The IMF and the World Bank Should Say No To Cronyism in Rwanda — An Open Letter to Ms. Christine Lagarde and Dr. Jim Yong Kim

Ms. Christine Lagarde and Dr. Jim Yong Kim

August 5, 2016

Ms. Christine Lagarde,
Managing Director,
The International Monetary Fund,
700 19th St NW, Washington, DC 20431, United States

Dr. Jim Yong Kim,
President of the World Bank,
1818 H St NW, Washington, DC 20433, United States

Dear Ms. Lagarde and Dr. Kim,

RE: Cronyism will plunge Rwanda into chaos if left unchecked by the country’s financiers

I begin my letter by thanking you for supporting my home country, Rwanda. In 2016 alone, your two agencies will lend Rwanda nearly a half billion dollars — the World Bank’s loans and grants amount USD285 million while the IMF’s Standby credit totals USD204 million.

The purpose of this open letter, however, is about cronyism in Rwanda. Case in point is the Kigali Convention Centre (KCC), financed by the larger part of the USD400 million Eurobond the Kagame government raised in 2013. Shockingly, a company by the name of Prime Holdings Ltd is a major shareholder with 50% shares.

Now, Prime Holdings Ltd’s notoriety is documented in the IMF’s records, as I discovered when researching for my new book, Kagame’s Economic Mirage(2016). Back in 2006, the IMF concluded that Rwanda’s “adherence to conditionality was poor” because, among other things, “the publication of Prime Holdings’ audit was not met.” At the time, Rwanda was building two major hotels that would be the launchpad of its tourism business. Prime Holdings Ltd was in charge of this project.

In response to the IMF’s findings, the Kagame government admitted that Prime Holdings was corrupt and should not be in business. In a letter dated May 18, 2006, to the then IMF’s Managing Director, Mr. Rodrigo de Rato y Figaredo, Rwanda’s Finance Minister, James Musoni, and Governor of the National Bank of Rwanda, Francois Kanimba, described Prime Holdings Ltd as follows:

“With a view to enhancing transparency related to Prime Holdings’ two hotels, we have published a financial audit and business plan of Prime Holdings in December 2005 (missed end-September performance criterion). As the auditors concluded that “it was not possible to determine if proper books of account were kept by the hotels”, we have canceled the contract with the management company and are in negotiations with the Intercontinental group to take on the management of the hotels.”

So now, how does the discredited Prime Holdings Ltd which the Kagame government terminated a decade ago reemerge to own 50% of KCC? That is not all. Crystal Ventures Ltd (CVL) is also a shareholder in KCC. Owned by the ruling party, the Rwandan Patriotic Front (RPF), CVL is synonymous with cronyism in Rwanda. Without government contracts in building roads, chartering executive jets to President Paul Kagame, or constructing a stadium for a local municipality, CVL would collapse. CVL is the most critical deterrent to domestic and foreign investment in Rwanda — and explains why Rwanda’s top rankings in the World Bank’s Doing Business indicators hardly make a difference.

There is no question that we are witnessing in KCC entrenched cronyism via state capture by the ruling elite in Rwanda. Prime Holdings Ltd is a shadowy front. It does not have an address or website. Prime Holdings’ premises in Kimihurura were turned into military officers’ quarters by President Kagame in 2009. Rwandans thought we had seen the last of this mafia-like company, only to reemerge, in control of even much larger assets — KCC.

As Rwanda’s leading financiers, the IMF and the World Bank have an obligation to hold the Kagame government accountable to transparency. We urge your two agencies to leverage your lending and surveillance powers to intervene before Rwanda’s ruling elite bankrupts the nation.

At the very least, the government of Rwanda should explain how, when, and why it resuscitated Prime Holdings Ltd, after assuring the IMF that the corrupt company closed ten years ago.

Most Sincerely,

David Himbara

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Unknown to most, Kigali is a dirty city. It is smartly dressed but with dirty underwear.

How "Modern" and "Clean" is our Capital Kigali?

