Kagame’s Strange Doing Business Rankings

By David Himbara

President Paul Kagame is addicted to global rankings. Rwandan newspapers know this. The newspapers work around the clock to find rankings that put Rwanda on the top. The World Bank’s Doing Business rankings are the most favorite — whenever this report comes out, the government and the newspapers go crazy. They attempt to outdo each other in showing how Rwanda is on top of the world.

In the World Bank’s Doing Business rankings, Kagame’s Rwanda is a star.

 

The World Bank’s doing business indicators measure the ease of doing business in 190 countries around the world. Put in another way, the rankings indicate countries in which it is easier to do business. The rankings also indicate countries where it is harder to do business. As indicated in the above World Bank table, Rwanda is said to be the easiest country in Africa to do business. Only Mauritius beats Rwanda. Globally, Rwanda ranks 41st — which appears to be very impressive.

But here is the irony. When countries are ranked according to how much foreign investment they attract, Rwanda does very poorly. In other words, despite having the second-best ease of doing business ranking, Rwanda is a very poor performer in attracting foreign investors.

 

The World Bank’s data on foreign investment puts Kagame’s Rwanda among the least successful countries. Here is a list of selected African countries including Rwanda indicating foreign investments.

  1. Nigeria – US$4.4 Billion.
  2. Ethiopia — US$4 Billion.
  3. South Africa — US$2.2 Billion.
  4. Tanzania — US$1.3 Billion.
  5. Uganda — US$522 Million.
  6. Kenya — US$393 Million.
  7. Mauritius — US$349 Million.
  8. Rwanda — US$254 Million.

In painting Kagame a great performer, Rwandan newspapers achieve the opposite.

Rwandan newspapers keep measuring the wrong things to make Kagame look great. The media should instead explain why Rwanda’s doing business rankings do not translate into actual investments. The Rwandan media should be asking this critical question: Why doesn’t Rwanda attract significant investment, despite having the best rankings on ease of doing business? The answer lies in the fact that the Kagame regime is unpredictable. Rwanda is a country of impunity, no country of laws. The US government 2017 analysis of Rwanda’s investment climate cites the following shortcomings among others:

1. “Investors often cite that tax incentives included in deals signed by the Rwanda Development Board (RDB) are not honored by the lead tax agency, Rwanda Revenue Authority (RRA)…

2. “Investors continue to complain about competition from state-owned and ruling party-aligned businesses…

3. “Rwanda suffers from a shortage of skilled workers, including accountants, lawyers, and technicians…”

Of course we know that things can get much worse in Kagame’s Rwanda. It is hardly any secret that Kagame can seize any private businesses without any legal consequences. Kagame is the law. That’s why superficial doing business rankings miss the point in the case of Rwanda.

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