The rise of
Rwanda from its nadir in 1994 when 800,000 people were killed in genocide
against the minority Tutsi has been phenomenal. Economic and social indicators
have out-performed other countries in Africa and around the world. How did
Rwanda
achieve this feat in just over two decades? Yes there are caveats to the story,
notably, issues regarding the democratic process and the sustainability of this
model. However, even with this caveat the Africa project can learn a lot from
this Rwanda success story. How can Africa learn from this project and what are
the implications for foreign partners?
I have used
the project concept because in Africa, Asia, the America and Australasia the
nation states were conceived and constructed by European powers and for much of
Africa and Asia this nation state concept is very much in transition. Whereas
Europe had negotiated and fought for centuries to develop its nation states,
the countries in rest of the world it conquered, created and ruled were based
on the interests of European powers, formalised at the Berlin conference in
1884. Fifty to 70 years ago, African and Asian countries were given
independence with little preparation for their newly minted status. Since then
they have faced major challenges and used a number of models in development
with varying degrees of success.
The Rwanda
case is a fascinating one that African countries could learn from. Rising from
the ashes of the 1994 genocide, the country has made impressive economic and
social gains. GDP (PPP) doubled from $575 in 1995 to almost $1,170 in 2012.
Between 2001 and 2015 it achieved an average of 8% GDP growth rate.The total
value of exports increased at a rate of 20% per annum in the decade up to 2014.
Nearly 620,000 tourists visited Rwanda in 2010 – just short of a six fold
increase on the 105,000 recorded in 2000.
Strong
economic growth resulting in substantial improvements in living standards has
been accompanied by significant gains in social indicators. The country spends
huge proportions of its national budget on health and education. In 2011,
almost 24% of total government expenditure went to health and 17% to education.
It has achieved near-universal primary school enrolment. Life expectancy has
risen from less than 48 years in 2000 to 65.7 years for women 62.4 years for
men in 2011. Deaths of under-fives have fallen from 230 per 1,000 live births
in 1998 to 55 in 2012. Infant mortality has also plummeted – from 120 deaths
per 1,000 live births in 1998 to fewer than 40 in 2012. Rwanda tops the global
league tables for the percentage of female parliamentarians. Fewer than 22% of
MPs worldwide are women; in Rwanda, almost 64% are.
Rwanda
achieved its success because its leaders had the vision, plan and ownership of
the process. The emphasis has been on developing its infrastructure, that is
the physical and soft infrastructure as defined in a paper published in this
blog in 2013 (Africa must develop its infrastructure). The leadership has
clearly outlined economic and social goals and measures that need to be taken
in detailed plans on how to achieve them. The ownership factor has been crucial
in the development process, because rather than allowing foreign partners to
just jet in and prepare reports, make decisions on strategies, plans and their
implementation, the Rwandan government has emphasised the importance of its
citizens setting the development agenda and being involved in all aspects of
the development project. It has clashed with foreign partners when it believes
that policies advocated are not in the interest of the country. A notable
current case is the importation of second hand clothes where the government is
taking a hardline against such imports because of the damage to its textile
sector, to the extent that it is willing to go against the U.S. which is
arguing that the Rwandan policy contravenes the Africa Growth and Opportunity
Act (AGOA) rules that gives goods from Africa preferential access to the U.S.
market.
Key factors
in the Rwanda story relate to corruption, efficiency and effectiveness of the
government. The country was ranked as the third least corrupt country (tied
with Mauritius) in Africa by Transparency International in 2017. The government
has made major strides to create an efficient regulatory framework, which makes
it much easier for private visitors, investors and aid organisations to operate
in the country. Finally, in a continent noted for failed or abandoned projects
it has been effective in its delivery. There are tangible physical evidence and
solid statistics of project outcomes. Rwanda was the third ranked African
country in terms of its competitiveness by the World Economic Forum at number
52, behind Mauritius and South Africa in 2016/17. In the table below compiled
by The World Bank on ease of doing business, the country was ranked overall at
58 globally in 2017, an improvement on the previous year. It was the second
highest ranked sub-Saharan African country in the index, after Mauritius.
Amazingly, it was ranked fourth in registering property and second in getting
credit in the world as a whole.
———————————-Ease
of Doing Business
– Rwanda’s ranking in the world
——————————————-2017
rank 2016
rank
Overall
58
59
Starting a
business
76
109
Dealing with
construction permits 158
110
Getting
electricity
117 119
Registering
property
4
12
Getting
credit
2
2
Protecting
minority investors
102
97
Paying
Taxes
59
48
Trading
across borders
87
131
Enforcing
contracts
95
117
Resolving
insolvency
73
69
Source:
World Bank
The
International Growth Centre in a review of the cost in terms of number of hours
and monetary value of border and documentary compliance of members in the East
African Community (EAC) found that Rwanda was the most competitive country in
the group. Worldwide, it was ranked 87th, higher than Kenya, 105th, Uganda,
136th and Tanzania 180th.
