RWANDA IN HISTORICAL PERSPECTIVE – KAYIBANDA’S ECONOMY

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I have recently discovered very rich World Bank records on Rwanda dating back to Gregoire Kayibanda’s presidency. I will share this material as time goes on.

In 1970 Rwanda was home to 3.5 million people, with population density of 200 per square km. Most of the population was in subsistence economy, with coffee exports providing an important source of cash income.

According to the World Bank, because the economic base was so small, the Government of Rwanda had “found it impossible to raise enough revenue to cover even modest expenditures on essential government services. It has had to cover its deficits by borrowing from the Central Bank… Almost all public investment has been financed by foreign aid, mainly from Belgium and the European Development Fund.”

Rwanda’s per capita income was $50 and had “very low savings capacity,” and “not creditworthy for loans from the Bank [but] eligible for IDA assistance.”

In April 27 to May 1, 1970, delegation from Rwanda came to negotiate a grant with the World Bank for road building, led by the Ambassador of Rwanda in Washington, Nkundabagenzi. Theother members were Rugigana, Secretary General of the Ministry of Finance, Katabarwa, Secretary General of the Ministry of Public Works and Mulindangabo, representing the Secretary of State for Planning.

The project they were negotiating was “first priority in the Government’s highway program,” for providing “a paved road to link Kigali, the capital of Rwanda, and the Uganda road system, replacing an existing earth track and reducing by 73 km the road distance to Kampala…The project road would join up with a gravel road from Gatuna to Kabale…”

The project cost $10.9 million equivalent – much of it grant.

Dr David Himbara

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