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Rwanda@20, a performance audit

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How Rwanda’s growth since 1994 measures against other economies and what explains the figures

Rwanda seems to be a country of extremes. Its turnaround since the genocide has been as astounding as the tragedy itself. The scale and speed of the Rwanda genocide was unprecedented. Rwanda’s rapid state and economic reconstruction has been equally unprecedented. One measure for success of a country is the growth of the Gross Domestic Product (GDP). Because this is based on statistical evidence rather than on opinion, it is a more preferred way to assess the performance of any government.

For example, statistical evidence shows that very few countries in the history of humankind have sustained economic growth rates above 7% on average for 25 years. These include South Korea, China, Japan, Malaysia, Taiwan, Singapore, Mauritius and Botswana. Many countries have had short sprints at growth but have not been able to sustain it over a long period.

One way to measure the success of post genocide Rwanda is to look at the growth of GDP. I went to the IMF website and downloaded GDP growth figures of 191 countries and sought to see how Rwanda ranks over the last 25 years (since 1988), over the last 19 years (since 1994) and over the last 13 years (since Paul Kagame became president in 2000). The figures for 2014 are not yet available as we are only half way through it.

Over the last 25 years, Rwanda’s GDP growth rate has averaged 4.5% thus making it the 75th fastest growing economy in the world. This sample is affected by the last six years of the Juvénal Habyarimana government and three months of the genocide that destroyed 60% of that nation’s GDP. But if the years are reduced to 19 (to account for the time since RPF took power), average growth has been 6.6% making it the 23rd fastest growing economy in the world. However, when this figure is reduced to 13 years to account for the time Kagame has been president, its average growth rate has been 7.7% and ranks as the 15th fastest growing economy in the world.

Since 2,000 world prices of oil have been at exceptionally high levels. This has brought revenue windfalls to oil producing and exporting countries thus boosting their growth even without hard work. It is no surprise therefore that out of the 15 fastest growing economies of the last 13 years, seven have been oil producers and exporters.

China is the 5th largest producer of oil in the world but the 29th largest oil exporter. However, most of its growth is driven by export of manufactured products. Therefore, although China has been the 7th fastest growing economy in the world over the last 13 years, I have not included it in the sample of oil exporters. Therefore, without oil exporters distorting the sample, Rwanda has been the 8th fastest growing economy in the world since Kagame assumed office in 2000.  I must admit that Rwanda is not an African exception. Indeed, our continent has been the fastest growing region of the world over the last 13 years. Out of the top 15 fastest growing economies in the world, Africa has six countries. If the time is reduced to the last ten years, Africa has six out of the ten fastest growing economies in the world. Therefore, we need to test Rwanda against Africa’s growth story.

For the last 13 years, Rwanda has been the sixth fastest growing economy on the continent. However, if you remove oil exporters from the sample (Angola, Equatorial Guinea, Nigeria, plus Sierra Leone which exports diamonds), Rwanda has been Africa’s second fastest growing economy behind Ethiopia.

Rwanda’s growth story is much bigger than this if one accounts for its many disadvantages. It lacks the natural advantages that can make a country grow faster economically.

First, neighbourhood: Countries like South Korea, Taiwan and Singapore on the Pacific Rim enjoyed close geographical proximity to Japan which had industrialised earlier and was enjoying a Post-World War Two reconstruction boom. Supplying Japan’s hungry industries with raw materials, labour and cheap manufactured goods - like industrial parts, became their speciality. Rwanda, on the other hand, lives in a bad and dangerous neighbourhood – bordering the Democratic Republic of Congo to the West and Burundi to the south – both of which countries have been mired in civil war for most of post genocide Rwanda’s history.

The second factor is proximity to the sea. Rwanda is 1500kms from the sea and this journey is traversed over treacherous and narrow roads in Kenya (until recently Mombasa-Nairobi-Busia road was bad) and Uganda (till now Katuna-Mbarara road is under reconstruction).

The third factor is Rwanda’s lack of rich minerals or rich soils; its hilly landscape makes agriculture an expensive enterprise as rains wash away the soils.

Four: where countries in East Asia enjoyed the advantage of a pre-existing high level of skills and education, the RPF inherited a country with two lawyers, 30 doctors and hardly any engineers at all – leave alone people with skills and experience to manage a modern bureaucratic state.

And five: Rwanda did not have a strategic advantage to attract a big power to bankroll its reconstruction. Therefore, over the last twenty years, Rwanda has succeeded in spite of numerous obstacles that would under normal circumstances have relegated it to slow, stagnant, or declining economic growth.  Rwanda has achieved this rapid growth because of the quality of its institutions and public policies and the hard work of its leaders and citizens. This has only been possible because of the political arrangements that have underpinned post genocide Rwanda.

Most Western “experts” on Rwanda claim that Kagame has presided over a police state, suffocating individual freedoms, and terrorising its citizens. It is difficult to make people work hard through coercion. So consent is fundamental to growth. Rwanda’s stability and success has come from decisions that have fostered social reconciliation and political inclusion in the governance.

