Rwandan President Paul Kagame Dismisses Prime Minister and Reshuffles Cabinet

On Wednesday, Rwandan President Paul Kagame dismissed Prime Minister Dr. Pierre Damien Habumuremyi, who had served in the position since 2011, and swore in his replacement, Anastase Murekezi. No clear reason was given for this change, although Kagame stated at the swearing-in ceremony that “the reshuffle is aimed at energizing the working force and bringing in new blood to consolidate what has been done and also do much better in bringing development and prosperity to the country.” Voice of America reports that Habumuremyi actively engaged with the public, especially through social media, so his dismissal was quite unexpected. However, unverified reports from outside Rwanda allege that the former minister is under investigation for possible links between a family member and the Rwandan rebel group FDLR (Democratic Forces for the Liberation of Rwanda). Habumuremyi will continue serving the government as Rwanda’s high commissioner to Burundi.

Furthermore, according to a unique constitutional rule that requires the cabinet to select new (or reappoint old members) once a new prime minister is chosen, the cabinet was also reshuffled. While most of the key ministers retained their positions, seven were replaced and two new posts were added. The total number of cabinet members is now 32, with female representation at 44 percent.

Ghanaian Labor Union Protests as Cedi Slides

On Thursday, Ghana’s largest labor union, the Trades Union Congress, marched in the country’s major cities, including Accra, Kumasi, Takoradi and Tamale. An estimated 2,000 members—representing a range of diverse professions from miners to health care professionals—attended the protests in Accra to voice their concerns over the weakening Ghanaian currency, the cedi. According to Bloomberg, the cedi has declined by 30 percent against the dollar since the beginning of the year, as inflation has mounted for 10 straight months to 15 percent, and projections for economic growth have been lowered from 8 percent to 7.1 percent. Many observers note that petroleum products have become much more expensive, while government subsidies to utilities such as water and electricity have been cut, inflaming resentment toward the government.

Furthermore, the cedi’s depreciation is having negative effects on Ghana’s cocoa industry, which is second only to Cote d’Ivoire’s in global production. For example, plans for Ghana’s largest purchaser of cocoa from farmers, Produce Buying Co. (PBC), to borrow $30 million from France’s development agency in order to purchase this season’s cocoa beans and storage infrastructure, have been delayed due to the high loan repayment costs associated with the weak currency. As a result, PBC increased its lending from the Ghana Cocoa Board at a higher rate than from the French agency. High repayment costs are cutting into the company’s profit after tax, and, from October 2013 to March 2014, profits decreased by 45 percent to 3.9 million cedis ($1.1 million). These challenges have also created a steep rise in cocoa smuggling from Ghana to Cote d’Ivoire where farmers can get “58 percent more in dollar terms for their cocoa beans,” according to the WSJ.

Africa Growth Initiative Highlights Priorities for U.S.-Africa Leaders Summit

As the U.S.-Africa Leaders Summit draws closer, the Africa Growth Initiative (AGI) team has explored a number of opportunities and challenges faced by U.S. and African policymakers alike. In this blog series, AGI scholars prescribe priorities for African policymakers attending the summit; compare how the U.S. summit layout measures up to similar summits by China, Japan and the European Union; and discuss the trends and opportunities for U.S. trade with and FDI in Africa, among other issues. More blogs discussing other likely topics covered at the summit will be released next week.

On July 29, AGI will host United States Trade Representative Michael Froman at the National Press Club for a conversation about trade, development, and how U.S. trade policy—including the African Growth and Opportunity Act (AGOA)—must adapt to shifts in the global economic landscape. Click here to register.

Amy Copley Research Analyst and Project Coordinator - Africa Growth Initiative

On August 4, the Brookings Institution will convene a high-level forum of entrepreneurs and leaders in business, government, civil society and the media. The event will explore priorities for U.S.-Africa policy; business strategies for economic growth and development; innovation; governance; and shifting perceptions of Africa in the eyes of the rest of the world. Click here to register.