Page 8 - AfrElec Week 29 2021

AfrElec INVESTMENT AfrElec

Private investment needed in Rwanda to

meet sustainable development goals

RWANDA RWANDA could be in danger of missing its sus- management, irrigation and housing.
tainable development goals as the coronavirus Declining economic activity has also reduced
(COVID-19) pandemic has pushed the econ- the government’s ability to collect revenue amid
omy into recession in 2020, the World Bank has increased fiscal needs, worsening the fiscal
warned. situation.
The economy shrank by 3.7% in 2020 as Public debt reached 71% of GDP in 2020, and
measures implemented to limit the spread of the is projected to peak at 84% of GDP in 2023.
coronavirus and ease pressures on health sys- “Narrowing fiscal space calls for a progressive
tems brought economic activity to a near stand- shift in Rwanda’s development model away from
still in many sectors. the public sector towards a predominantly pri-
Although the economy is set to recover in vate sector driven model, while also stepping up
2021, the report notes the growth is projected efforts to improve the efficiency of public invest-
to remain below the pre-pandemic average until ment,” said Calvin Djiofack, the World Bank’s
2023. senior economist for Rwanda.
The bank said that private sector financ- While the report findings establish clearly the
ing would be essential for Rwanda to continue gains of public infrastructure development for
investing in the critical infrastructure needed to the country as whole, it also stressed that these
achieve its development goals, such as providing gains tend to benefit urban and richer house-
universal access to power. holds most.
Rwanda has to capitalise further on its foreign “Rwanda will need to rebalance its investment
direct investment (FDI) regulatory framework, strategy from prioritising large strategic capi-
considered one of the best on the continent, to tal-intensive projects toward projects critical for
attract and retain more FDI; to foster domestic broad-based social returns to boost the poten-
private capital mobilisation through risk-shar- tial of public infrastructure to reduce inequality
ing facilities that would absorb a percentage of and poverty,” said Rolande Pryce, World Bank
the losses on loans made to private projects; and Country Manager for Rwanda. “Any step toward
to avoid unsolicited proposals of public-private the Malabo Declaration to allocate 10 percent of
partnership (PPP) initiatives; as well as to build a future infrastructure investment to agriculture,
robust, multisector PPP project pipeline, target- allied activities and rural infrastructure will go a
ing sectors with clearly identified service needs long way to achieving this goal.”™
such as transport, water and sanitation, waste

P8 www. NEWSBASE .com Week 29 22•July•2021