8 June 2014

Zimbabwe: Rwanda Leaps As Zim Stutters

Twenty years ago, Rwanda was a sure candidate for the failed states' club after the genocide that claimed a million lives of Tutsis and moderate Hutus inside a bloody 100 days.

The perpetrators of that massacre were the Hutus in what was to become the darkest chapter in the East African country's history.

Though the scars of the genocide are still fresh, the country has moved mountains and has been one of the fastest growing economies on the continent, anchored on peace, security and national healing.

Under the leadership of Paul Kagame, a hands-on President, Rwanda has managed to weed out corruption -- the cancer of most African countries.

"Traffic police officers are constantly changed to weed out corruption among traffic cops in most African countries," a local, Joel Mugabe said.

Good governance and investor-friendly policies have seen lenders stampeding to give Rwanda loans at a time Zimbabwe has been struggling to get loans due to the country's over US$6 billion external debt.

Rwanda's debut Eurobond offer of US$400 million issued last year was oversubscribed by 8,5 times. Its US$18,3 million local treasury bond issued in February with a three-year maturity recorded a subscription rate of over 140%.

The International Finance Corporation (IFC) five-year US$22 million "Umganda" bond, its first local currency bond issued on May 15, received bids worth more than twice that amount.

"Umganda" is Rwanda's day of community held every last Saturday of the month. During this day, citizens gather to do community work and it is estimated that the value of such work to the country's development since 2007 is US$60 million.

Finance and Economic Development minister Patrick Chinamasa, who was in Rwanda after the 1994 genocide, said the country's growth rate has been phenomenal.

"I came here [Rwanda] in the 90s and Kigali was a village. Kigali is now a well-planned city and you don't find slums," he said.

Chinamasa said Rwanda had achieved phenomenal growth anchored on discipline and an operating environment conducive to Foreign Direct Investment (FDI).

"The lessons I have learnt is that let's be clean and disciplined. Let's fashion our policy framework conducive for FDI [inflows] while not forgetting to uplift our people," Chinamasa said.

Rwanda is security-conscious with heavily armed police and army officers maintaining a presence on the streets. To Rwandans, this has become a daily occurrence and they won't bat an eyelid as long it doesn't take the country back to the 1994 madness.

Unlike Zimbabwe which has in the past come up with home-grown documents to grow the economy with little or no implementation, Rwanda's programmes are followed to the letter.

One such is the Agaciro Development Fund based on voluntary donations set up in which Rwandans contribute to the country's development. The programme was launched in 2012 and the Rwandan government says it is now worth US$41 million.

Rwanda's journey has also been driven by discipline in the public service and parastatals. Performance contracts are signed at all levels of government to promote accountability and transparency in the public service.

The Rwandan government did not sweep the 1994 genocide under the carpet. It set up courts to try perpetrators as a way of promoting national healing.

The Gacaca Courts have resolved 1,2 million cases at a cost of US$25 million. This, according to the Rwandan government, was an achievement considering that the International Criminal Tribunal for Rwanda tried 58 cases at a cost of over US$2 billion.

As part of the homegrown solutions, Rwanda came up with a national dialogue council which meets once a year. Rwandans come together to debate national issues, local government or national unity.

"This is key in ensuring Rwandans participate in policy making," it said.

Rwandan Finance minister Claver Gatete said the cooperation with AfDB has been central to the country's economic recovery.

"The bank [AfDB] has contributed to our structural transformation efforts, and supported important macroeconomic and business regulatory reforms," he said.

Chinamasa said like Rwanda, Zimbabwe enjoys political stability and has to leverage on that for economic development.

"The turbulence of the past is behind us. We need economic growth of at least 8% for 10 years to make up for the lost time and this is urgent," he said.

Critics say Rwanda has managed to use the "victims" card to lure both donors and lenders.

"So far it has worked. We don't know for how long," retorted a government critic.

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