Where Does Kagame’s “Impressive” Economic Growth Go?

Kagame speaking to nearly an empty hall at IHS CERA Week in Houston, Texas

President Paul Kagame tells whoever will listen about his economic miracle, especially about Rwanda’s “impressive” economic growth rates in the past two decades. Even when there are hardly any listeners, Kagame will show up to sell his so-called economic successes to an empty venue. That is what happened when he traveled some 13,487 km from Kigali to Houston, USA, to share his story at IHS CERAWeek in February 2016. IHS CERAWeek is an annual global forum of energy industry leaders, experts, government officials and policymakers from technology, financial, and industrial communities. With his meager 160 Megawatts of energy in a country of 12 million — power that cannot run a large data center, let alone a steel plant — few at CERAWeek would be interested in what Kagame had to say. And so Kagame spoke to nearly an empty hall — but nonetheless boasted about his Rwandan economic miracle.

Kagame’s stories are also regularly repeated in the ruling party’s paper, The New Times, which recently described Rwanda’s economic growth in the following glowing terms:

With the economy growing at an annual average rate of 8 per cent for the period of 10 years ending 2012, a time when conspiracy experts believed Rwanda would be on a begging spree across western capitals, the economy has expanded by close to 6.5 per cent on average between 2013 and 2015. This together with the earlier growth rate averaging 8 per cent have been among the highest across the continent and globally.

These journalists either know the truth and therefore sell their souls to tell lies. Or they are not too bright and therefore incapable of basic research. First of all, it is not conspiracy experts who believe that Rwanda goes “begging spree across western capitals” for aid. It is the reality. Official Development Assistance (ODA) to Rwanda is enormous by any measure.

Source: OECD

It might come as a surprise for Kagame journalists to learn that Rwanda is in fact addicted to aid. In 2014, total aid to Rwanda was slightly over USD 1 billion, the top donors being the World Bank (International Development Association), the United States, Britain, European Union, African Development Bank (African Development Fund), the Netherlands, Belgium, Japan, and Sweden.

Source: World Bank, 2014 data

Measured by aid per capita, Rwanda is by far the largest aid recipient in the East African Community, according to the World Bank data. Aid per capita in Uganda is USD 41; Burundi is USD 46; Kenya, USD 59; Tanzania, USD 51; and Rwanda, USD 91.

Meanwhile aid to Rwanda is nearly double its exports. According to the National Bank of Rwanda’s 2014 data, the value of Rwandan exports was USD 599 million. Aid in the same year as just noted stood at over USD 1 billion.

Source: The National Bank of Rwanda, 2014 data for imports and exports.

What is most shocking about Rwanda is its imports of basic foods, including meat and fish, milk and milk products, fats and cooking oil, vegetables and fruits, and cereals and flours. In 2014, these basic food items were imported into Rwanda at a cost of USD145 million. How can this country ceaselessly boast of being an impressive economic performer?

Source: the National Bank of Rwanda data, 2014

So where does Rwanda’s impressive annual growth rates go? Evidently not in producing things consumed locally, or for export markets.

In other words, the purported economic miracle is fantasy.

There was recently some noise about promoting “made in Rwanda” products. My goodness, why not start with basics, such as producing enough milk, eggs, friends, fish, and meat — and retain USD 145 spent on importing these items.

Prime Minister promoting “made in Rwanda” products

It is wise to begin crawling before learning how to walk.

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.