Economics: What can Chad learn from Rwanda?

The National Investment and Export Agency (ANIE) signed a memorandum of understanding with the Rwanda Development Board (BDR) on March 21, 2022. To better understand the essence of this agreement, we asked the following question to our expert speaker and economic observer Amin Idris. What can Chad learn from Rwanda?

Last Monday (March 21), ANIE CEO signed a cooperation agreement with the Rwanda Development Board. The agreement signed between CEO Nassur Delio and CEO Claire Akamanze is a concrete expression of the desire of the two government agencies to intensify their cooperation and cooperation on issues of mutual interest. Apart from this common desire, this type of agreement also shows that South-South cooperation is possible and can be beneficial for our countries.

Rwanda is known in Africa and elsewhere in the world for its economic achievements. This success is, of course, the result of a very good management system put in place by the Rwandan authorities; but it also owes much to the substantial work done by Ms. Akamanze’s teams. The RDB, unlike many national development agencies in Africa, has a triple mandate: promoting foreign investment on Rwandan soil, but also being the bearer of national commercial projects. The Rwandan agency also coordinates all development activities in the country. Rwanda’s very good scores in international business rankings as well as in rating agencies are also the result of RDB’s field work to normalize the business climate. It should also be added that the RDB acts as the VRP agency for Rwanda: promoting and selling the image of Rwanda as a tourist destination, a place where life is good and a place where it is easy to invest, is part of the activities of this one-of-a-kind government agency on the African continent.

The RDB results speak for themselves: over the past three years, VAG (Wolksvagen), Renault, BioNTech and other global manufacturers have built factories in the country. Rwanda also positions itself as the main platform for the development of continental IT solutions in all areas of industry and business. The RDB receives support for its projects from another institution: the Rwandan Development Bank.

Can Chad take advantage of this partnership?

Chad has always been economically unstable. The explosion of oil in the Chadian economy in the early 2000s led the government to invest heavily in education (building schools and universities), healthcare (building medical centers), and even road infrastructure. However, from a macroeconomic point of view, oil has not changed the economy of Chad.

See also: Rwanda and Chad sign an agreement on investment and trade cooperation

In the middle of the decade 2000-2010. the government nevertheless proclaimed its desire to make the country not only a regional industrial basin, but also an authoritative supplier of agricultural products. The will of the government was never implemented. Three key factors were missing: sound management, a serious plan, and the necessary skills. On the other hand, MIDI-era Chad did not take development planning seriously. PND-1, for example, was more or less unsuccessful due to political meddling and the gluttony of some public figures who thought they saw promising projects as an additional get-rich-quick opportunity.

Around the same period, Rwanda had a solid, well-structured and carefully planned development plan. This was planned to make the country a popular destination for investors, especially due to what the Rwandan authorities considered their country’s competitive advantages: its geographic location, its stability, and the quality of its governance. By signing an agreement with the RDB, ANIE could draw inspiration from what the Rwandans have done and how they work. Rwandans have long understood that there is no development without private investment. But there is no investment without good governance and without transparency. On the other hand, development is carefully planned.

Revisit ANIE’s mandate and increase its resources

ANIE could take inspiration from the RDB to revise its charter and mandate. For example, it could turn into a real agency for the promotion of investment, industrial development and entrepreneurship. This triple mandate could allow him to encourage the creation and implementation of structuring projects such as free industrial parks or even integrated technology investment platforms. Free industrial zone projects developed around thematic value chains are among the most effective ways to develop a national industrial structure. A free industrial zone specializing in the value chain will provide potential investors with a physical platform, energy autonomy and focus on supply chain management as well as export services. Typically, in industrial investments, physical platforms (civil engineering, energy supply) account for approximately 30% of the invested capital. Thus, such a platform will reduce the amount of investment and construction time, which will be an additional incentive for any investor.

RDB uses exactly this approach. Senegal, through its sovereign wealth fund and national industrial development agency, also uses the same processes. Ethiopia or Ghana have also experienced this. Virtually all African countries are now investing in the construction of industrial zones. Togo is one of the latest examples. Chad, unfortunately, is still lagging behind. But let’s bet that the signing of these Chadian-Rwandan agreements and the visit of the CEO of ANIE to RDB will bring the necessary inspiration to dare to dream … to dream a dream that is very affordable from a financial point of view, since the construction of a fully autonomous industrial zone with its own electrical infrastructure , which has a turnover of only about 50 billion CFA, which is much less than the ONAMA building … but in order to realize this dream, it is necessary to support ANIE, expand its authority and strengthen its human and financial resources.

Amin Idriss

Economic Observer

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