Rwanda’s digital economy

Posted on August 12, 2017 12:00 am

In recent years, the Rwandan government launched the vision 2020 digital economy campaign to boost the country’s digital economy. Among key targets are helping farmers and fishermen to go digital, creating local tech startups valued at a total of US $100 million, and becoming the largest digital economy in East Africa by 2020.In a report titled unlocking Rwanda’s digital opportunity, authors predict that digital economy would contribute to the national economy to the tune of $600 million annually by 2020. The digital economy has been defined by the Rwandan Government as the network of economic and social activities that are enabled by information and communications technologies, such as the internet, mobile and sensor networks. This includes conducting communications, financial transactions, education, entertainment and business using computers, phones and other devices. Rwanda has made a commitment to becoming a leading digital economy, and faces competition from comparable countries like Kenya that have also adopted a focus on promoting a local digital economy. Others argue that without open access to appropriate categories of information like the case in Kenya, Rwanda may not enjoy the potential innovation in the digital economy.Copyright law is an important part of Rwanda’s digital infrastructure and is relevant to commercial, creative and cultural policy. Some stakeholders pointed out that the Rwanda’s digital economy is part of the economy generally and not a separate entity. Furthermore, it should be interpreted broadly, to include the contributions made to the Rwandan economy by formal education, self-education, health services, social services, volunteer work and unpaid domestic work, as well as by commerce, agriculture, mining and industry.Alongside digitisation of copyright material, online activities are a major aspect of the digital economy in Rwanda.The internet has profoundly altered the delivery of government services, access to education and information, commercial innovation, social interaction and community engagement with culture and continues to evolve at a rapid pace.In this context, copyright has a profound influence in regulating access to education, culture, social interaction, commercial innovation and the provision of essential government services.To unleash the digital economy potential, several initiatives have been done by the Rwandan government.For example, the national e-commerce roadmap was set up to support the development of the local e-commerce ecosystem, to fund the e-commerce startups, to protect consumers, and to double down on cybersecurity.

Further, the e-commerce entrepreneurs are being eased in processing business licenses as they just need to register their business with startup associations, instead of applying through a government business registration office. Another initiative is to increase the broadband networks all over Rwanda.However, despite huge potential and its government’s supportive initiatives, the country’s digital market still face challenges.To start with, limited access to technology is still persistent. The data from the Internet Live Stats indicates that until now, internet penetration in Rwanda still stood at less than 20 per cent. The rate is less than one-third that of Kenya which is at 60 per cent.Internet access is mostly enjoyed in the capital Kigali and major towns. Access is still poor in smaller urban areas, and even worse in remote areas. Despite the government support of the digital ecosystem, Rwanda is yet to see the real outcome in far-flung parts of the country. Also, Rwanda still lacks digital competitiveness. The recent data showed that the country still has to work hard to increase its digital competitiveness and is still held back by relatively weak infrastructure and poor institutional quality.Heavy reliance upon cash transaction would definitely diminish Rwanda’s digital competitiveness. Recent report showed that e-commerce businesses in Rwanda are constrained by the absence of diversified financial products and heavy dependence oncash payment.In fact, to maximize the digital economy potentials in Rwanda, the use of cashless mobile payment should be heightened.To address the major challenges, the recently reelected government of President Paul Kagame should apply strategic yet sweeping measures by focusing on creating quality instead of quantity-based digital economy. Rwanda must change its own perception to no longer create more and more e-commerce, but focus more on quality digital business.Rwanda has to learn from countries like Kenya focusing on quality digital economy that have proved themselves to be more competitive. Kenya has quality digital competitiveness such as better internet penetration, digital infrastructure, more accessible cashless infrastructure, and advanced tech-savvy society.It is also creating a gradual cashless society. Rwanda must strive its best to build a conducive ecosystem for more non-cash payments. They have to educate and stimulate public, small and medium enterprises, and technopreneurs to start doing business using digital transactions. In my view, for Rwanda to succeed, it need to implement an integrated and holistic approach to achieving the vision 2020 and Rwandan government’s current digital initiatives need to be implemented fully and on time.

Contador Harrison