THE ROLE OF PRIVATE SECTOR TO THE ECONOMIC DEVELOPMENT OF RWANDA

Introduction

Rwanda is a more competitive country that supports businesses and investments, ranked the second easiest to do business in Africa and twenty-ninth in the World (World Bank, 201😎.This has been achieved due to the reforms that impacted the business regulatory environment (National Bank of Rwanda, 2017). Daniel and Asep supplement that the growth in private sector has a significant impact to poverty alleviation, unemployment reduction, and the growth of country’s economy (Daniel and Asep, 2007). The private sector in Rwanda stands at good state but the problem of poverty and unemployment remained a challenge in Rwanda, with 38.2% of population living below poverty line, and unemployment rate of 16.0% (National Institute of Statistics of Rwanda, 201😎. My research is aimed to evaluate the impact of private sector to the growth of economy of Rwanda at country level.

Background of the study

The development of private sector is believed to be driving force to reduce social economic problems, poverty and unemployment that face most of developing and underdeveloped countries (Abubakar, 2012). The problem of poverty is found in many countries across the globe. To unlock the problem of poverty which remained a major challenge worldwide, the United Nations set the Millennium Development Goals (MDGs), which were to be achieved by 2015. The MDGs comprised of eight goals purposed to improve the lives of world’s poorest people and were signed by leaders of 189 countries at the United Nations Millennium Summit in 2000 (Lomazzi et al., 2014).

The Government of Rwanda has put effort in the MDGs and other programmes aimed at reducing the prevalence of poverty. Those programmes include the Economic Development and Poverty Reduction Strategies (EDPRS), and Vision 2020 Umurenge Programme, which were designed with the purpose of accelerating poverty reduction. The implementation of both global and national policies boosted the economy of Rwanda through increased productivity and development of the physical quality of the life. The data from World Bank show that in Rwanda, the Gross National Income per capita measured using atlas method in current US$ risen from US$240 in year 2000 to US$720 in 2017.

The development of private sector plays a crucial role in the growth of the country’s economy. This is supported by the study of Mathieu Chemin, in the article “The impact of the Judiciary on Entrepreneurship: Evaluation of Pakistan’s Access to Justice Program”. Rwanda had put much effort in the development of the private sector through different reforms, which resulted in becoming the second country in Africa easiest to do business (BNR, 2017). These reforms were supporting the Rwanda Vision 2020 development strategy, which aimed at transforming Rwanda into a middle-income economy at US$1,240 of income per capita by 2020. Although the private sector stands at a good state, the Rwandans are still facing chronic poverty (National Institute of Statistics of Rwanda, 201😎.