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Rwanda 1994: Gen. Paul Kagame letter of 10. August 1994 (Confidentiel)

Opinion: Suddenly President Kagame doesn’t want Rwanda to be dependent on the West!

For Africa as we wait to see what unfolds and adjust, we should be learning the lesson that we should not be entirely dependent. We will wake up to the reality there are things we should be doing for ourselves. You have made it appear that your situations are perfect and you want others to emulate you. Then you are surprised by what unfolds. It is what you have been hitting us with that is coming back to bite you. I did not change the constitution. If you want to know the truth you will find it is the people who did, not me. My satisfaction lies in the truth that we have not been involved in harming our people. What we are doing is to develop our country. If we don’t take care of ourselves, no one else will. As long as Rwandans are happy, we will keep doing what needs to be done. We will be listening to what others say but we will not be distracted from what needs to be done.”

-President Paul Kagame speaks to Gerard Baker, editor in chief of the Wall Street Journal, at the closing session of Invest in Africa conference.

President Paul Kagame of Rwanda, the long lingering Executive of Rwanda has compelled his words against dependency of the West. Surely, he has had this in mind for while in his own haven, as the Rwandan government has been a donor friendly. Therefore, that he claims now to take a stand against them shows the sudden change of attitude. However, it is sudden donors and programs that have stopped coming Kagame’s way, therefore the Rwandan government have started to run a giant tab of external debt instead of donor aid grants. Like look at some quotes from companies that establish the economic output and the financial flow of nations, like Deloitte and KPMG!

Rising debt:

“According to BMI, total external debt levels in the country have been rising steadily in recent years, from 16.1% of GDP in 2010 to an estimated 30.5% of GDP in 2015. Debt levels for 2016 and total external debt are forecast to amount to 35.2% of GDP and will be composed mostly of government debt” (Deloitte, P: 4, 2016).

Failing Foreign Aid, therefore rising debt:

“The primary headwind to the Rwandan economy in the 2016-2025 period will be the impact on debt as a result of falling foreign aid. Despite prudent fiscal policies to date, increases in debt levels will follow from the fall in foreign aid, since Rwanda is now deemed fit to transition from grant-based financing to loan-based financing by the IMF” (Deloitte, P: 5,2016).  “The government has been compelled to adopt a more prudent fiscal policy stance in an attempt to reduce the country’s dependence on donor support and increase fiscal autonomy. Recent external headwinds have encouraged the government to ease demand for imports by reassessing its infrastructure investment programme. This will undoubtedly have a negative impact on economic growth. That being said, the benefits of lower donor dependence and improved macroeconomic stability should outweigh the costs related to lower growth over the short term. Turning to external balances, Rwanda’s wide merchandise trade deficit is expected to maintain a shortfall in the overall current account going forward” (KPMG, P: 4, 2016).

“Aid harmonization has been improved and progress continues to be registered in the implementation of the Paris and Busan commitments especially the use of national budget and procurement systems. The Bank was the 6th largest Official Development Assistance (ODA) provider to Rwanda in 2013/14, accounting for 9.4% of total ODA26. The World Bank and EU invest in agriculture and energy whereas the leading bilateral DPs focus, among other things, on human development and social protection (Annex 8a). Annex 8b summarizes the progress made in implementing selected indicators as captured by the Donor Performance Assessment Framework. Use of the sector budget support (SBS) instrument has increased the share of Bank support disbursed using country systems. Under the DPCG, the Bank actively participates in activities to enhance the implementation of EDPRS II such as the 2014/15 assessment of SWGs” (AfDB, P: 9, 2016).

So if you look at the financial policies of the republic of Rwanda, some of it is not really chosen as the donors funds that has been suspended or stopped might be for several of reasons. That might be that if they accept the funds they have to follow a spectre of policies and interferes with the power that Kagame wish to achieve. The RPF and Kagame has total control of Rwanda, the export and the import, also owns dozens of the businesses. So the Rwandan government had to switch their economy with more loans, instead of donor aid. The loans are coming in through external debt as the external donor funds and grants have dwindled.

Therefore, the excuse of suddenly wanting to be independent is more a need, than a wish. If it was a wish earlier, than the AGOA or USAID to the RPF would have stopped decades ago. That should be common knowledge of the relationship between Paul Kagame and Bill Clinton. It is not that it is positive that the Rwandan Government want’s less aid is a healthy stance. Still, the excuse isn’t eaten by me.

The reality is that the increased debt instead of donor grants will hurt the economy, as the levied interest rates and other cost will hurt the economy. It isn’t healthy to be dependent of the aid either, but the reasons now seem more to reactionary than real intent. I am sure Paul Kagame would love funds from Belgium and France to build hospitals and clinics in rural regions of Rwanda. So, suddenly the West isn’t good enough, especially when they are questioning his reasons for staying in power and not having any successors while his regime is keeping a close lid on the opposition. Therefore, the economy and independent from the world becomes more important because then he needs to less show of transparency and accountability. Peace.

Reference:

AfDB – ‘RWANDA BANK GROUP COUNTRY STRATEGY PAPER 2017 – 2021 (October, 2016).

Deloitte – ‘Rwanda Economic Outlook 2016 The Story Behind the Numbers’ (June 2016)

KPMG – ‘Economic Snapshot H2, 2016 – Rwanda’ (15.10.2016) link:

https://home.kpmg.com/content/dam/kpmg/za/pdf/2016/10/KPMG-Rwanda-2016-Snapshot.pdf

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