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Is Kagame headed for more seven years in Urugwiro? (News analysis)

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Kigali: A murdered opposition politician and journalist, as well fierce attacks from rights groups will not keep President Paul Kagame from winning a second term next week - or to slow the pace of investment into Rwanda, say analysts, foreign investors and donors.

In Ruvabu campaigning: President Kagame may not need to worry about whether he gets to Village Urugwiro (Photo: PPU)

While human-rights groups criticize the 52-year-old leader for restricting political freedom, he’s also been praised for resurrecting Rwanda’s economy. Kagame has pledged to continue policies that contributed to average annual growth of 8.3 percent in the nine years through 2008.

“We will not abandon our investment interest in Rwanda because of violent incidents,” said Robert Fogler, a founder of Kigali-based Thousand Hills Venture Fund, which he says has spent $1 million so far. The stakes are in technology, cotton and cement projects, according to the Fund’s website.

“We have seen that investors who dash in and out of communities based on temporary troubles or short-term uncertainty can cause great harm,” Fogler said in an Aug. 3 interview from the US state of Denver.

The Aug. 9 vote comes after Andre Rwisereka, deputy leader of the opposition Democratic Green Party, was found murdered July 14, and Jean-Leonard Rugambage, editor of the suspended Umuvugizi newspaper, was shot and killed June 24. Rugambage was reportedly investigating allegations the government was behind the June 19 shooting of Faustin Kayumba Nyamwasa in South Africa. The former Rwandan army chief of staff survived.

The government denied any involvement in the incidents. Other very bitter and vocal opponents of Kagame have been threatened, according to New York-based Human Rights Watch.

Multiparty Elections

Kagame led rebel forces that ended the genocide of ethnic Tutsis and moderate Hutus. He came to power in 2000 after President Pasteur Bizimungu was deposed and then won a seven-year term in September 2003 after Rwanda’s first multiparty elections.

He now faces three challengers: Jean Damascene Ntawukuriryayo, deputy speaker of parliament, Alvera Mukabaramba of the opposition Party of Progress and Concord, and the Liberal Party’s Prosper Higiro. Slightly more than 5.2 million of Rwanda’s 10million million people are eligible to vote. Results are expected starting Aug. 10, according to the electoral commission.

All through the campaign, none of the other contenders have raised any attacks on the incumbent. Save for programmes from the second biggest party PSD on Ntawukuriryayo which has been fronting ideas which seem to put it at par with ruling block, the others have simply been saying they will add onto the many good things that have been accomplished.

In a first TV debate for the four parties last Friday, the other three parties came under continuous scrutiny for not having anything new. Everything you are proposing has been done by the RPF, said a member of the audience. But the party representatives at the debate stood ground.

Senator Odette Nyiramirimo was visible angry as she defended her Liberal Party (PL), arguing they have been party to whatever has been achieved.

It’s “almost certain” Kagame will win “because of what he has achieved,” said Frederick Golooba, political analyst at Makerere University in neighboring Uganda. Rwandan opposition parties are also “too weak to oust an incumbent,” he said in an interview.

Foreign Investment

Foreign direct investment increased to $541.2 million in 2009 from $32 million in 2003, according to government hybrid agency, Rwanda Development Board. Investors include Starbucks Corp., the world’s largest coffee-shop chain, and Issaquah, Washington-based Costco Wholesale Corp., which have become the biggest buyers of Rwanda’s coffee, the backbone of its economy.

“The atmosphere of the government is about trade and investment, not about aid,” Peter Torrebiarte, director of coffee sustainability at Starbucks, said in a telephone interview. “That’s very attractive because we believe in that model.”

David Sherman, a spokesman for Costco, said no one was available to comment because the company’s international managers are involved in a weeklong meeting.

Coffee Exports

Rwanda will produce 27,000 metric tons of coffee this year, up 13 percent from 2009, estimates the Rwanda Coffee Development Authority. The country exports 98 percent of its crop.

Rwanda produces Africa’s second most-expensive tea after Kenya, said Mombasa-based Africa Tea Brokers Ltd. in a report released last week after an international tea auction. Agriculture accounts for 33 percent of Rwanda’s $10 billion economy, according to the latest African Economic Outlook report.

Kagame’s ruling Rwandan Patriotic Front says he should remain in power to extend the economic expansion. Growth is forecast to accelerate to 7 percent this year, Finance Minister John Rwangombwa said June 10, after slowing to 6 percent last year because of the global crisis. Rwanda relies on aid from foreign donors to finance about half its budget, according to the Foreign Ministry.

While the economy has prospered, opposition parties complain that Kagame’s party dominates the electoral commission and that they have been blocked from registering presidential candidates. Incidents of harassment and intimidation have increased ahead of the vote, Human Rights Watch says.

‘Diverging Stories’

The controversy may weigh on investors after the election, said Yvonne Mhango, head of Africa research at Johannesburg-based Standard Bank Group Ltd. Rwanda now has “two diverging stories” -- the growing economy and the increasingly oppressive political environment, she said in an Aug. 4 telephone interview.

While the oppression will likely “ease or subside” once the election season ends, “I think private investors are going to be a lot more wary,” she added.

Their caution may be tempered by policies that have increased access to credit and simplified rules for business start-ups, which contributed to Rwanda’s selection as the “top reformer” in the World Bank’s 2010 Doing Business report.

“There are so many people in the donor community and the West that have invested themselves so strongly in Kagame,” Laura Morrison, an Africa analyst at Control Risks, a London political-risk management company, said in a telephone interview. “They would rather try and bring him back on the straight and narrow by talking to him than by criticizing him in public.”

For Foreign Affairs Minister Louise Mushikiwabo, all the talk about repression and crisis is “just election hype”.

“Come September, everything will get back to normal,” she said in a recent interview.

“Free and fair”

The donor community says the introduction of a revised electoral code should ensure a peaceful and technically sound ballot, following the European Union's recommendations after the 2008 legislative elections where they found procedural irregularities in over half the polling stations.

Frans Makken, Dutch ambassador and co-chair of the EU fund for the NEC, said results will be published outside polling stations and ballot boxes numbered to aid transparency.

"The electoral law has been adjusted for the better, thousands of volunteers have received training, instructions have been adjusted in line with EU observations. We trust that the conduct of the elections will be free and fair," Makken told Reuters last week.

"There are four presidential candidates who all get a fair chance to campaign and to get their manifestos across to the electorate... But the sheer size of the RPF, and the fact that it has seven years of successful socio-economic development to show for, makes it very difficult for the others to compete."



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