Rwanda: An Economic Miracle or Just a Facade?

posted in: Africa, Economics, Rwanda | 0
Kigali, the Emerging Capital of Rwanda

Towering skyscrapers dot the horizon. A luxury bus accommodates a young passenger who pays for her journey with her smartphone. The streets bustle with people and cars long after sundown. Such is common life not in Shanghai, New York, or Dubai – but in Kigali, the capital city of Rwanda. Throughout the past three decades, the small South African nation has experienced what experts call an economic miracle. Immense advancements in technology, organization in government, and progressive policies pushed it to the pinnacle of growth. Yet all of this perfection comes at a silent cost. The city is devoid of poor people, deemed “undesirables”, because of government sanctioned removals and detention centers. Now, many are wondering if the growth is even real, or if it’s just a ploy for the authoritarian government to sustain its existence. 

A rendition of Kigali’s developments upon completion this decade

In 1994, Rwanda was on a larger downwards spiral than any other nation in the world. Ethnic conflict had long plagued the region, with the majority Hutu group against the minority Tutsi group. On April 6th, the death of the Rwandan President Juvenal Habyarimana, a Hutu, was painted as an ethnically motivated murder, albeit with no culprit to stand for it. Mere hours after the incident, violence and bloodshed erupted across the country for three months. At the end of it all, 800,000 people were killed, the vast majority being Tutsi or political opponents of the Hutu. This dark period in Rwanda’s history consequently also shattered the economy, debilitating the remainder of the populace that survived. The GDP rate declined significantly on net, peaking at -40% in 1994. Poverty was exacerbated as markets crashed, and foreign investment was nowhere to be found. It seemed as if the nation was at the brink of ceasing to exist. 

But from that point forward, a slow but steady recovery gripped Rwanda from the edge of total collapse. Supported by large aid packages from across the globe, the Tutsi-led government began a massive campaign to revitalize the economy and initiate social reforms. It privatized many state owned sectors of the economy and reinforced industries handling agricultural exports such as coffee and tea. Factories that had been abandoned during the chaos were rehabilitated, and the people slowly returned to their stations in society. During this period the country reported a GDP growth averaging 7 percent every year, one of the fastest in the world. The GDP per person, which was reported by the World Bank to be $205 before the genocide, increased to $765 by 2017. These economic upturns manifested in parallel improvements in quality of life and general living standards. According to the International Health Metrics and Evaluation institute, government spending on healthcare nearly increased sixfold from $21 in 1995 to $125 by 2014. In addition, The World Bank reports that completion of primary school education increased from 25 percent in boys and 22 percent in  girls in 2000 to almost 66 percent and 75 percent respectively in 2016. And in stark contrast to the horrific circumstances decades prior, its murder count per 100,000 people was calculated to be 3.2, one of the lowest in Africa. The country had turned around its fortunes, prevailing over near-impossible odds. 

Paul Kagame, the current President and de facto leader of the authoritarian regime

But there is another narrative underneath the miracle story, one that exposes the uplift of Rwanda for what it really may be – a facade. 

The almost immediate rebound in the economy from 1995 onwards was not without conflict, as the same time period violence continued to riddle the region. The genocide fortunately ended in 1994, but the power struggle that continued between the Tutsi controlled Rwandan Patriotic Force (RPF) and other Hutu militias killed 5 million more people across six countries by 2003. In addition, experts question whether Rwanda’s economy is improving as much as people would like to think. In 2017, researchers as part of the Review of African Political Economy journal conducted household surveys to suggest that the Rwandan economic growth was much smaller than projected by the government. They matched the growth in average household consumption from 10,000 households to the GDP per capita reported by the government over the course of two decades, as these two figures should be quite similar. The results showed that after 2005, the numbers started to sharply diverge; while the projected GDP per capita continued to increase, the average household consumption appeared to plateau and decrease. If the actual GDP per capita is stagnant instead of growing like the government claims, there are alarming implications. Historically, President Kagame has touted the growth as a means to bolster the legitimacy of his increasingly authoritarian regime. It has justified reprehensible actions, such as repressive policies, propaganda, and fear mongering. The government has been in total control of every aspect of their citizens’ lives, enacting countless stringent laws with harsh punishments awaiting any violators. Such is the flip side to Rwanda’s miracle, the price of political freedom to be paid for peace and economic stability.

The story of Rwanda to the present day at large has been characterized as one of overcoming immense economic odds and breaking both technological and social barriers. The average citizen may be in better circumstances today than in the past, but the tradeoffs in liberties and human rights must be addressed. One can only hope that the Rwandan regime does not become a shadow of the state’s terrible past, and that it wields its power for the people, not against them. A miracle or not, it’s what Rwanda needs the most.