Can Three Colonels And A Lady Save Kagame’s RwandAir?

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By David Himabara

President Paul Kagame has just changed the management of RwandAir. Colonel Chance Ndagano is the new CEO. Prior to this appointment, Colonel Ndagano was a judge at Rwanda’s military tribunal. The new deputy CEO in charge of operations is another soldier – Lt Col Sylvere Mugiraneza. The new deputy CEO in charge of operations is Yvonne Makolo, formerly in mobile phone business. The two colonels and a lady join a third colonel – Silas Udahemuka, who is the chief of Rwanda Civil Aviation Authority. Previously, Udahemuka was a soldier in the republican guard.

What will this change do with regards to Kagame’s ambition of turning Rwanda into a tourism hub? The Kagame Dream has three pillars, one of them being RwandAir that is to create intra-African and intra-continental transport business. The second pillar is the Kigali Convention Center (KCC) for hosting mega business conferences. The third pillar is the Bugesera airport to handle more and larger aircraft for business tourism and cargo trade.

The two pillars – RwandAir and KCC – appear functional. Rwandair has purchased 2 large Airbuses, and is negotiating longer routes. The airline is now flying to India and is said to soon begin flying to London, UK. The KCC is already hosting some domestic and international conferences.

On a closer look, however, all is not well. From the International Monetary Fund (IMF), we learn that in the case of KCC, “in addition to the partial use of the proceeds of the 2013 Eurobond, new debt as of 2016 will be US$160 million (2 percent of GDP).” In the case of RwandAir, we learn that its “new debt is $244 million (3 percent of GDP) at end-2016.” The bad news is that RwandAir is having difficult maintaining monthly loan payments. In a letter dated December 16, 2016, the Kagame government informed the IMF of “temporary delay of external payments by Rwandair.” The government promised the IMF to sort this out:

“The management of Rwandair has been warned about the implications of not making payments in a timely manner. To ensure that future payments are not delayed, the Debt Management Unit in the Ministry of Finance and Economic Planning has put in place a ‘reminder mechanism’ to ensure timely payments of debt by SOEs.”

This is a strange promise. Are we to believe that RwandAir failed to make loan payments because it “forgot”? A whole new unit has been created to remind governments of their debt obligations? My goodness – what will they invent next?

The big question though is: will the team of three colonels and a lady save RwandAir and Kagame’s dream of turning Rwanda into a regional tourism hub? The jury is still deliberating. Stay tuned.

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