In one of branches of economics entitled “Microeconomics” two concepts Substitution and income effects are well developed as first of all the effect due only to the relative price change, controlling for the change in real income. Not only the case substitution effect, the income effect is well explained as a result due to the change in real income. For example, when the price goes up the consumer is not able to buy as many units of quantities that she/he could purchase before. This means that in real terms she/he has become worse off.
Now what is the case of Rwanda where the economy is under principles of Kagamenomics?
Recently, Kagame’s regime bought expensively different military equipment to sustain ironically the national security but really for him and his inner circle. If we go far in microeconomics concepts, that purchase of PL-50 from china would demonstrate or indicate that Rwanda is safe financially or simply, rwanda has increases in terms of income. Which is not true.
Kagamenomics is against real science developed by well known philosophers. His population have no developed hospitals, no adequate and appropriate schools, agriculture of subsistence and that why food insecurity is hitting rural areas of Rwanda not forgetting a non access to drinking water in some city of Kigali and rural areas.
Now the question is, kagame adopted that choice because of what?
1) Weapons are more cheaper than channeling pipes of drinking water in Kabeza or Nyamirambo sector?
2) Kagame substituted weapons to agricultural inputs because he found that his economy is not yet depending on foreign aid at extent of a 40%?
3) kagame substituted weapons to roads and other modern infrastructures because he built many and he want to protects the from which enemy?
What kind of substitution and income effects in Kagamenomics? Bosco Mutarambirwa and David Himbara, as experts in economics, how can we understand this new african kagamenomics principles?
Peter Urayeneza
