KIGALI, Rwanda—Seen from the concrete blocks marking the graves of some 250,000 victims of the 1994 genocide, the glistening skyline in the capital of this East African nation is the most obvious sign of the grand experiment taking place here.
A quarter century after the mass slaughter of as much as 15% of its population, Rwanda has been hailed as a homegrown model of African development and its iron-fisted president, Paul Kagame, is a favorite at international business conferences such as the World Economic Forum.
Rwanda’s economy has grown an average of 7.3% a year since 2000, outpacing its bigger, mineral-rich neighbors. Leaders of other African nations send officials to study the Rwandan Development Board, where local and foreign investors can set up a company within six hours, online if desired.
But rights groups and a growing number of academics point to a darker side of Rwanda’s economic miracle. They say severe political repression, including the detention of hundreds of homeless and other poor Rwandans in “rehabilitation centers,” have diminished the country’s advances. Researchers have questioned whether the economy is actually performing as well as the data says, accusing the government of manipulating poverty and growth statistics—a claim the government denies.
Construction, Rwanda’s main investment target in 2017, didn’t create a lot of jobs, while a little investment in agriculture created many more.
“Anything about Rwanda is absolutely polarizing,” said Pritish Behuria, a research fellow at Manchester University’s Global Development Institute. “A lot of the biggest critics can no longer go to the country.”
At the heart of this debate is what has become known as the Rwanda model: free-market overhauls prescribed by the International Monetary Fund and the World Bank, paired with the unforgiving leadership of Mr. Kagame. Now 61 years old, Mr. Kagame has ruled the country since his Rwandan Patriotic Front ended the genocide that followed the assassination of then-President Juvenal Habyarimana.
“The main driver of all the transformation process in Rwanda is the leadership,” Finance Minister Uzziel Ndagijimana said. “Rwanda was blessed to have a leader, President Kagame, right from the beginning, from the hardest time, 1994, to today.”
Supporters and critics describe Mr. Kagame—a former rebel commander who now has 1.4 million followers on Twitter and hobnobs with Ellen DeGeneres and Bill Clinton—as a disciplinarian with little tolerance for the corruption that has plagued other African nations. In his early days in power, Mr. Kagame would go on drives through Kigali with the capital’s mayor, pointing out things that should be improved. The result is visible today on its palm-lined, trash- and pothole-free streets.
Mr. Ndagijimana and other backers of the Rwanda model say the president’s authority and attention to detail have allowed the country to make grand leaps. Since 1994, the percentage of Rwandans living in poverty has fallen to 39% from 77%, while average life expectancy has surged to 67 years from 29, according to government statistics, which the IMF and other international institutions also use.
Jacques Nkinzingabo for The Wall Street Journal
The country now has more women in parliament than any nation (they hold 61% of the seats); plastic bags are banned; schools are free and obligatory until the age of 15 and every citizen has basic health insurance. On the last Saturday of each month, all working-age Rwandans are required to do at least three hours of community work.
The government says it wants to turn Rwanda into East Africa’s financial and information-technology hub and achieve upper-middle-income status by 2035. In today’s dollars, that would mean raising per capita gross national income to at least $4,000 a year from the current $800. The IMF calls the plan ambitious, but says the required growth rates “might be possible.”
This side of the Rwanda model is on display on the sixth floor of Kigali’s ICT Chamber, a high-rise in the capital’s center. Here, Aphrodice Mutangana, the 33-year-old general manager of the K-Lab, spends his weekends teaching 9- to 15-year-olds to code. On weekdays, the lab, which is sponsored by the Rwanda Development Board, offers free high-speed internet and mentoring to young entrepreneurs.
Mr. Mutangana said the K-Lab has spawned more than 60 companies in six years, including a successful ride-hailing app and a start-up that produces electronic-payment cards used in Kigali’s public transport. He said the government’s emphasis on education and investment sets Rwanda apart from other African countries. “Whatever you do, you can see the fruits of your labor easily.”
Jacques Nkinzingabo for The Wall Street Journal (2)
The flip side of the Rwanda model is harder to spot.
Big construction projects, including luxury hotels and a $300 million convention center, have led to a spike in government debt, forcing the country to request a $200 million IMF bailout in 2016. Public tenders are often won by companies owned by the ruling RPF and the military, further tightening Mr. Kagame’s hold.
In last year’s election, the president won 99% of the vote, after his most prominent challenger, Diane Rwigara, was disqualified and hit with what she says are politically motivated charges of having forged signatures needed for her candidacy. Secret military detention centers, meanwhile, are being used to torture alleged “enemies of the state,” according to Human Rights Watch, which has also accused security forces of executing petty criminals. The government denies these allegations.
Gabriele Steinhauser/The Wall Street Journal
There are also questions over the government’s economic performance. Skeptics, including Mr. Behuria, point out that investments have concentrated on construction, which doesn’t produce a lot of jobs. This has come at the expense of transforming agriculture, which still employs around 70% of Rwandans, and manufacturing. Over the past five years, 69% of investments went to Kigali, home to just 10% of the population.
Off the main transport arteries houses are constructed from mud and small fields, carved into the thousands of hills that dominate Rwanda’s geography.
Yvette Duhizimana, who lives near a nature reserve where tourists pay $1,500 to visit mountain gorillas, makes around $11 a month helping neighbors tend their fields or animals. “Sometimes I don’t eat,” the 29-year-old mother of two said, her baby daughter strapped to her back.
The quality of life has improved in Rwanda, but the country still lags behind its neighbors in some areas.
Human Capital Index
Productivity relative to a benchmark of complete education and full health
Children under 5 not stunted
Fraction of children under 5 years old experiencing normal healthy growth
Harmonized Test Scores
Combines data from major international student achievement testing programs
The lives of people such as Ms. Duhizimana are the subject of a debate that has played out on the pages of the respected Review of African Political Economy over the past two years. A group of academics accuse Rwanda’s statistics agency of fiddling with inflation and other estimates to boost gross-domestic-product and poverty-reduction figures. Rwanda’s economic miracle, they say, is really a mirage.
“There’s no credible institution that has criticized our numbers,” said Mr. Ndagijimana, the finance minister. “There are only some individuals who have their own agenda.”
But even in official statistics, Rwanda doesn’t always perform well. Its score in the World Bank’s Human Capital Index was the same as the Democratic Republic of Congo. Some 37% of children under 5 are stunted because of malnutrition.
For Ms. Duhizimana, the ultimate test of the Rwanda model will be her children’s quality of life. “I hope [their life will be better], since I didn’t get to go to school,” she says. “If they finish school, maybe they will find jobs.”
Write to Gabriele Steinhauser at [email protected]