The efforts
of the Rwandan government have resulted in positive outcomes three areas. It
has attracted foreign investors, tourists and foreign aid. In 2005, Foreign
Direct Investment (FDI) was less than 5% of gross fixed capital formation; in
2015, these inflows amounted to 24%, 8-10 percentage points higher than other
countries in the EAC. FDI reached $320 million in 2015, equivalent to 4% of
GDP. This is well above the average for sub-Saharan Africa, comparable to
Uganda and Tanzania and well ahead of Kenya. One crucial aspect of Rwanda’s FDI
is that a high proportion (40%) comes from other African countries, an
indication that other African countries view the country as a good and safe
return on investment. The strong Rwanda brand has seen a very rapid expansion
in tourism as noted above. Finally foreign aid donors have continued to pour
aid at US113/head, much higher than the level of other countries in the region,
because of the efficiency and effectiveness of projects in the country.
The Rwanda
experience is far from perfect and has many issues. Firstly, it is a small country,
in terms of population and area. There are only two ethnic groups and
oneindigenous language compared to other African countries with multitudes of
ethnic groups and languages. While the economy has grown significantly, it is
still classified as a low income country with foreign aid forming an unusually
large proportion of its economy and budget. The ethnic divide may not be highly
visible but it is still a major underlying factor that caused the genocide and
could still is a destabilising factor in the future. The major driving force is
President Kagame, who is often viewed as the archetypical strongman. What
happens if the Hutu majority is again mobilised against the Tutsi minority
and/or when Kagame leaves office, dies or is toppled. There are allegations of
political and press suppression that the government has yet to fully account
for. The country has been accused of interfering in the Democratic Republic of
Congo militarily and economically. However, even with these issues, which have
yet to be fully validated, the country has achieved a lot since its nadir in
1994 and in many respects therefore the rest of Africa can learn from its
experience. It should be noted also that when Kagame and his team ended the
genocide they were benign in the treatment of the perpetrators, bringing to
justice only the ring leaders even though a much wider group took part in these
despicable actions.
The Africa
project has a lot to learn from Rwanda as do the other projects around the
world. After the passion of independence, the reality check of the day after
the party the Africa project stalled and in some instances went off the rails.
The Rwanda experience with the vision, plan and ownership of the Kagame regime
is the antidote that many countries need. While many other countries have far
more natural resources than this small country, they lag behind in so many
ways. Governments are often viewed as the piggy bank that must be raided, jobs
offered to friends and relatives without people manning those posts and/or providing
any service, just receiving salaries and income from bribery. Consequently,
citizens do not receive the services and investors are deterred from investing
inbusiness ventures.
As noted
above, there are issues with the Rwanda model, the most critical being
democracy. The ideal scenario of free elections, media and judiciary is
theoretically crucial in creating a framework for economic development.
Empirical evidence however suggests that economic and social developments are
not an increasing function of this democratic ideal. The greatest economic and
social case in modern times, China has not followed that path. Other cases
include Singapore and Malaysia, both projects created by Europe, which have
experienced phenomenal economic and social development without going through
this democratic ideal phase fully. Does it therefore matter to the poor peasant
in rural areas and slum dweller in towns and cities? In cases noted above,
governments have demonstrated vision, plans, ownership and investment in infrastructure,
critical factors that have spurred and nurtured investment by local and foreign
investment.
In Africa in
the 1960s and 70s Houphouet Boigny of Ivory Coast was the best example of such
leadership which led to the transformation of that country in terms of its
physical infrastructure although he was not so successful in building the
country’s soft infrastructure. In the last two decades Ethiopia is another
example of rapid economic and social transformation but with allegations of
political repression. Other African countries like Cape Verde, Mauritius and
Botswana have demonstrated good governance, low level of corruption and high
efficiency levels. Ghana is the gold standard in terms of parliamentary
democracy having changed governments several times in the last two decades.
However none of these other African countries have achieved the performance of
Rwanda in terms speed and rate of economic and social transformation. In the
case of Ghana, ironically, the democratic process, which entails compromises
and rewarding loyal voters, may have hampered its efforts to minimise
corruption and improve efficiency. I have therefore highlighted the Rwanda
experience as an example for other African countries for a reasons noted above.
African countries can and must learn from each other as this is the best way,
because it is not through a text book process or fleeting visits by consultants
but the practical approach, a country with similar background which has proven
it can be done. Using Rwanda as a case study is also a significantly cheaper
process. This does not meanthat outside assistance is not required.
Major
foreign partners need to use Rwanda as a model for other African countries. The
key players are likely to be Europe and China. Europe, which conceived the
Africa project and has the strongest link recently announced at the G20 meeting
a “Compact with Africa” initiative which aims to increase investment in Africa
with the aim of reducing corruption, improving the regulatory environment, and
enhancing skills. This German initiative should be welcomed. China which has
increased its commitment to the continent in terms of aid and trade needs to up
its game in terms of ownership and corruption issues and go beyond viewing the
continent as merely a source of raw materials. These are dark days for
USA/Africa partnership under the Trump administration. This was evident in the
recent G20 meeting in Germany when he left the room during discussions on the
German proposal on Africa. That combined with his American First ideology,
sharply reduced state department budget and other developments suggest a
significant retrenchment in American engagement with Africa other from a
military perspective – note the recent bombing in Somalia. The focus of these
project partners must be improvement of Africa’s physical and soft
infrastructure to ensure that aid is more effective and the continent is more
attractive for both domestic and foreign investors. This focus makes the Rwanda
model very relevant.
• Rogers is
principal consultant at Media and Event Management Oxford.
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