Rwanda: from doomsday to boom time

Published Feb 22, 2004

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By Francois Misser

Two months after the genocide, the smell of death was still obliterating the scent of the eucalyptus trees on the Kibuye hills, above the Lake Kivu fjords. Between the trees, unburied corpses were still lying in huts.

In the capital, Kigali, at night, only the Mille Collines Hotel could offer regular power supply to its customers. Most of the town was dark.

Government and company offices were empty. All was gone, including accounting books.

The new army that had ousted the Hutu-dominated government after the genocide was everywhere, searching for secret arms caches and hidden soldiers of the routed Rwandan Armed Forces.

Those were times of doomsday scenarios.

Ten years later, one hardly recognises Kigali: the soldiers are back in the barracks; business centres and cybercafes have mushroomed; the population of the capital is growing fast; and traffic jams are common.

Since 1994, the GDP has grown an average of 7 percent a year. Last year was an exception: the rate was only 3,5 percent, because of irregular rain.

Yet the growth is uneven. In 2003, it was boosted mainly by the construction and services booms - 16 percent and 6,6 percent respectively.

But manufacture shrank by 5,3 percent and cash-crop export earnings by 30 percent, while food production stagnated at 1 percent, which is 2 percent less than the population growth rate.

Kigali's expansion also contrasts with stagnation and even recession in the countryside.

This year again, agriculture, which contributes nearly half of Rwanda's GDP, will not able to feed all 8,5 million citizens (a million more than in March 1994, because of the return of most refugees).

Last month, 124 000 people were still depending on food aid in the Bugesera, Kibungo and Umutara provinces, which suffer from chronic drought.

Agronomist Leonard Nizeyimana is concerned because the rain came two months early, in January, and might upset farmers' plans.

On top of that, the banana crop was attacked by viruses.

At current rates, food production will continue to decline, while the population is expected to double by 2015, said Donald Kaberuka, the minister of the economy.

And Rwanda must also deal with a chronic trade deficit; as before the genocide, the ratio of exports to imports is only 25 percent.

But Kaberuka is not a fatalist: "Conditions exist for a real GDP growth of 6,5 percent for this year. Now, to maintain that urban areas are growing at the expense of rural areas is incorrect.

"What is correct is that the growth rate in rural areas should be faster, given that this is where the majority of the population lives, and that is where the nexus of poverty is."

He said urban growth had in fact helped to absorb some rural unemployment.

Like Nizeyimana, Kaberuka is convinced that there is potential to increase agricultural productivity.

It is now barely mechanised; just five percent of the farmers use fertilisers; and very few receive bank loans.

Moreover, when implemented, land reform could create more economically viable farms than the current "postage stamps", which have an average size of only 0,7 hectares. Irrigation techniques could also be spread.

"There is more arable land here than in the Nile Delta," said Kaberuka, offering a thought-provoking comparison.

To compensate for the losses in coffee and tea revenues, the government is investing in quality improvement and yield increases. It plans to generate $100-million (about R650-million) in export revenues for each commodity within the next 10 years, which would be an eightfold increase for coffee and fivefold for tea, compared with the 2004 figures.

The government expects coffee output to grow from 14 500 tons in 2003 to 35 000 in 2010 - at last getting back to its pre-genocide levels.

Tea production has already reached 15 500 tons, surpassing the pre-genocide level by 40 percent. The government expects it to double again by 2020, owing to a 30 percent extension of the plantations, new plants, more intensive use of fertilisers and an increase in the density of trees in the plantations.

In the long run, the government wants to transform this rural-based economy into a services centre for the region. Kaberuka expects that by 2015, services could generate $90-million of foreign exchange earnings.

Tourism is also growing, mainly attracted by the mountain gorillas, zebras and hippos of Kagera Park.

South Africans are leading the tourism revival. Last month, the Southern Sun Group launched the five-star Intercontinental Hotel in Kigali, with 97 rooms, six suites and a 300 square metre presidential suite. And the group has almost completed the four-star Kivu Sun Hotel at Gisenyi.

Rwanda is also investing in infrastructure. The German engineering company Lahmeyer won the contract for the management of water, while electricity parastatal Electrogaz is planning to increase its power-generation capacity.

Options include converting methane gas from Lake Kivu into electricity. The potential power output is estimated between 200 and 700 megawatts.

The development of telecoms has been impressive. Rwandacell's network covers 70 percent of the territory and the Rwandatel parastatal increased its turnover from $4 million in 1996 to $50-million in 2002, with an increase in customers from 7 000 to 40 000.

Rwanda is also investing massively in education and information technologies. One of the priorities is a fibre-optic cable link with the Indian Ocean. About 350 secondary schools have internet connectivity.

In 1998, the Kigali Institute of Science and Technology was built on the site of the Military Academy, where the genocide was planned, a potent symbol of renaissance. It has partnership agreements with the Cape Technikon, Technikon Pretoria and the University of Durban-Westville school of engineering.

Another niche market being exploited is the trade and processing of local and regional minerals. The Rwandan army is no longer involved in the trade of minerals from the Democratic Republic of Congo (DRC), but Rwanda remains, as before the war, the main outlet for eastern Congolese traders of columbo-tantalite, tin ore and wolframite, since surface links between the eastern DRC and its capital, Kinshasa, are in a disastrous state.

Overall, even if foreign assistance provides half of national revenues, Rwanda's economic development since the genocide must be deemed spectacular.

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