The statement by Akamanzi of Rwanda Development Board (RDB) that tourism sector made $400 M in revenues does not explain the $40 M donated to Arsenal , #Kagame‘s favorite english club. Akamanzi argues that the donation is an investment in tourism since a ‘visit Rwanda’ logo will be on shirt sleeves of Arsenal’s players.
A good manager does not make decisions based on Total revenue (TR) only, to conclude that an investment will be profitable. The lady should remember how the profit maximization is achieved. For that, Akamanzi should reveal the cost and profit within the $400 M. At least that would show us that the sector made a profit bigger, equal to zero or even less.
That could provide answer to the first concern: we should know whether the money being given to Arsenal is not taken from foreign aids.
Another concern relates to the profitability of the so called investment. $40M marginal cost must generate the same amount in marginal revenue.
For that to materialize, the so called investment should attract $13M in marginal revenue the first year and much more than that in following years considering the expected inflation rates. A good decision maker would take into account the population growth too to cater for the new born ones to enjoy profits.
1. The duo #Kagame #Akamanzi should have done a small feasibility study before spending carelessly
2. The debate should not be displaced. It is not why Rwanda is donating to Arsenal (the poor giving to the rich) rather the public funds being spent without informing the citizens either directly by making data available for consultation or via the representatives of the people in national assembly.
3. Choosing Arsenal as the beneficiary of the funds should have been decided after considering other potential partners whith whom doing business could bring more profits.
4. Two officials (Clare Akamanzi & Olivier Nduhungirehe ) who spoke about the issue were not able to say how much money was involved in that deal. Knowing Kagame’s style, the poor guy and lady are cleansing the crime scene of dictator of Rwanda.
Consultant Economist/ Geographer