Economic Development Under The Three Rwandan Dictators – The More Things Change, The More They Stay The Same (3)

At the end of the Kayibanda’s regime in 1973, Rwanda was (a) one-man dictatorship, (b) aid-dependent (c) one of the poorest. Rwanda was on the UN’s list of the 25 Least Developed Countries. Fast-forward to 2017. Rwanda remains (a) one-man dictatorship, (b) aid-dependent (c) one of the poorest. Rwanda among 18 on Least Developed Countries.

Here is the summary of the economic development under the three regimes…The World Bank records on Rwanda are impressive on these matters – which I quote extensively…

This is how the World Bank described Rwanda in 1973:

Rwanda is one of the poorest countries in Africa with about $60 per capita income, and is included in the UN list of the 25 Least Developed countries. The economy is predominantly agricultural…In view of the poverty and the slow growth of the economy,the Government will not be able, in the near future, to generate sufficient revenue to finance even its recurrent expenditures, for which it receives budgetary support from Belgium, especially for education, public health, agriculture and transportation. Pablic investment will therefore have to be financed almost entirely by foreign aid. The Govermnent can reasonably expect to receive an increasing volume of foreign assistance, particularly from Belgium and the European Development Fund (FED). Foreign assistance disbursements increased from $6million in 1968 to $10 million in 1971. The main constraint to investment is not likely to be the availability of project aid but the difficulties the Government may encounter, owing to shortages of approprintely trained manpower, in building up and staffing institutions geared to efficient preparation and implementation of investment projects.”

Throughout the 1980s, the regime of Habyarimana was in perpetual economic crisis. This is how the World Bank described the situation in 1988 – two years before the Rwandan civil war:

“Rwanda is a small land-locked country with a fairly homogeneous population of slightly over six million and a GNP per capita of about US$280 in 1988. The population is overwhelmingly rural (90 percent)…The economy became more volatile in the 1980s. Real GDP fluctuated widely during 1981–87…Overall.GDP growth over the last seven years has fallen behind population growth, resulting in a deterioration of the average living standard of the population. Prospects are bleak for the immediate future; a large budgetary deficit and continued pressures on the balanceof payments are anticipated…1.05. The economic downturn and the emerging financial problems show the continued vulnerability of the Rwandese economy to developments in the world coffee market…Rwanda’s economic problems also have been exacerbatedby policies followed by the Government over the past few years. The Rwandese authorities did not perceive the coffee boom of the late 1970s as a temporary phenomenon and embarked on a large public expenditure program, failing to adjust it when coffee prices reverted to a more normal level…As a result, large budgetary deficits developed and had to be financed by increased borrowing, particularly from domestic sources. Between 1981 and 1987, public domestic debt quadrupled, reaching Rwf 21.1billion (US$270million) or 13 percent of GDP at end of 1987.”

Here now is how the World Bank is describing the Rwandan economy under the Kagame dictatorship in 2017:

“Going forward, the private sector, which is still largely informal, will have to play a bigger role in ensuring economic growth. Poor infrastructure and lack of access to electricity are some of the major constraints to private investment. As Rwanda’s investment relies significantly on foreign aid, stable inflows of this foreign aid are critical to keep the current high investment rate at around 25% of GDP. In addition, reducing the country’s dependency on foreign aid (which represents 30% to 40% of the budget) through domestic resource mobilization is critical. While Rwanda has been effectively using aid for development, the country remains vulnerable to fluctuations in aid flows.”

What do we see here? Two things have been constant in Rwandan history:

  1. Power hunger
  2. Poverty

Just as Rwanda was listed among the least developed countries in 1973, and so it remains. According to the World Bank data, there were 17 countries poorer than Rwanda.