Rwandans know all too well their ugly history and the political and social accommodations necessary for them to live in a stable political order. There are political restrictions in Rwanda that may seem authoritarian to a foreign visitor armed with an abstract notion of freedom but which its people, knowing all too well their own circumstances, see and accept as absolutely necessary for their stability and cohesion. That is possibly why, when asked how free they feel, Rwandans in a July 04 Gallup poll ranked higher in feeling free than citizens of the United States, the world’s oldest democracy.

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Comments (23)Add Comment
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written by Gen Adam Kifaliso, July 14, 2014
Andrew if you take away those countries that export only bananas and sponge mattresses to DR Congo ..what position does Rwanda attain ?
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written by OPIO, July 15, 2014
kale bambi omwana oyo m9 ali so naive and uninformed. let me educate him with a real explanation of Rwanda 's so called miraculous economic growth: 1- Clandestine dealing in DR Congo's abandant minerals. 2- Playing on the west's and UN's guilt over failures during the genocide and thereby extracting maximum donor aid and funding( possibly the highest aid dollar per person in all africa). 3- Official figures in rwanda show that Uganda is the NO1 source of remittances in millions of dollars by Rrwandans working abroad. YES, u heard that right, our poor impoverished, broken UG is Rwanda's no1 source of money and not uk, usa, belgium, france.
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written by OPIO, July 15, 2014
A large unknown no of Rwandans r employed in uganda's govt and civil service who use Ugandan names and nationality except that the average Ugandan from north of the equator cannot distingush them from our tribes of western uganda. You would be suprised if u were 2 dig deep 2 investigate this issue. Some pple even say that a young person fresh out of kigali university will get a greater chance and connections to secure a job in uganda's civil service or govt than a ugandan counterpart from gulu or mbale or nkozi uni. Rwandan students from UG universities fare even better. Secrete underground structures established by RPF in 70's and 80's 2 plan finance the war effort were not all necessarily dismantled after they returned home and could still be in place today.
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written by OPIO, July 15, 2014
BY the way andrew iam not a tribalist and iam well aware of those rwandans who settled in uganda since 1940's especially in buganda .Those ones intergrated, intermarried and there children and grandchildren became baganda and r different from the todays double-agents who have allegiance only to rwanda.
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written by Eshban Kwesiga, July 15, 2014
While GDP is an internationally accepted measure for development it misses one thing. The most authentic assessment of any country’s development is how many people it lifts out of poverty year after year. In most cases GDP will rise almost naturally, but reducing poverty is where the real hard work is. It doesn't make sense for a country’s GDP to keep rising yet more of its people are sinking deeper into poverty. Ever since President Kagame assumed the presidency in 2000, the number of Rwandans leaving in poverty has plummeted each year. Any African that has been to Kigali will confront a wave of mixed feelings; Part Admiration - Part Envy towards Rwanda
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written by Mutungisa Wence, July 15, 2014
I would want to be as objective as possible when responding to Mwenda's articles but I get mixed feelings after reading colleagues comments. However, let me go straight to the issues in the article; Rwanda's growth if the figures are true is attributed to non tolerance to corruption policy of the Rwandan government and nothing else. Uganda would be better if it was not run by mafias. Our president himself exclaimed when he reached in Rwanda and wondered whether Rwanda never had the thieves like the ones he has in Uganda.
However, Mwenda should also read whether high income per capita implies better standards of living. He should share with us the findings.
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written by Diane Kenneth, July 15, 2014
What I miss in this article is how Rwanda makes its money. Was it deliberately omitted because all that is flashed on our faces as economic growth is due to donations from rich countries?
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written by chiko , July 15, 2014
Good analysis Mr Mwenda.. I am not surprised by those who do not ignore what Rwanda has achieved
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written by Winnie, July 15, 2014
1. The performance of Rwanda is just ok even KCCA officals and other Govt organizations travel to Kigali to see what the magic is to their sucess
2. The Bemba and Bakonjo should give us a break with their confusion its even expensive to fight short people who hide in the mountains coz you waste alot of bullets on them.
3.Germany took the world cup coz thier players were not well known like Messi,Van Persie,Rooney so marking such players in a game is so diffiult. they also won coz they have the best national anthem(its a church hymn)uganda also needs to change their anthem and get a hymn song.
4. Opio knows why other tribes feel ashamed e.g if a Nambi,Opio or Kemigisha were to apply for a visa to Europe or Asia who would be doubted 1st?of cousre Nambi would be doubted you know why.
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written by Omeros, July 15, 2014
It is not difficult to demonstrate that Rwanda is the thriftiest and fastest growing country on the continent if you adjust away vast portions of the revenues of the nations against which you compare Rwanda's performance or acknowledge the very low base from which Rwanda's growth has been achieved.
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written by Omeros, July 15, 2014
On the matter of that Gallup poll result that you cite, if you acknowledge that Rwanda's government imposes 'political restrictions' (lovely euphemism, by the way) on its citizens, would it not be sensible to exercise greater circumspection than you have around the positive responses to pollsters of citizens who are being scrupulous to observe those 'restrictions'?
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written by Omeros, July 15, 2014