Good news! The National Institute of Statistics, Rwanda (NISR), has issued its Thematic Report on "Characteristics of Household and Housing," January 2014.

For statistics-crazy people like yours truly, its time to quench our thirst with "new" knowledge.

To put the new data to use, I briefly probe two aspects of Kigali Capital, namely, how "modern" and how "clean" it really is.

How "Modern" and "Clean" is our Capital Kigali?

HOW DOES ONE MEASURE THESE?

As is evident on the attached picture, Kigali is visually impressive. But the least effective way of assessing cities is surface appearance as in buildings on the main road.

There are more effective ways of measuring "modernity" and "cleanliness" of world capital cities.

I am inclined to look at two most fundamentals in life to get an insight into cleanliness of a major urban habitat: how most city residents 1) prepare their meals and 2) and the mode of toilet infrastructure via which they release themselves.

Can you thing of anything more fundamental than that? I sure can't. Luckily the NISR provides us with data to answer both questions.

HOW MEALS ARE PREPARED IN RWANDA & IN KIGALI

According to NISR, about 95% of Rwandan households (2.4 million) use either firewood or charcoal for cooking. More urban-based households (63%) than their rural counterparts use charcoal.

Of urban population only 5% of Rwandan households use electricity to cook. This use is primarily a Kigali phenomenon.

TOILET INFRASTRUCTURE IN RWANDA & IN KIGALI

According to NISR, only 1% Rwandan households use flush toilets - meaning that 99% use pit latrines.

That is a lot of latrines in Rwanda. Nearly 2.4 million latrines.

Of urban households including Kigali, 5% use flush toilets - meaning that 95% use pit latrines.

NISR, furthermore, informs us that in urban Rwanda "households often use shared toilet facilities due to lack of space or due to limited financial resources."

It comes as no surprise that there is no sewage system in Kigali City, a habitat of 1 million.

CONCLUSION?

Unknown to most, Kigali is a dirty city. It is smartly dressed but with dirty underwear.

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How Did Crystal Ventures and the Thieving Prime Holdings Become Kigali Convention Centre's Investors?

Kagame’s Economic Mirage By David Himbara

How Did Crystal Ventures and the Thieving Prime Holdings Become Kigali Convention Centre's Investors?

How could Kagame revive Prime Holdings after promising the IMF in 2006 that the thieving company was to be terminated? How long will this regime continue to pose as clean while thoroughly corrupt?

For more details on Kagame's Prime Holdings and how the IMF got involved by confronting the regime about it, read the book

KAGAME’S ECONOMIC MIRAGE
http://kagameseconomicmirage.com/

AMAZON
https://www.amazon.com/Kagames-Economic-Mirage-David-Himbara/dp/1519411219

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A Picture Is Worth A Thousand Words — Here Is Kagame's Kigali Convention Center and Drinking Water Scarcity In Rwanda

Between drinking water and Kagame's Convetion Center, What comes first? In Kagame's Regime things are opposite, !

For eight-year-old Jackson Ngabonziza of Rugarama Cell, Nyamirambo Sector in Nyarugenge District, a one-kilometre trek for water from a drainage system in Rwarutabura Village had become routine, after water taps in his neighbourhood dried up ten months ago. But on October 30, he tripped and drowned in a flooded drainage contrary to earlier reports that he was washed away from home. Timothy Kisambira and John Mbanda visited this treacherous spot and found children fetching water oblivious of the dangers.

Rwanda's FAKE Economic Recovery - Truth Is Scary, take a look at the pictures and remember this ''Let there be work, bread, water and salt for all.''

Now lets look at the Kagame's Kigali Convention Center, According to Kagame as the head of Rwanda he has decided to put  Rwanda into a US$300 million debt to build a convention centre. He claims the convention centre will make Rwanda richer by hosting thousands of conferences.

The first major event hosted by the centre was the July 2016 AU Summit. Do you bet the Kagame convention centre will make any CASH before 2016 ends and atleast provide drinking water to Rwandan Citizens?

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