Kagame’s “Economic Miracle” is fraud
Source: African Dictator
If you read the New Times or the Rwanda News Agency regularly, you are fed a strong diet on how Kagame’s “economic miracle” is deepening. According to these mouthpieces and their master, Rwanda is cruising towards Vision 2020 where it is to enter the league of middle-income nations in 9 years. It is, however, a no-brainer to demonstrate how Kagame’s economic miracle is a fraud.
Latest diet of Kagame “Economic Miracle”
Citing Finance Ministry in a headline titled “Incomes rise as Rwanda’s economy expands to US$5.5 Billion” the Rwanda News Agency of Tuesday 12 July 2011 highlighted the following claims:
- Rwandans earned more in the past year compared to any other period in the history of the country – as the economy expands to more than US$5.5billion – up more than 300% compared to the year 2000.
- The formal sector accounted for 24% of GDP (including taxes); the informal sector 46%; non-monetary production 19%; and government 11%.
- Export crops grew by 14% which recovered from a decrease of 15% in 2009.
- The tertiary sector grew by 10% in 2010.
- Manufacturing and construction also saw some of the biggest changes – at about 9% over the same period.
- However exports fell severely by 11%.
The immediate question is: if export crops grew by 14%, and exports fell “severely by 11%”, what have we here? Apart from this strange part of the report, is the rest of the story good news? The answer is a big NO.
Dictator Kagame’s falsehoods & Half-truths
Kagame’s economic miracle in a broader regional context of the East African Community (EAC) is a non-starter. Take for example Gross Domestic Product (GDP) generally defined as ‘market value of all final goods and services’ of a nation in a given year. The World Bank 2010 Development Indicators provide the following data on EAC states based on the previous year (2009).
In the field of infrastructure, especially electricity that is the key to ‘powering’ development, CIA World Factbook 2011 ranks East African Countries as follows:
As indicated, Rwanda is “an economic miracle” to Burundi, but it is a pygmy in comparison to Kenya, Tanzania and Uganda. Kenya’s economy is almost 6 times larger, Tanzania’s four times, while Uganda’s is three times bigger than Rwanda’s economy. The same order applies to installed power, and as we all know, Rwanda has 67 Megawatts shared by 11 million people. (http://www.theodora.com/wfbcurrent/rwanda/rwanda_economy.html). There goes Kagame’s hype of Rwanda as the economic hub of East Africa.
What do the latest Rwandan statistics tell us – assuming they are not cooked?
The Rwanda News Agency screaming headline “Incomes rise as Rwanda’s economy expands to US$5.5 Billion” tell a different story from the one its master wishes to convey. In the data presented, the miracle quickly goes up in smoke.
- Rwanda’s GDP in 2009 was US$5.6 Billions as reported by the World Bank’s Development Indicators of 2010. In reality then, Kagame and his regime should not be celebrating $5.5Billions achieved in 2010.
- The new data confirms that Rwanda’s formal sector accounted for only 24% of GDP, while the informal sector (46%), non-monetary production (19%), and government (11%) accounted for a combined 79%.
- Rwanda’s exports fell by 11%.
In summary, (1) the Rwandan economy shrunk; (2) the informal sector remains almost twice the size of the formal economy; and (3) ); the combined informal sector, non-monetary production, and government account for almost 80% of prosperity-creation – as opposed to (4) the private sector that remains tiny.
Kagame’s economic miracle is hype and PR
Kagame’s economic miracle is what one might term “demonstrative” – or “show and tell.” There are now nice roads and skyscrapers in Kigali, and indeed construction has been booming in the Capital City. But most of this construction is on the consumption side – luxury homes and office blocks. Only Kagame knows how this office space will be occupied, because the productive and demand side remains largely a fairy tale.
Of course, once in a while, Dictator Kagame gets a flattery for his so-called economic miracle. For example, in his visit to Rwanda in August 2009, the World Bank President Robert Zoellick claimed that he was impressed by methane gas power plant that is generating 4.5 megawatts. Zoellick went on to make the following extraordinary statement: “Rwanda has the capacity to be a leader for the rest of Africa, showing that these policies can be implemented and showing how it will be done” (www.worldbank.org/WEBSITE/EXTERNAL).
Almost two years later in February 2011, Rwanda was still talking about power only in terms of future prospects, not the present. Bloomberg News (www.bloomberg.com/news/2011-02-03/rwanda-aims-to-boost-power-capacity-by-as-much-as-1-000mw.html) was quoting another boast by Rwanda to the effect that “Rwanda aims to boost electricity capacity by as much as 1,000 megawatts”. Yes but when? We have heard this hype before since the late 1990s, from former Ministers Nkusi, Butare, Karega, and now Nsengiyumva. If there is any consistent development lie in Rwanda in the last 17 years, it is about power generation. The powerful Rwandan dictator has no real power that improves lives – electricity.
The latest madness in Kigali
But Kagame is determined to beautify Kigali into Africa’s best Capital City – his “show and tell” version of development. And he will get his wishes by any means necessary. Soon we will have more hotels and conventions centres – with many surprises in between. Here is the latest crazy scheme.
The Minister of Local Government, Minister of Trade and Industry, Kigali Mayor, Inspector of Police, and CEO of Rwandan Development Board on 23 May 2011 concocted a decree that compels all “big” buildings to install a colossal security infrastructure before the end of August 2011. According to this decree, the following equipment must be installed by each Kigali-based “big” building:
- CCTV Cameras
- Walk through metal detectors
- Handheld metal detectors
- Luggage scanners
- Mirror for vehicle checking
- Fire-fighting equipment
- Water hydrant
- Emergency evacuation vehicles and trained personnel
- Para-lightening system
- Communication facilities including walkie-talkies and intercom phones
Most shockingly, the regime even identified a firm called Kingdom Engineering Group of Company Ltd to sell these equipments and associated services. I would not be surprised if this company is owned by RPF’s Crystal Investments aka Tristar controlled by Kagame himself. Here are a few questions for the Rwandan dictator:
- How do you define “big” buildings?
- Will your government ministries and departments that operate in “big” buildings implement this hair-brained scheme too?
- Where in the world did you ever hear of a city demanding that taxpayers build fire hydrants, provide fighting equipment, including vehicles and train fire-fighting personnel?
- Remember Mr. Dictator, your beautiful Kigali does not even have a sewage system – are you going to ask taxpayers to build one, and maintain it too?
- And Mr. Dictator Sir, why do citizens and firms pay municipal taxes in the first place?
This latest decree is not only a massive taxation running in millions of Rwandan Francs charged to individual owners of “big” buildings, it is daylight robbery. Those who rank countries on the basis of “Doing Business Indicators” should be alerted at once on how the Kagame regime robs business in broad daylight and yet touts Rwanda as a conducive investment destination.