It seems like a story that wont just go away. Impoverished Rwanda may have splurged on two expensive jets as a means to cut the cost of transporting President Paul Kagame to and from his numerous trips around the world but as Rwandese and indeed the world grapples with the news of how big a hole the jets drilled and continue to drill in the state treasury, news that one of the jets – Global Express ZS-ESA – was exported and then re-imported into South Africa adds a few questions to an already swollen questionnaire.
Details on a South African Civil Aviation Authority document show that on January 6, 2011, Repli Investment No 29 (PTY) Ltd, the South African registered company (co owned by Paul Nyirubutama, Paul Manasseh Nshuti and Sekoko Hatari) and to which ownership of the controversial jets has since been attributed, exported the Bombardier Aerospace BD700-1A10, only to re-import it 20 days later. Such obviously would seem to have been a very costly exercise given that it will have attracted duties from the revenue office as well as value added tax.
Efforts to try and get the details from the South Africa Revenue office were unsuccessful although they did return one email saying “they do not discuss individual transactions”. Whatever the case, the amount will have been sizeable given that South Africa charges an average of 20% as duty with VAT at 14%.
Rwanda and indeed Repli refuses to confirm how much was exactly paid for each of the two executive jets although estimates going by the market rate have put the cost of each at approximately $50 million. It would appear that up to $14 million worth of VAT alone might have been paid on one jet when it was exported and then re-imported.
A source in Kigali confirmed that indeed there had been a re-importation because “first somehow, someone believed that the delivered jet was not up to the agreed standard but also because there was a disagreement as to its interior design. A bit bizzare for a jet to be returned at such an expense but as this very source added, “the trouble was that there was a certain standard was needed and there was obviously someone who wasn’t particularly happy with the delivery. Plus remember these were jets which meant not only to transport the head of state but some notable VVIPs. Those incharge wanted the best value for the money”.
Value for the money indeed. And who can fault them. Considering that most private jets cost between $6 – 50 million, at 50, the Bombardier is among the best there is. If only the payment had not been drawn from state coffers. In a March 7, 2010 letter to the South African Times, Jean Paul Nyirubutama, the Counsellor in the High Commission of Rwanda, denied the jets were owned by the Rwandan government (or indeed President Kagame as many believe). Nyirubutama insisted “investments towards the ownership of the aircraft were made by private Rwandan interests and not by the government”. Very questionable indeed if you consider that three of the assumed owners had until then remained unknown businessmen in Rwanda. A friend of mine laughed one time when I told him that a group of three Rwandan businessmen were behind the purchase of the jets.
Apart from Sekoko Hatari, the other two have been and remain public servants. Many remember them as having and still being not as established to secure millions of dollars to purchase the executive jets “and that is even if it involved obtaining a loan,” one source added. “Tell me where would a man like Nshuti get the collateral to stake for any bank to give him or his business partners over 5 million dollars leave alone 100 million. I will not be fooled into believing this hogwash. It is a lie and the real owner must be having a laugh as these pawns take the heat. It is crazy, it is crazy Akanga.”
And you do not have to go far to see some sense in what this source was trying to say. Conducting big time business in Rwanda is as easy as conducting business in Italy. But whereas in the latter you have to have the blessing of Silvio, in the former, you must be willing to sacrifice for Kagame. It is that simple.
Many have been in this position before. Those who have successfully conducted big business in Kigali are the ones who have allowed the ruling party (read RPF under Tristar) to be part of their businesses. Either that or there is no business. Of course the government insists there is more to doing business in Rwanda than just knowing the right people – or being close to the main man – and in fact Rwanda has on two occasions posted some good scores with the World Bank business index for the favourable place to invest (thanks to the extensive PR courtesy of Racepoint et al). It has been projected and sold as the place where it takes less time to start up a business than it takes to secure a meeting with a high ranking minister.
What those details never tell you though is that in reality the opposite is true. Rwanda is also a place where it takes probably the exact same time to have your business crippled or plan squeezed. Local entrepreneurs will attest to this. Ask any government official why there still is only one television station in the country 17 years after the genocide. The answer is a typical one – “remember the role of the media in our history?”. They will never tell you that on three occasions the government has been approached by sane investors (clearly different from the crazy Hasan Ngezes of yesteryear) and on three occasions the truth has been that the demands in terms of shares to the ruling party have been astronomically anti-business leave alone media independence.
But before I meander into the beatitudes of the incredible business climate that is Rwanda, I wonder if any of the many defenders of the regime in Kigali will at least come clean here once and for all on how much the two jets are costing us as a nation and whether there is a system in place to ensure that whatever was spent to satisfy the demands of our dear head of state. Some will say there is need for concern given that even with the jets story and furore it caused last year, monsieur PK has a year later chosen again to spend like a Saudi Prince, and again from our coffers, spending an imperious $20,000 a nigh suite in one of New York’s finest hotels. Will someone at least remind him that some of his people are struggling to raise enough for the brilliant Mituele, or even buy uniforms for their sons and daughters to attend his much publicised UPE schools, deep down in the village.