Since 2012 especially after the devastating defeat by Rwanda’s backed M23, Rwanda’s economy has been losing momentum due to donors cutting major project donations and DR Congo, Rwanda’s priced basket of plunder putting its house in order. Since 2012, we have seen the Rwandan franks becoming weak while at the same time witnessing higher inflation thus squeezing the living standards of ordinary Rwandans. Despite fabricated statistics from Rwanda’s notorious office of statistics, the Country’s economy shows a clear picture of low receipts collection for the Inland Revenue, negative balance of trade (trade deficit), lack of foreign currency on the market, government’s perceived projects going on hold, next to zero employment recruitments, agricultural failures, job layoffs in both the government and the private sector……etc
Although the official growth figures published in the last quarter by the totalitarian regime showed GDP of around 6%, in reality the country is in a recession. Since 2012, the country has been going through a period of economic decline during which its trade in both industrial and agricultural activities where reduced dramatically.
A period of government bonds being sold on the market kicked in, and these bonds were sold at higher interest rates to different money sharks around the world, thus mortgaging the country.
The most notable shift over the last month was a further sharp fall in the value of the Rwanda francs and against the dollar, at the moment for buying $1 goes for 820 Rwandan francs and selling $1 goes for 842 Rwandan francs. Throughout the year, Rwanda’s currency has been experiencing devaluations due to downwards pressure placed on the currency by lack of foreign currency like the dollars. The currency will continue to lose its value and we shouldn’t expect the Rwandan francs yo recover as the underlying economic pressures are going nowhere.
All economic indicators such as high prices for commodities like food, no wage increases especially among civil servants, failures in mortgage payments -mortgage foreclosure…etc. These show tough days ahead for Rwandans and its over shrinking economy.
There are warning signs that Rwandans should be prepared for strident squeeze in their living standards, as the weak Rwandan Francs continue to drive inflation high and cautious businesses community reigning on their investments, and in most cases relocating to other parts of East Africa or the SADC countries. Capital flight is the norm of the day as investors, Paul Kagame/family and other political elites transfer different assets and cash out of the country to different economic jurisdictions.
The government’s policies of borrowing from different financial institutions as a means to come out of self-inflicted economic problems has refused to work, the drop in the Rwandan Francs has pinched most companies in the country, especially the RPF’s owned companies under the Crystal Venture consortium. The emerging economic picture is that of an economy which is facing tremendous pressure, as opposed to figures from a police state, a state which is great at doctoring its data for imaging purposes, while its citizens are living a life of destitution and hunger.
Meanwhile the public finances worsened, with the minister of finance realising the economic difficulties facing the country; but as usual coming short on both fiscal and monitory policies. The Country has passed $2bn mark in borrowing, especially when you consider that in 2005 all its foreign debts were forgiven and others repudiated. The country’s books are in negatives, the country is surviving on a credit card. Than borrowing to invest in austerity support, the government has borrowed at extravagant interest rates to build Kigali Convention Centre @ $600 million, to buy two Airbus 330-200@500 million….etc.
As economic growth continues to erode the Country due to inept and corrupt economic policies which don’t support investment – business and growth; but we should all expect in the next quarter the minister of finance to come back with his usual vuvuzela of GDP @ around 7%….etc. But in reality, the Country is facing economic challenges which are worse than Somalia, as in Somalia, it is a free economy while in Rwanda it is a controlled economy, with RPF controlling 80% of business transactions.
……..I rest my case!!!! Now state goons will start showing me photos of Kagame/family – Kabarebe buildings as a sign of economic progress.
Source: Gakwerere