By David Himbara
Rwanda Development Board (RDB) reported that it registered US$1.6 billion worth of investments in 2017. According to RDB, this was an increase of US$515 million over the investments registered in 2016 – which stood at US$1.1 billion. For 2016, said RDB, the largest individual investment registered was Bugesera Airport Company Ltd. Its investment was said to be worth US$398.6 million. As shown below, this investment never materialized. The Kagame government should stop issuing bogus reports about “registered” investment and instead indicate actual and verifiable net capital and assets transferred to Rwanda.
What happened to the Bugesera Airport Company Ltd, and its 2016 investment of US$398.6 million?
The majority investor in the Bugesera Airport Company was Mota-Engil Engenharia e Construҫao Africa, S.A. (Mota-Engil). Mota-Engil was to design, build, finance, maintain and operate the airport through a 25-year concession contract, with an optional extension of 15 years. The expected to cost of the airport was US$818 million. The estimated cost of the initial phase was US$418 million which was due to be completed in 2018. RDB, however, “registered” US$398.6 million that was to be invested by the Bugesera Airport Company. We are in 2020, and no airport. And Mota-Engil is gone. In December 2019, Mota-Engil was replaced by Qatar Airways which apparently took over a 60 percent stake in the airport, now said to be valued at US$1.3 billion.
What is the main lesson here?
In normal countries, it is the actual verifiable net inflows of capital, assets, or equity made by non-resident investors that are reported as foreign investment in the receiving economy. Documantable assets and liabilities are transferred to the receiving country – not expressions of intent. When net inflows of foreign investment are calculated this way, this is the annual amount Rwanda has received per year from 2008 to 2018:
- 2018 – US$398 million;
- 2017 – US$356 million;
- 2016 – US$342 million;
- 2015 – US$379 million;
- 2014 – US$458 million;
- 2013 – US$257 million;
- 2012 – US$254 million;
- 2011 – US$119 million;
- 2010 – US$250 million;
- 2009 – US$118 million;
- 2008 – US$102 million.
Kagame’s Rwanda does report net foreign investments like this because the numbers are not as impressive as he fantasizes. RDB ends up reporting bogus “registered” as opposed to capital assets transferred to Rwanda by investors. The danger of this method is shown by the Bugesera Airport Company which RDB “registered” as the 2016 largest investment. This bogus reporting by RDB is simply embarrassing.
