesting and transport of crops. Additionally, the project will increase technical and business training for outgrower farmers, improving their participation in the value chain.
Without doubt, the development of Rwanda’s service sector will define its path towards greater economic, social and political development.
Diversification towards a knowledge-based economy would set Rwanda apart from other countries in the region and the African continent as a whole. The development of a service-based economy can create new jobs, boost labor productivity and allow the country to transcend its limitations, such as a lack of mineral resources, small population and landlocked geography.
We recognize this great potential, but the agricultural sector cannot be ignored. Opportunities abound to increase production, generate greater employment, introduce new technologies and improve rural livelihoods in general. We’re excited by projects like Sugar: Make it Work because it brings together public and private sector actors to tackle some of the most pressing problems faced by farmers in Rwanda. Taking large steps to transform a country like Rwanda is admirable and even offers hope to other countries on the continent. Indeed, Rwanda should be ambitious and chart its own path towards development. But it should do so keeping that 80% in mind.