As to US perceptions of freedom, when asked the same question by Gallup ('are you satisfied or dissatisfied with your freedom to choose what to do with your life?') in 2006 - the very height of the economic boom - 93% of Americans responded that they were satisfied. In the wake of the worst economic crisis since the Great Depression and in the midst of a jobless recovery, it should come as no surprise that in 2013 Americans reported lower levels of satisfaction with their freedom (only 79% of Americans declared themselves satisfied). A dearth of economic opportunity will have the effect of eroding notions of individual freedom.
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written by Omeros, July 15, 2014
Do you think Rwandans would feel 'free' if their country's economy entered into a two year recession in which millions lost their jobs then stagnated for a further four? And why do you think that everyone other than Rwandans have an 'abstract' conception of freedom? What do you even mean by 'abstract'? Is what you really mean to say that the curtailment of political liberty is a price worth paying for the sake of economic growth? If so, then say just that.
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written by Maceni, July 15, 2014
To an extent Andrew decides to be willfully ignorant about context, which makes this article more like an AD than anything else. He knows that Rwanda has a ‘Bulungi Bwansi’ type of public culture. So Consent to repressive measures only has to be clothed as 'Umuganda' or in that spirit by the government to gain support from population. So in Rwanda repression of individual rights and popular consent to that repression can co-exist. Consent does not necessarily infer that individual rights are not violated. The structure and customary obedience required by ‘Umuganda’ provides the explanatory power to what seems like a paradox – Andrew knows this but has ignored it because it spoils the AD.
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written by Denis Musinguzi, July 15, 2014
A speculative piece based on abstract figures! Apart from being the dominant capitalist tool, GDP is an old-school, out-of-date measure of real development. Being the only measure informing the analysis makes the piece sharrow in depth.
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written by Ocheto, July 15, 2014
This is really a simplified and rather glossy portrayal of what has happened or happening in Rwanda. The GDP does not capture the true economic realities ordinary people live. Even if you go by these massaged figures the pertinent questions still remain unanswered: what was/is this growth based on, and is it sustanable? Isn't aid, the very thing Mwenda routinely disparages? Or the loot from Congo, clearly unsustainable? Or remittances from abroad, Uganda beeing one of them, unreliable? And the most important: who have been the beneficiaries? Moreover Rwanda's starting, rock bottom, lowest baseline, point easily gives a false impression of an impressive growth trajectory.
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written by Maceni, July 16, 2014
If anything the official growth figures are more likely to be lower than the reality- Rwanda’s GDP growth rate is very likely to be higher and GDP larger. There are growth dividends Rwanda has reaped by curbing corruption which enables them effectively and efficiently utilize Aid flows, local capital etc especially on infrastructure, health and education – there is no doubt that this has had an exponential growth effect across all sectors( many not included in the official numbers- this includes enormous amount of labor from ‘Umuganda’). Even from a low base Rwanda’s economic transformation is quite impressive.
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written by Maceni, July 16, 2014
Rwanda Economic growth is however negated by the enormous political risk. Kagame’s form of authoritarianism does not guarantee stability in the same fashion as Singapore or Korea – the countries he likes to emulate. The crass authoritarianism, the collective guilt indoctrination programs disguised as reconciliation, political assassinations, imprisonment of journalists and political opponents are hardly markers of socio-political stability.
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written by Musinguzi, July 17, 2014
There is nothing impossible to achieve if you set a target and ensure that you neither brink nor wink at anybody as far as achieving that target is concerned. This largely means that one has to follow and play by the set rules of the land. In a country where rules are not more than simple letters on a paper, nothing can work for sure. This culture of lawlessness and indifference to procedures is the way M7 has chosen to play his politics and is responsible for all the mess and lucklustre performance of anything Ugandan. Whether you talk about the suspension of air Uganda due to failure to follow safety procedures or a boda-boda failing to follow traffic rules, it all boils down to that cancerous culture where people are not held to account.
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written by Musinguzi, July 17, 2014
In that scenario, Uganda makes Rwanda look an astronomical performer when it shouldn't be. The results in Kigali are achievable by any sane people, people who have chosen results above tribe and self-aggrandisement. Although I highly credit M7 for his handling of security in Uganda, I squarely blame him when it comes to incompetence and its tolerance in Uganda. Although M7 has incalcated this culture over his theity-year- long rule, to collect these distortions, we don't need thrity years. We need results-driven people (who will adopt M7 security strategy and mildly retain his political inclusiveness) in statehouse for one-two terms.
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written by Musinguzi, July 17, 2014
Andrew, tell M7 to give us a chance, he has done his bit. We can take it up from there and bring about a different post-M7 narrative of Uganda@5-10, not @20. This country is ready, we need somebody angry enough about disorganisation and disorder.
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written by Musinguzi, July 17, 2014
I meant to say 'correct' and not 'collect' . But I am sure you understand why I confuse the two...hahaha!
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written by Diane Kenneth, July 18, 2014
I'm beginning to find solace in Flavia Nasaka's educative articles in the independent instead. Perhaps you might too. Last week she wrote a nice piece about the potential dangers of skin bleaching. She's followed that with another equally good piece about kitchen gardening. I feel like picking a hoe straight away.

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