Rwanda Overtakes Kenya to Become Second Freest Economy in EAC

Rwanda has edged past Kenya to claim the position of the second most economically free country in the East African Community (EAC), according to the latest Index of Economic Freedom by the Heritage Foundation.

The economic think-tank ranked Rwanda with a score of 54.8, placing it just behind regional leader Tanzania, which scored 59.3. Kenya, which had previously held the second spot in the EAC, now shares the same score as Rwanda but has slipped to 21st place in the Sub-Saharan Africa region, compared to Rwanda’s 20th position.

The data marks a significant milestone for Rwanda, which jumped 10 places from its previous position of 30 in the region. Globally, Rwanda climbed from 135 to 120, while Kenya dropped one position from 120 to 121 out of the 184 countries surveyed.

The report assesses nations across various pillars of economic freedom, including governance, trade openness, regulatory efficiency, and fiscal health.

Rwanda’s advancement is attributed to improvements in reducing corruption, simplifying business regulations, and maintaining robust fiscal policies. In contrast, Kenya’s standing has been affected by concerns over high public spending, increasing tax burdens, and regulatory inefficiencies.

Despite being one of the region’s largest economies, Kenya’s performance in the report was described as “mostly unfree.” While its score remains above the regional average of 53.2, it falls below the global average of 59.7.

“The rule of law is weak, and local courts are subject to substantial political interference. Poor protection of property rights and widespread corruption discourage entrepreneurial activity,” the report stated.

It further noted that although there have been efforts to reform public finance management, the progress has been marginal, and the implementation of reforms has been uneven.

As countries in the EAC strive to enhance their investment attractiveness, Rwanda’s steady climb serves as a case study on the impact of policy reforms and good governance. Meanwhile, Kenya faces the challenge of rebuilding investor confidence through improved fiscal discipline and institutional transparency.

In other news: Rituals Performed Once a Pope’s Death Is Confirmed

Rwanda Overtakes Kenya to Become Second Freest Economy in EAC