Why 2011 has been a good year for Rwanda

As we kiss 2011 goodbye, and prepare to usher in a New Year, this is the moment when we reflect on the past 365 days and examine if there’s anything worth to write home about. At an individual level, we either wallow in shame or bask in glory for great accomplishments and begin to set targets for the New Year. At the level of governance, the top leadership (for those that care) asks itself one fundamental question; what contribution have we made that has changed the lives of our people, this year? The answer to this normally comes in what has traditionally come to be known as the New Year Presidential address. And so one would ask, how has Rwanda faired in 2011. The answer to this question cannot be exhausted within the space allocated to this column. I will simply pick two illustrations. The year 2011 has not been a kind year for the region. The EAC has been marred by political upheavals and economic turmoil. The bloc witnessed unprecedented levels of political unrest and volatility; where in some incidences echoes of the Arab spring seemed to resonate well with acts of rebellion in some of the member states. This widespread unrest was largely triggered by economic woes that led to skyrocketing inflation (which remains), weak currencies and an ever widening balance of payment deficit for most member states Run-away inflation continues to be a nightmare, making the cost of living unbearable to many as essential commodities are barely affordable. As a result of this, we have the rest of EAC turn into breeding ground for strikes. If it’s not traders today, it’s doctors, teachers or university lecturers the next day. But, Rwanda seems to have performed well on this front. Though the country has endured its share of tough times, having to make structural adjustments to contain inflationary pressure, the overall picture is that of a well managed economy. Let’s compare the figures: In November this year, inflation stood at 7.39 percent in Rwanda compared to 29 percent in Uganda, 19.7% in Kenya and 19.2% in Tanzania. Rwanda’s economy is the only one projected to grow at an average of over 8 percent whereas some countries are as low as 3 percent One would wonder how Rwanda, which imports most of her essential commodities, which arguably should be worst hit with imported inflation, has managed to escape this monster. How landlocked Rwanda, whose high transport costs should mean high prices for both imported and locally manufactured goods, fairs well compared to her more strategically located neighbors. Sadly, I’m not an authority on economic issues to provide an authoritative answer. But what I can point out is the discipline with which this government manages its business. Discipline in public spending that is restricted to priority areas. Discipline in controlling fuel prices and ensuring that speculative traders are contained. Discipline in implementing timely monetary policies that mop-up excess liquidity whenever need arises and ensuring that the commercial banks adhere. An introduction of some of these measures might not necessarily be music in certain circles. But, because of the transparency in implementing these decisions (with no favoritism) and also because of the growing results that are evident and serve the interests of the common good, these structural adjustments are easily embraced as opposed to some resistance we see elsewhere. That is why a rise in the Central Bank Repo from 6 to 7 percent does not necessarily translate into an increase in the interest rates of our Commercial Banks because these banks are already mobilized and know the underlying reasons for such an increment. The key word here is openness. Containing inflation has been one good story for Rwanda in 2011. The other has been taming hunger. Again, going by what the region witnessed in 2011, especially in some parts of Kenya, Uganda, Burundi and Somalia, the outcry from hungry souls grew louder and louder, especially mid this year. In Kenya, we were treated to ugly television scenes of children suckling from udders of skeleton-figured goats. Whereas in Rwanda, even in semi- arid and previously hunger prone Bugesera, the story has changed. For the last three years, the Wananchi are having bumper harvests. And, like I mentioned in this column last week, the Rwanda Defence Forces have been instrumental in this vision. Therefore, as we usher in 2012, the biggest burden continues to lie on the shoulders of the people running our economy. Regional economies are in intensive care and for us to shade off this pressure; it will take a lot of strategic thinking with quick solutions. Some might be biting to the common man. But for now, the ability to contain inflationary pressure and ensuring that no Rwandan goes to bed hungry, has been, in my view, the greatest reason for toasting to a successful 2011. Happy 2012, may it bring joy and prosperity in your lives! akaeus@yahoo.comOn twitter @aasiimwe

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Why 2011 has been a good year for Rwanda