Kagame Govt Vastly Exaggerates Foreign Investment By Reporting “Registered” As Opposed To “Actualized” Investments

By David Himbara

General Paul Kagame and the boss of Rwanda Development Board

General Paul Kagame and his team devised a trick to vastly exaggerate the amount of foreign investment Rwanda attracts. Instead of reporting actual investments that were made and are already operating in Rwanda, the Kagame government reports what is registered on paper. As Rwanda Development Board (RDB) explains, the process of applying for investment registration involves the following steps:

  1. “Application letter addressed to the CEO RDB requesting for investment registration;
  2. Submission of a business plan or a feasibility study;
  3. Certificate of legal personality of the business company.
  4. Proof of payment of registration fee of $500 or its equivalent in Rwandan francs to the RDB account in Bank of Kigali, account No. 0281441–77 for United States Dollars only and Account No. 0281460–96 for Rwandan francs only.”

What about the money to be invested?

The investor provides “detailed information on any financing and assets to be sources from outside of Rwanda, including the timeframe in which these finance and assets will be invested.” The investor also provides “a table indicating 5 year income projections for the investment project.”

What happens when the application for foreign investment is accepted?

As RDB explains, once the application for investment registration is approved,

“an acceptance letter will be issued within a period of two days…Upon receiving an investment registration certificate, the investor automatically qualifies for facilitation and other services as provided for in the investment.”

As can be seen above, “registered” investment is not actual investment but an expression of intent submitted on application form together with a fee of US$500. In other words, all the investor provides is “the timeframe in which the money or assets “will be invested” after the registration process. The investor is also asked to provide “a table indicating 5 year income projections for the investment project.”

Kagame’s government is a disgraceful serial manipulator

Measuring real foreign investment is simple – it is mainly classified two ways, namely, direct or indirect. Foreign direct investment refers to physical investments or purchases made by a company in a foreign country via opening plants or buying buildings and factories in a foreign country. Foreign indirect investments involve financial institutions and private investors buying equity, stocks or positions in foreign companies. In both cases, foreign investment is measured by the actual amount of capital invested in a foreign country in a particular year. And in both cases, Rwanda is a poor performer by regional standards because it lacks a strategy for attracting foreign investment. As the World Bank explains, Rwanda

“still trails its regional peers, despite the major improvements in the business environment. An appropriate investment promotion strategy and incentives framework would attract priority investors and stimulate FDI inflows.”

Kagame and Akamanzi, you are disgraceful. Stop counting non-existent investment and start reporting real investment. As they say in statistics world, if can’t count, you don’t count.