Rwanda's political stability attracts German companies - opportunities and challenges in an emerging market

Rwanda's political stability attracts German companies - opportunities and challenges in an emerging market

promotion with authoritarian leadership: parliamentary and presidential elections in Rwanda

On July 15, parliamentary and presidential elections take place in Rwanda. This political process, which has been carried out regularly since 2000, will largely mean that President Paul Kagame is once again elected by the Rwandan Patriotic Front (RPF) for a term until 2029. However, this political climb goes hand in hand with an authoritarian leadership and raises important questions.

Political stability in Rwanda is viewed by many as a great achievement by the government and has made the country an attractive investment goal. In fact, President Kagame has created a positive business environment in which corruption hardly plays a role anymore and foreign companies can take the start without experience of Africa. Support on the part of the government agencies for investors is estimated. However, this authoritarian leadership also has a dark side.

Human rights organizations such as Human Rights Watch have repeatedly criticized Rwanda about human rights violations and violations of democracy. The government has a repressive policy to keep control of the country. This approach is considered by some as a necessary security measure in view of the traumatic experiences of the genocide in 1994, but it also causes concerns.

The geographical location of Rwanda, cut off from large markets and without direct port access, represents additional challenges. Nevertheless, the country offers a wide range of business opportunities for German companies. In areas such as energy, transport, water and social housing, there are construction projects that open export and advice. For example, German companies can provide construction machinery, building materials, engineering services and construction supervision. In addition, Rwanda plans to increase food production in order to supply the rapidly growing population. Here there are opportunities for suppliers of fertilizers, agrochemicals and agricultural machinery.

Another industry with great potential is tourism. Kigali, the capital of Rwanda, is on the advance as a conference location and attracts more and more events and visitors. The tourism sector is expected to bring new impulses for the country's economy.

Despite the challenges facing Rwanda, the gross domestic product will continue to grow sharply. While growth in 2023 was exceptionally high at over 8 percent, it is forecast that it will progress somewhat slower in the coming years. Estimates by Economist Intelligence Unit (EIU) and the African Economic Outlook of the African development bank indicate that the growth of gross domestic product will also be around 7 percent mark in the next few years.

The future of Rwanda will be largely influenced by the political decisions and developments. The parliamentary and presidential elections in July will mark an important milestone and show whether the country remains on a stable growth course or whether there will be changes.