Change with stability and continuity: A political homework. Part IX

One sector that is critically sensitive to the political homework at hand is the economy, and trended growth that unless sustained has a direct knock on effect on other sectors which it sustains by financing mechanism.
Prof. Nshuti Manasseh
Prof. Nshuti Manasseh

One sector that is critically sensitive to the political homework at hand is the economy, and trended growth that unless sustained has a direct knock on effect on other sectors which it sustains by financing mechanism.

Economic actors and agents especially in private sector, factor in their business decisions the type of leadership of the country and whether this can facilitate their interests by providing favourable and predictable business environment within which these can operate.

Their return-risk cut off, fundamental to their investment decisions is always bench marked to the political governance in place. 

With regard to our country, our economic recovery and thus growth has been but a miracle. Up until 2002, one had to have an optimism of faith to believe that, our country would be where it is today, in terms of sustained economic growth that has astounded even the most optimistic development economist.

They are few explanations to this phenomenal growth. The usual basic material endowments necessary to spur growth be their natural resources, market, of human capital leave alone capital, are not what we as a country can boost to explain this growth.

Like Singapore which shares similar resources constraints, exemplary and leadership of President Paul Kagame and governance structures he put in place, remain the only perusable explanation for our growth that ranks among the highest in Sub-Saharan Africa, and indeed among the top ten in the world.

That he has served our beloved country with all that he has, is not in doubt, for results of our underlying economy attest to this and provides strong empirical evidence of his transformative leadership and the passion he has shown in driving our economy, indeed akin to a CEO of a private corporation.

This is a paradigm shift in leadership typical of other African economies, where leaders, lead for themselves and their kin and kith as well as their cronies and political patronages characteristic of many African economies.

Milk and Honey


This form change management started with mind-set shift and trickled down to entire civil service creating a culture of delivery that is now brand Rwanda.

And so, such home grown initiatives as imihigo, ubudehe, umuganda, etc has reinforced this brand enabling our country to achieve targets that had eluded our country prior to 1994.

For some of us, who had not seen our country before 1994, a return home was coated by the strong feeling of passion passed on by our parents, that Rwanda had no comparatives, and indeed a land of milk and honey.

My own experience in 1994, was not only a disappointment of expectations of my strong held image of what I had been made to believe, but a total absence of any possibility of even attaining meaningful growth going by what economists hold dearly-ingredients of growth, totally absent in a country that, I had held high.

That my image of land of milk and honey was shattered by the total destruction of our country not only by war, but much more so by mismanagement of the previous divisive and indeed sectarian governments which had nothing to show for development except a deprived people fed into genocide ideology, which is all they could show, and believed in it so strong that, walking bear footed, and effected with jiggers, living in mud houses was accepted as way of life, and resigned poverty is what defined Rwanda by 1994.

Nevertheless, we have had fundamental changes since then. Thus, the country’s economic growth as measured by GDP increased six fold from USD 1.1 billion in 1994, to USD 6.3 billion in 2012, incredible growth by all standards. This translates into GDP per capita of over USD 600 today compared to USD 100 by 1994.

This also means that, literally all Rwandans were leaving below poverty levels of less than USD 2 per day (as per UN measure of poverty levels) by 1994.

This growth has not just meant that, we have the so called ‘something for everyone’ measure growth of humanitarian institutions, but rather creation of the middle class that is the main driver of private sector development, and one that holds the key for our sustainable growth.

This has led to improvement in the living standards of Rwandans, leave alone allowing the country to have a healthy balance sheet.

What is more compelling for this growth is that, it has been consistent for all this period enabling our country to uplift up to 1 million compatriots out of poverty, and if this is trend is maintained for another ten years or so, no doubt our country will usher into development mode, from the current growth mode of a least developing country, and into possibility of a developed mode, if the trend is maintained at double digit growth rates for at least two decades.

This growth trend attests to the exemplary leadership we have had and one that has transformed other sectors of our economy through the financing mechanism generated by such growth.

Hope no strategy

However, these trends are not yet anchored into stable and sustainable growth fundamentals.

For sectors and institutions necessary to do so all are very weak, and indeed at their construct levels that any changes in these will reverse these growth trends and with them all we see as a country today.

An economy unlike other sectors takes a direct hit from poor leadership, and the knock on effects is immediate. A number of readers have expressed ‘hope’ that our homework will translate into what is good for us as a country.

But hope is neither a strategy nor a policy we can sit back and buy time in the assumption that, events will automatically manage our homework. This approach is a disaster, for events if left alone, will give us results akin to those based on hope: No results.

Management of investor confidence, be they local or foreign requires that, our home be taken head on, and soon.

Not doing so will create uncertainties whose consequences, we cannot afford especially the knock on effect on our fragile economy which as argued in earlier articles requires that,we maintain strong leadership which is led by the ablest, most dedicated and toughest, has the extra drive, intellectual verve, an extra tenacity and the will to keep our economic path on the right trend and even scale the same up.

President Paul Kagame, has provided this leadership, which is why our homework, becomes more intriguing if you factor in change.

In his research on economic growth and political succession in Africa and Asia Pacific, Kelsall (2013) points out that succession tends to be disorderly and disastrous to the economy and the spins off to other sectors accordingly, when the incumbent has had an excellent record of economic growth trended for a number of years. President Paul Kagame has had this, and both visual as well as empirical evidence attests to this. This makes our political homework, a puzzle that unless it captures these real realities of our lives as country, our economy will as expected give us the bitter verdict. We shall not afford the same.

To be continued…

Professor Nshuti Manasseh is an economist and a financial expert.

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