Standard and Poor’s Ratings Are Spoiling Kagame’s Party

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By David Himbara

President Paul Kagame can hardly wait for May 11–13, 2016. That is when he will showcase his self-proclaimed “development miracle” by hosting the 26th World Economic Forum (WEF). His regime is currently in overdrive, desperately trying to complete his hotels in which the guests will stay. Kagame’s Kigali Convention Center (KCC) and attached hotels might not be ready in time though. So some guests might stay in private residences. Meanwhile, Kagame has found praise-singers to begin proclaiming him a miracle worker who has achieved grand economic endeavors.

Here is a good example of the ongoing praise-singing for Kagame in preparation for the WEF meeting in May:

There is anticipation and excitement in the air in Rwanda, as the country gears up to host the 26th World Economic Forum (WEF) on Africa from May 11–13. This is the first time a WEF summit is being held in Rwanda, so work is on at a feverish pace to deliver a world-class event, to be attended by some of Africa’s richest men and women. For now, these include Aliko Dangote, Patrice Motsepe, Tony Elumelu, Precious Motsepe, and others like Graça Machel, Nkosazana Dlamini-Zuma, Ngozi Okonjo-Iweala and Cherie Blair. Also expected are at least 10 African heads of state.

With a GDP growth rate hovering around 7.6 per cent — one of the fastest growth rates in Sub-Saharan Africa — and led by a dynamic president, Paul Kagame, Rwanda has a proven track-record. This year’s theme for WEF will be ‘Connecting Africa’s Resources through Digital Transformation’, a grand nod to Rwanda’s own digital supremacy.

Wow — look at those spectacular praises for Kagame, the miracle worker:

  • GDP growth rate hovering around 7.6 per cent — one of the fastest growth rates in Sub-Saharan Africa;
  • Led by a dynamic president, Paul Kagame, Rwanda has a proven track-record;
  • Kagame’s hosting WEF is grand nod to Rwanda’s own “digital supremacy.”

Is this the same Rwanda we know? Look at the following comparisons of gross domestic product (GDP). Rwanda is not in the league of its partners — Kenya, Tanzania, and Uganda. Rwanda’s GDP is smaller than even Haiti’s, which is generally known as a “failed state that keeps failing.”

Rwanda’s GDP is even smaller than the failed states of Afghanistan and Haiti
Rwanda’s GDP is even smaller than the failed states of Afghanistan and Haiti

The worst news for Kagame is not in these statistics, however. It comes fromStandard and Poor’s credit ratings which are spoiling Kagame’s party. On March 11, 2016, Standard and Poor’s, the international credit rating agency, changed Rwanda’s rating from from ‘stable’ to ‘negative’. The IMF has also raised the alarm. Their concerns are based on Rwanda’s realities shown in my graph below. While Rwanda’s exports hover around USD 550 million, its imports run to over USD 2.3 billion. Aid to Rwanda that amounts to over USD 1 billion annually is nearly double the country’s exports. These are statistics of a banana republic.

Aid is almost double exports, while import bill is nearly three times exports.
Aid is almost double exports, while import bill is nearly three times exports.

Like has been said before, if you keep telling a big lie over and over again, some people will believe it. But sooner or later, the big lie is discovered. And so it will be in the case of Rwanda.

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