All Eyes Are on Rwanda
Rwanda is quickly emerging as one of the strongest economies on the African continent. Its president, Paul Kagame, has successfully managed to steer its country into financial stability and success thanks to an iron will and pro-market policies. Furthermore, the president has sought to reunite the country along ethnic lines by emphasizing community-based actions and programs. The government was also quick to ensure the monopoly on the use of force back in 1994, contributing to the post-conflict transition (Rayarikar). While the ruling party was suspected of having fiddled with official poverty numbers back in 2019, the country has nonetheless demonstrated strong growth in other sectors and continues to pioneer industries on the continent, most recently launching a fully African-made cellphone. However, the leader, while economically beneficial to Rwanda, has been accused of infringing political rights and of becoming ideologically aligned with China’s model of government, which could spell dire consequences for the country’s democratic future.
In raw numbers, Rwanda has witnessed incredible economic growth. Up until the COVID-19 outbreak, the country had been benefiting from nearly 10% GDP growth for over 18 months. GDP per capita has also grown by 5% annually in the past decade, and the country has achieved near-universal primary school enrollment (World Bank). Rwanda has also seen improvements in equality measures, as its Gini coefficient, an index measuring income inequality, declined from 0.52 in 2006 to 0.43 in 2017. Population is seeing impressive growth coupled with a significant rise in life expectancy, having gone from 48 years to 68 years from 2000 to 2017 (World Bank). Finally, unemployment and inflation rates are on the decline, indicating strong government checks and sound monetary and fiscal policies. This expansion has been noted by international investors, who are increasingly attracted to this African nation. This incentive also manifests itself in the fact that Rwanda ranks 38th in the world for ease-of-doing business, translating in part to fewer barriers and regulations surrounding investments and business development. This ranking indicates that the government is looking to balance pro-growth policies with robust social programs. As such, foreign investment metrics rose to 305 million in 2018, with most of the capital flowing from Portugal, the UK, and India; prominent economies in their own right. Some of the most successful government initiatives have been the transition from a low-income agriculture-based economy to a knowledge-based, service-oriented economy with a mid-level income, as well as gender equality (World Economic Forum). Almost 64% of parliamentarians are women, compared to 22% worldwide, and women can now inherit land from their parents. These economic and social reforms have allowed Rwanda to begin healing from the tragedy that occurred in 1994, but memories of the atrocity remain strong and present.
The investor world has also touted the country’s private sector. This dynamic sphere of the economy has enabled the country to go from nearly entirely dependent on aid to 86% self-reliant, in that Rwanda only relies on aid for about 14% of its budget (IMF). Additionally, as of 2019, the private sector creates 38,000 jobs annually. This transition to self-reliance has been exemplified by the country's tech sector, specifically its telecommunications industry. The country recently unveiled two of the first entirely African-made cell phones, the Mara X and the Mara Z. The cell phones will employ Google Android’s operating system and cost 175,750 Rwandan francs ($190) and 120,250 francs ($130) respectively (Reuters). The manufacturing development is so significant to the continent because although cell phones have historically been assembled in Egypt and Ethiopia, the parts themselves were imported. Rwanda has now demonstrated that it can produce, assemble and distribute the technology to its market. The announcement was supported by the establishment of a $50 million manufacturing plant that is projected to make 10,000 phones per day. This project also coincides with the ratification of the African Continental Free Trade Agreement, which should help boost exports, especially in the technology sector, according to the Mara Group. Rwanda is therefore positioning itself as a key player in private sector development and technological goods, both regionally and across the continent.
