Country FilesEast & HornCountry Profile 2014: RWANDA

Sun,21Jan2018

Posted on Thursday, 06 February 2014 15:27

Country Profile 2014: RWANDA

Flag Rwanda The moral high ground starts to shrink

In April 2014, Rwanda commemorates the passage of 20 years since the start of the 1994 genocide that killed more than 700,000 people in just 100 days. In the face of routine displays of loyalty to the Rwanda Patriotic Front (RPF) and President Paul Kagame, only very few brave activists will be using the anniversary to press the case for opening up of the political space. The real opponents remain in exile.

 

 

TABLE OF CONTENTS:

TOP RWANDAN COMPANIES

TOP RWANDAN BANKS

 

theafricareport-rwanda-72dpiThe moral high ground starts to shrink

Fear of mayhem is easily exploited to the advantage of the RPF

A chronically poor country with less aid still manages to punch above its weight

In April 2014, Rwanda commemorates the passage of 20 years since the start of the 1994 genocide that killed more than 700,000 people in just 100 days. In the face of routine displays of loyalty to the Rwanda Patriotic Front (RPF) and President Paul Kagame, only very few brave activists will be using the anniversary to press the case for opening up of the political space. The real opponents remain in exile.

The fear of extremist elements creating further rounds of mayhem runs deep and is easily exploited, with the RPF still managing to occupy the high moral ground at every opportunity. The latest parliamentary election in September 2013 was claimed as a vote for order, discipline and economic growth, as well as yet another advance for women, who took no less than 51 of the 80 seats. Of the 53 seats that were directly elected, the RPF took an overwhelming 41, while the remaining 12 went to the RPF’s friendly coalition partners, the Social Democratic Party and the Liberal Party. The meticulous management of these events seems set to ensure the RPF’s dominance although they do not provide a guarantee against subterranean divisions within the ruling circle itself.

 

 

 AID DRIES UP

 

The question of whether Kagame will actually step down as planned at the end of his current term in 2017 has been only very tentatively broached so far but could yet result in a constitutional amendment that allows him to run again. In the meantime his office will be fully stretched dealing with the challenges brought on by the sharp reduction of donor aid flows in 2012 – following the widely accepted evidence of the government’s support for the M23 rebels in the Democratic Republic of Congo.

 As a direct consequence of the estimated 20% reduction in donor finance – equivalent to more than 40% of public expenditure and 12% of GDP – the government had to draw on its foreign reserves and increase domestic borrowing. In addition, it reprioritised spending while maintaining a prudent monetary policy. The government’s macroeconomic response may have been effective so far in stabilising the economy, but a World Bank country report in May 2013 warned that the drawdown in foreign reserves and increased domestic borrowing will drive up interest rates and force a depreciation in the currency.

 While the domestic economy has remained strong, with growth estimated at 7.5% in 2013, experts say the country has to achieve and sustain at least 11.5% annually if it is to successfully eradicate the extreme rural poverty that still affects an estimated 49% of the population. Experts caution that the aid reduction and the uncertainties around its disbursement will make it hard to achieve rapid economic growth.

 

TRADITIONAL EXPORTS

 The country has depended heavily on donor financing over the past decade and still has no other real alternative. Domestic revenue, currently estimated at 12.7% of GDP, is clearly insufficient to fund government expenditure. The country’s tax base remains small, with the tax burden being borne by few companies that operate in the formal sector and by the people they employ.

 Rwandan exports remain dominated by the few traditional agriculture export products of tea, coffee and pyrethrum as well as some minerals, which altogether represented 58.8% of total value of exports in the first half of 2013. These exports are always going to be vulnerable to weather conditions and fluctuations in international prices.

But ambitions still run high for the country’s ability to move into middle income territory after 2020 and so the authorities now want at least $15bn in financing. There were two major borrowings in 2013 amounting to $400m, one for the national airline RwandAir and the other for the $300m Kigali Convention Centre, planned to generate conference tourism as a major source of revenue.

The service sector should indeed receive a major boost from hosting the May 2014 annual meeting of the African Development Bank, bringing more than 3,000 delegates to stay at the newly built Kigali Marriott Hotel.

 

 TOP RWANDAN COMPANIES

 

No Rwandan companies featured in The Africa's Report's Top 500 Companies in Africa 2013.

 

 TOP RWANDAN BANKS

 

No Rwandan banks featured in The Africa's Report's Top 200 Banks in Africa 2012.

 



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