The World Bank’s Dual Messages To Kagame – “We Love Your Drones, But Your Energy Indicators Are Disastrous”

The World Bank President Jim Yong Kim launching Kagame’s blood delivery drone 21 March 2017

On a visit to Rwanda on March 21, 2017, the World Bank President Jim Yong Kim was impressed by President Paul Kagame’s drones that purportedly deliver blood across Rwanda. I wonder if Jim Yong Kim discussed with Kagame how much blood the drones have delivered so far. Or how the blood is handled on arrival in a country of nearly 12 million but with less than 700 medical doctors. Or if there is electricity and refrigeration facilities in rural Rwanda to preserve the blood.

Meanwhile, the World Bank has come up with Regulatory Indicators For Sustainable Energy (RISE). RISE is based on a vast of primary policy and regulatory documents and is published biannually – the next one being due in 2018. The inaugural 2016 RISE Report covers 111 countries across the developed and developing world.

RISE has three pillars – but I limit my comments here to Pillar 1, which assesses policies relating to energy access. In this pillar on energy access, RISE scrutinizes the following national policies and regulations:

1. “Existence and monitoring of officially approved electrification plan.
2. Scope of officially approved electrification plan.
3. Framework for grid electrification.
4. Framework for minigrids
5. Framework for stand-alone systems.
6. Consumer affordability of electricity.
7. Utility transparency and monitoring.
8. Utility creditworthiness.”

So how does the World Bank score Rwanda on Pillar 1? Rwanda’s score out of 100 points is the lowest in East Africa:

1. Kenya – 82
2. Uganda – 78
3. Tanzania – 75
4. Burundi – 45
5. Rwanda – 41

Dear President Jim Yong Kim, please tell your pupil President Paul Kagame to shape up. Remind him that energy is the cornerstone of every country’s development – not gimmicks like drones.

Continue Reading..

How the World Economic Forum Became A Partner In Kagame’s Delusions of Grandeur

Open Letter to Mr. Klaus Schwab, Executive Chairman, the World Economic Forum (WEF)

August 30, 2016

Dear Sir, in your annual competitiveness reports, you rank Rwanda very highly. In the Global Competitiveness Index 2014–2015, for example, you ranked Rwanda 62nd out of 147 economies. According to you, Rwanda is one of Africa’s most competitive economies and the top performer in East Africa — well ahead of Kenya ranked 90th, Tanzania and Uganda, ranked 121st and 122nd, respectively.

Mr. Schwab, these rankings are questionable, not least because Rwanda is heavily dependent on its neighbors from which it imports most of its basic needs as well as foreign investment. For example, four out of six companies listed on the Rwanda Stock Exchange are Kenyan. Further, Rwanda’s economy is by far the smallest compared to its neighbors in terms of gross domestic product (GDP) and per capita income as indicated by the 2015 World Bank data:

• Kenya’s GDP was $63,398 with a GDP per capita, PPP (current international $) of $3,082.5.
• Tanzania’s GDP was $44,895 with a GDP per capita, PPP (current international $) of $2,667.3
• Uganda’s GDP was $26,369 with a GDP per capita, PPP (current international $) of $1,825.3.
• Rwanda’s GDP was $8,095 with a GDP per capita, PPP (current international $) of $1,758.7.

Even when looking at the factors WEF supposedly measures to determine its competitive rankings, namely, institutions, infrastructure, and education and health; there is no way that Rwanda outperforms its larger neighbors, least of all, in the state of economic infrastructure as I comprehensively demonstrate in my new book, Kagame’s Economic Mirage.

Dear Mr. Schwab, I now know where your problem is — it is in the method you use to draft your competitiveness report, or more precisely, what you term “partner institutes” that provide you the data. This is how you explain the importance of your partner institutes:

The World Economic Forum’s Global Competitiveness and Benchmarking Network is pleased to acknowledge and thank the following organizations as its valued Partner Institutes, without which the realization of The Global Competitiveness Report 2014–2015 would not have been feasible:

In the case of Kenya, your partner institute is Kenya Institute for Development Studies, the University of Nairobi. In Uganda, your partner is the Uganda Kabano Research and Development Center. In neighboring Burundi, your partner institute is the Burundi University Research Centre for Economic and Social Development (CURDES), the National University of Burundi.

And which institute do you partner with in Rwanda? In the 2014–2015 Competitiveness Report, you cite the Rwanda government itself through Rwanda Development Board (RDB), and its then CEO Valentine Rugwabiza. Your 2013–2014 Report says that your partner institute was RDB headed by the Acting CEO Claire Akamanzi. Your latest report — 2015–2016, cites RDB and its CEO Francis Gatare. That you also cite Private Sector Federation does not help either — that, too, is government-controlled. In any event, Rwanda’s private sector is dominated by the ruling party’s Crystal Ventures Ltd, and therefore, unlikely to provide an independent view on Rwanda’s realities.

We can make two possible conclusions on why WEF chose a different research method for Rwanda that is sharply different from the rest of East Africa. Either WEF is an innocent victim tricked into allowing an intellectual conflict of interest to evolve, whereby a government ranks itself — as opposed to engaging a neutral and independent research institution. Or WEF is a willing partner in President Paul Kagame’s delusions of grandeur of having built an African economic lion.

Either way, Mr. Schwab, you became Kagame’s loudspeaker. Please find a independent researcher to supply you credible economic data on Rwanda, if that is possible under a totalitarian state that controls anything that moves.

Yours Sincerely,

David Himbara

Continue Reading..

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

Continue Reading..