The impressive economic record has been met with criticisms due to allegations of political repression. First and foremost, the country’s president, Paul Kagame, has been critiqued for his dubious election wins. For instance, back in 2017, he was re-elected with 99% of the vote, revealing almost guaranteed electoral fraud (Congressional Research Service). Moreover, his party, the Rwandan Patriotic Front has been the dominating political force since it seized power in 1994. The large margin by which the president was re-elected also indicates that his party undertakes extensive citizen watching and restricts opposition parties from truly competing for the presidency. The U.S. State Department has also noted concerns with aspects of elections conducted under his party’s rule, such as procedural irregularities, a lack of transparency, media restrictions, and the targeting of opposition parties. Kagama has formerly responded to external criticism by arguing that his party’s rule is necessary to ensure that the country does not revert to ethnic violence, which did in fact result in over 800,000 Tutsi deaths. His party has limited ethnic tensions by prohibiting public discussion of one’s ethnic background. Finally, the president has demonstrated his desire to stay in power by championing a new constitution that allows him to remain in his position until potentially 2034.
The future of the country may seem bright economically but muddled politically. Kagame continues to portray himself as a unifier and economic reformer while seemingly infringing basic human rights, including those of speech, press, and assembly. The question remains if the international community will continue allowing these violations to continue. The U.S. currently has a strong foundation with the country, although the Obama administration did manage to withhold aid over Rwandan support for fighters in neighboring Democratic Republic of the Congo. From a U.S. foreign policy perspective, the more worrisome development in Rwanda is China’s overtures to the country. President Kagame has lauded China’s presence in East Africa and has stated that the Asian power relates to Africa as an “equal” (Associated Press). This statement was made during a state visit by President Xi Jinping, who became the first Chinese leader to visit Rwanda. The symbolism of this visit cannot be overstated: Kagame likens himself to China’s leader, who also plans to remain in power for potentially decades thanks to political reforms. Kagame has called China’s role in Africa as a “revolutionary posture in world affairs” and has continuously courted Chinese infrastructure investment and military ties. The U.S. should be worried about these developing ties and should consider increasing its own concerted outreach to Rwanda to counter the Chinese overtures. These bilateral deals should emphasize human and labor rights, however, to distinguish themselves from past Chinese deals, which have not been as stringent on these factors. As China increases its economic footprint in Africa, the U.S. should make a full-hearted effort to demonstrate that the West is still a key player in international development and investment. As Rwanda and other countries in East Africa, such as Kenya and Ethiopia, continue developing at impressive rates, the United States should seek to partner with these countries to counter China’s ideological propagation, which may damage the continent’s democratic trajectory.
Works Cited:
Rayarikar, Chinmay. (2017, Spring). Rwanda: Development towards Authoritarianism? Trinity College Digital Repository. Accessed June 4 on https://digitalrepository.trincoll.edu/cgi/viewcontent.cgi?article=1656&context=theses
The World Bank. (2020, April 22). The World Bank in Rwanda. Accessed June 4 on https://www.worldbank.org/en/country/rwanda/overview
Rwanda Data. (2020). The World Bank. Accessed June 4 on https://data.worldbank.org/country/Rwanda
Rwanda Foreign Direct Investment. (2020). Trading Economics. Accessed June 4 on https://tradingeconomics.com/rwanda/foreign-direct-investment
5 Things to Know about Rwanda’s Economy. (2016, April 7). World Economic Forum. Accessed June 4 on https://www.weforum.org/agenda/2016/04/5-things-to-know-about-rwanda-s-economy/
Q&A Interview: Open for Business. (2019, June). F&D International Monetary Fund. Accessed June 4 on https://www.imf.org/external/pubs/ft/fandd/2019/06/private-sector-development-in-rwanda-trenches.htm
Uwiringiyimana, Clement. (2019, October 7). Rwanda launches first ‘Made in Africa’ smartphones. Reuters. Accessed June 5 on https://www.reuters.com/article/us-rwanda-telecoms/rwanda-launches-first-made-in-africa-smartphones-idUSKBN1WM1TN
Rwanda: In Brief. (2019, May 14). Congressional Research Service. Accessed June 5 on https://fas.org/sgp/crs/row/R44402.pdf
Associated Press. (2018, July 23). Rwandan leader says China relates to Africa ‘as an equal’. Associated Press. Accessed June 5 on https://apnews.com/904c9563409542ab93c37694aced0872/Rwandan-leader-says-China-relates-to-Africa-'as-an-equal'
