As Rwanda becomes the latest developmental state to sponsor a football team, Pritish Behuria explores the logic behind the deal.
On 23 May 2018, The Rwandan Development Board announced that it had signed a ‘Visit Rwanda’ sleeve sponsorship deal – worth around 10 million pounds a year for three years – with Arsenal FC, the world’s best football club (I am clearly not an Arsenal fan). Many were surprised by this news. Most of all, Dutch Members of Parliament and politicians. De Telegraaf– a Dutch newspaper – published a story, quoting one Dutch MP who said, “I am indignant that a country where we provide solid financial assistance has now become a whopping €30million shirt sponsor of a major English football club.” The country’s aid minister, Sigrid Kaag, has been tasked with looking into the deal and reporting back to the Dutch parliament. Critics of the Rwandan government have also latched on to this news, arguing that the money would be better spent elsewhere.
Since the 1994 genocide, President Paul Kagame’s Rwandan Patriotic Front (RPF) government has led the country through a remarkable period of economic growth. During 1999-2014, Rwanda’s annual GDP growth was 7.7 per cent and its annual growth in GDP per capita was 5 per cent, making it among the fastest growing African countries during that period. As part of VISION 2020, the Rwandan government has focused on creating a knowledge-based economy, largely driven by growth in the services sector (although manufacturing has featured more prominently recently). Rwanda’s government statistics also claim that poverty has reduced significantly though some scholarship has been cautious about such claims and debates have emerged about the veracity of these statistics. The RPF’s reign has remained controversial – accused of human rights abuses at home and abroad – while also being a ‘donor darling’ and popularly seen as a successful country example of African development.
So why has a budding African developmental state sponsored one of the world’s richest (and best) football clubs? Is it simply to please President Kagame (an ardent Arsenal fan who has occasionally been critical of former manager Arsene Wenger)? Or is there some broader strategic reasoning behind it? Sponsoring a football club seems an odd decision for a developing country. But it isn’t exactly rare. Rwanda is far from (being) the only country that has partnered with football teams to attract tourism to its country. Many countries have sponsored football club shirts. For example, Azerbaijan sponsored Atletico Madrid, Malaysia and Puerto Rico have sponsored Sevilla, Qatar sponsored Barcelona and Chad sponsored FC Metz. Emirates and other airlines have also sponsored several football club t-shirts (including Arsenal’s).
Condescending stories in European newspapers (like the Daily Mail) that directly link aid funding to the shirt sponsorship miss the point. Aid money is not directly used in the deal and most foreign aid that the Rwandan government receives is linked to specific projects rather than budget support. The Chief Executive Officer of the Rwandan Development Board (RDB) Clare Akamanzi clarified this and admonished the condescending tone of such news stories. She also pointed out the reason why the government has invested in the deal: to bolster Rwanda’s tourism sector. The sector has consistently been the highest foreign exchange earner for the country. Rwanda’s service-based development strategy relies on the tourism sector’s continued growth – for foreign exchange, investment and job creation.
The logic behind the deal is to concentrate on a strong-performer sector with the hope that it will generate more resources to be spent elsewhere. The growth of Rwanda’s tourism sector has been nothing short of dramatic and has arguably been the RDB’s greatest success. Foreign exchange receipts from the sector have been growing at around 30 per cent annually and are targeted to reach $800 million by 2024. In 2016, they amounted to over $400 million in 2016 (more than double the amount that was received in 2010). As of 2015, the tourism sector reportedly provided 7.3 per cent of direct formal employment in the country. Rwanda is one of the few countries where mountain gorillas can be visited and hosts more than a quarter of them. In the 1970s and 1980s, Dian Fossey studied these gorillas and a Hollywood movie – Gorillas in the Mist – was made about her experiences in the Virunga mountains (that hosts the gorillas) in 1987. Yet the previous government failed to take advantage of the publicity and tourism barely grew.
In the 1990s and early 2000s, the Rwandan government began focusing on reviving the tourism sector and ‘going beyond gorillas’ by focusing on developing other tourism sites including national parks such as Akagera and Nyungwe Forest. The government has also prioritised making Rwanda a global MICE (Meetings, Incentives, Conferences, Exhibitions) destination and a business hub. The Kigali Convention Centre finally opened in 2016. Rwanda quickly generated conference tourism and in 2017, 169 international meetings were hosted there. To attract more tourism and as part of a vision to make Kigali a hub of various kinds (transport, business and finance), Rwandair (the national airline) has rapidly expanded its fleet and flies to over 20 international destinations including London.
Though the tourism sector has grown rapidly, it is unclear whether services sectors (and tourism specifically) can provide the same benefits that manufacturing has done historically. Despite expressing reservations about services-based growth, Dani Rodrik has suggested that it may be a new emerging trajectory of late development in African countries but it may not provide the same benefits that manufacturing-led development did. Contrastingly, Jagdish Bhagwati argues that India’s experience shows that services can be an alternative to manufacturing since services have become increasingly tradable. Ha-Joon Chang argues against such views and emphasises that the most dynamic elements of the services sector actually depend on manufacturing. Emphasising the interdependencies and the possibilities of linkages between manufacturing and service sectors is more useful for policymakers than thinking in sharply-distinct manufacturing and services blocks. With the growth of the tourism sector in Rwanda, there are opportunities to supply goods and services, strengthening domestic value chains. Yet the Rwandan government has not done enough to support its local agriculture and industry stakeholders or link them to evolving demand patterns associated with tourism growth.
