THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Rwanda

Ranked 88th of 149

At a glance

Ranks

88 th on the Legatum
Prosperity Index™

95th
35th
52nd
123rd
77th
98th
84th
99th
110th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Rwanda performs best on Business Environment and Governance and scores lowest on the Education sub-index.

Visit our Rankings table to see how Rwanda compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Rwanda is a low-income country that is over-delivering prosperity given its wealth. The country has the 7th biggest prosperity surplus of the Index, which has been growing since 2007 and is now of the same size as Denmark’s and that of the Netherlands.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

The Prosperity Index captures Rwanda as a country that outpaces its regional peers in many sub-indices, although there remain some weak areas whose improvement would push the country further towards the top half of the Index.

The most striking finding concerns the remarkable improvement that has occurred in the Business Environment sub-index, where Rwanda has posted a 75 rank increase over the past decade. This reflects concerted efforts by policy-makers and international agencies, which have implemented reforms that facilitate doing business: as a result, the ease of resolving insolvency has increased, and getting credit has become much easier that now Rwanda sits with the most developed nations and ahead of many others (such as its “target country” Singapore). Yet, reliable, affordable electricity appears to be lacking, and recently implemented programmes such as the World Bank ‘Rwanda Electricity Sector Strengthening Project’ are meant to address this issue.

Since 2007, Rwanda has posted a 75 rank improvement in the Business Environment sub-index, whose level now exceeds both Sub-Saharan Africa and world averages.
Since 2007, Rwanda has posted a 75 rank improvement in the Business Environment sub-index, whose level now exceeds both Sub-Saharan Africa and world averages.

The Economic Quality sub-index shows a mixed performance: while unemployment rate is remarkably low (0.6%, the 3rd lowest value in the world, and the lowest in Africa), poverty remains widespread. Although it has reduced since 2007, in 2016 44.9% of Rwandans still live under the national poverty line. Additionally, the country is dependent on foreign aid, something on which policy-makers are focusing while trying to foster national resources and accelerate growth. For example, Rwanda has joined the East African Community in order to diversify and enlarge its market, and the government has been developing its Vision 2020, whose primary objective is to transform the country from a low-income, agriculture-based economy to a middle-income, service-oriented and knowledge-based economy.

The Index has also recorded notable improvement in the Governance sub-index, where Rwanda has moved up 19 ranks since 2007. Particularly impressive is the percentage of women sitting in Parliament: 63.8%, the highest value among all nations in the Index. However, when it comes to political rights and civil liberties, Rwanda presents some important deficits that are limiting the country’s delivery of prosperity.

As far as the health sector is concerned, Rwanda does relatively well if compared to its regional peers. Since 2007, It has moved up 16 ranks, with two notable improvements: life expectancy at birth increased from 57.9 to 64.5 years, and the percentage of Rwandans with access to improved sanitation facilities has gone from 54.3% to 61.6%.

Quite surprisingly though, the weakest performance of Rwanda comes in the Education sub-index. Specifically, poor literacy is common mainly among adults and, despite having risen over the past decade, it remains far below the world average and slightly above that of Sub-Saharan Africa.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.

Special Analysis

Special Analysis

OVERALL

Rwanda has grown more prosperous since 2007, posting a 19 rank improvement in the Prosperity Index. Given its wealth, the Index has recorded a prosperity surplus in all the nine sub-indices, although the size of these gaps varies considerably.

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Areas of Success
Areas of Success

The biggest prosperity surplus comes in the Business Environment sub-index, which is also the biggest of the Index. Considering that the 1994 genocide had severely limited the nation’s ability to attract investment, the success of recent reforms is even more remarkable, as is the GDP growth rate of the last decade, which has placed Rwanda among the fastest growing economies in the world. Rwanda has a notable prosperity surplus also in the Governance sub-index, where the country has the biggest positive prosperity gap in Africa.

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Areas of Little Change
Areas of Little Change

Little movement has been recorded in the Safety & Security and Personal Freedom sub-indices. The security situation remains volatile, mainly because of the high number of refugees and the relatively high percentage of people with difficulties in getting access to adequate food (60% of the population). Additionally, issues remain regarding limited freedom of the press and restricted civil liberties. This notwithstanding, a prosperity gap analysis based on Rwanda’s wealth reveals a prosperity surplus for both these sub-indices.

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Areas of Improvement
Areas of Improvement

The main area for concern is Education, where, although Rwanda keeps a small prosperity surplus, reforms are urgently needed. This sub-index is in fact Rwanda’s worst performance, and the only one in the bottom 30 of the Index. Together with the low adult literacy rate, inequality in education is also alarming, as is the low percentage of workers with either secondary or tertiary education. Lastly, although the Index has recorded a notable 37 rank improvement in the Social Capital sub-index over the past decade, it remains among the weaker performing sub-indices of Rwanda, with particularly low scores in donations and volunteering.