The Rwandan government has been successful in building a global reputation for the country as a tourism destination. It has also attracted global hotel brands like the Marriott and Radisson to bolster its image. But a boom in hotel construction of mid-range hotels has led to hundreds of them being put up for auction with owners unable to repay loans. Rwanda’s tourism gamble is built on supply-side logic: once the hotels are built, tourism will come. Similarly, Rwandair’s rapid expansion has continued undeterred by the fact that the airline has never made a profit and the government’s public debt has increased (though it is ‘comfortable’, according to the IMF).
Despite these challenges, for the determined Rwandan government, investments in tourism must continue. Rwanda’s key exports are primary commodities, vulnerable to fluctuations in global commodity prices. The manufacturing sector has been prioritised recently but benefits are not visible as yet. Tourism, meanwhile, has been a consistent and reliable source of foreign exchange. Yet the success of the sector depends on a positive global reputation and the Rwandan government is regularly criticised in the foreign press. International press has already highlighted that the deal grants the Rwandan government with access to hospitality boxes, matchday tickets and access to star players for promotional work, pointedly implying a personalistic element to the sleeve-sponsorship deal.
It will be difficult to actually measure the benefits of the ‘Visit Rwanda’-Arsenal partnership but there is no doubt that it will increase visibility for the country. Football clubs should not be too worried about such criticisms. They have partnered with controversial individuals and governments before. Arsenal may be more worried about sending conflicting messages to its fans though. Emirates does not fly to Rwanda although a competitor (Rwandair) does.
The article was first published on the Global Development Institute blog.
Dr Pritish Behuria (@pritishbehuria) is Hallsworth Research Fellow in Political Economy at the Global Development Institute at the University of Manchester.
The views expressed in this post are those of the author and in no way reflect those of the Africa at LSE blog, the Firoz Lalji Centre for Africa or the London School of Economics and Political Science.
A very good article about contemporary Ruanda. The pros and cons of a political economic and strategic Kagame’s Agenda . To follow up.
The government of Rwanda has gone to great lengths to position the country as a leading tourism destination in East Africa. I leave in Uganda myself but cannot help but admire some of the developments in the country. The governments fight against corruption and creating a sense of nationalism in the country is something new for many of us who travel around East Africa.
A balanced read ! Despite occasional condescending tropes used against Africans (dictatorship, human rights, reputation wreckers, …) This articles explored a different perspective about the deal, the perspective that assumes why the deal will work !
And it would also be interesting to explore the impact such a deal had on the country’s fellow Africans friends and foes alike. Given the buzz the deal created on twitter and on the internet amongst Africans, you may realize many more personalities and countries on the continent are more and more looking up to Rwanda for fresh ideas about how to turn around their fortunes ! And clearly this can contribute in the country specializing in Africa-targeted MICE thus also attracting passenger for Rwandair whose routes and network nodes on the continent are growing. You need to look no more than the Rwanda Convention Bureau (RCB) work and regular visitors to see this positive and interesting trend.
The old paradigm where African countries would sit and wait for dictats from the West in their policy and development strategies seem to be fading, sources of funding have diversified and countries, especially western ones need to learn to evolves into a world of more and more partners dealing like equals.
I totally agree with Deus. This article indeed explored a different perspective about the deal, the perspective that assumes why the deal will work !
Rwanda is a country with small but highly marketed tourism industry. With its collaboration with Arsenal, an international team, the country should expect a bigger media attention than before. And the benefits for this will be reflected in the number of people needing to visit the country for gorilla trekking or any other safari activities.
Rwanda is really doing well with this deal. This has seen the number of tourists increase although the cost of the gorilla permit was doubled recently. Other African countries need to pick a leaf from Rwanda to also grow their tourism industry.
This is a smart and calculated business venture. The country has limited resources for developed and realized was a good way to earn foreign revenue. sponsoring a team has brought alot of awareness and marketing for their gorillas and wildlife safaris.
Great idea, this had exposed the land of thousand hills to the globe. and I wish all African leader pick something out of this. I can personally agree to this because our sell had increased in Rwanda than any other country in East Africa most especially during the pandemic. the number of tourist had increased and the luxury lodges around volcanoes national park.
well this has awlays been a stretegic move , to deliberately promote the county’s tourism potenational and i must say it has worked. the country is recieving lots of tourism people coming in from all parts of world
Rwanda has always been very tactical and daring in terms of investment potentials geard towards promoting foreign exchange earning. the move is already paying off.
This one move has seen Rwanda on the scene world wide in the Tourism Sector , the marketing strategy is admirable! in every aspect a lot of people talk about Rwanda and its Mountain Gorillas, this has largely boosted business for us operating in the travel destination Big thank you to the Rwanda Development Board and Government.
Most of the develpment is pretty much atributed to the leadership of a forward thinking and passionat and patriotic president president
As someone in the travel business, i can confidently say that the deal is yielding in for Rwanda very well. More people, luxury travelers are frequenting Rwanda ever since the Arsenal sponsorship deal.
Rwanda definiely has realised what it means by branding and positioning itself a travel destination. this it already working for them.