This chapter describes how dependence on coffee and other primary commodities exacerbated foreign dependency, especially during fluctuations in global primary commodity prices. The chapter discusses the Rwandan Patriotic Front’s (RPF) origins, including the key paradigmatic ideological foundations of the party while discussing the civil war and the 1994 genocide. The chapter ends by outlining three periods of the evolution of political settlement under RPF rule. Between 1994 and 2000, RPF loyalists were rewarded, while there was increased concentration of power among Tutsi RPF members. In the 2000s, until the early 2010s, RPF leadership centralised control among a smaller clique within the RPF, with increasing elite fragmentation characterising this period. In the third phase after the early 2010s, there has been increased external reliance, and the visible threat of transnational coalitions, comprising RPF dissidents and disenchanted domestic elites, has emerged but been contained.

This chapter analyses the political economy of Rwanda’s financial sector. It presents the evolution of Rwanda’s national banking sector and the ways the Rwandan Patriotic Front has sought to mobilise domestic resources to invest in strategic sectors. It provides an overview of how African financial sectors have been transformed in varied ways through adapting to three kinds of financial sector reforms: policies influenced by the market-led consensus, developmentalist strategies and the influence of offshore sectors. Rwanda, in its attempt to transform Kigali into a financial sector while mobilising state-driven investments for strategic investments and adopting ‘best practice’ financial sector reforms, encapsulates the contradictions associated with being influenced by these three sets of policies concurrently. Next, the chapter describes how the Rwandan government has innovatively mobilised domestic resources to fund strategic investments. Innovations include its pension fund, the Rwanda Social Security Board. The chapter concludes by discussing how elite vulnerability has constrained the capacity of the Rwandan government to concentrate resources and financial expertise in one specific financial institution, thereby inhibiting the effectiveness of strategic investments.

This concluding chapter reiterates the main contributions of the book. Growth in most African countries has been characterised by a transformation from low-value agriculture to low-value services. As a result, structural transformation has remained largely elusive within Africa. Services has been the fastest-growing sector on the continent. Rwanda is unique among rapidly growing African countries in explicitly focusing on becoming a services hub. Using the case of Rwanda, this book shows that contemporary late development, which is more dependent on services, results in more transnational forms of dependence and political contestation than experienced in prior experiences of late development. The book ends with thoughts about the future of Rwanda. It argues that in the immediate short term, any instability will depend on what happens in the Democratic Republic of Congo (DRC). In the long term, Rwanda’s political stability depends not on the government’s capacity to contain domestic popular mobilisation alone but on the capacity of transnational coalitions of dissident elites and external actors capitalising on existing horizontal inequalities to challenge the Rwandan Patriotic Front rule.

Chapter 2 sets out the book’s theoretical approach. The first half argues that state-led development requires the formation of states with the capacity and autonomy required for effective intervention. However, it is only where state-led development aligns with elite threat perceptions that leaders make politically difficult choices to promote structural transformation. For many authoritarian regimes, it is when ruling elites face mass distributive pressures alongside resource constraints that they pursue development to expand the resources available to secure mass acquiescence. The second half of the chapter examines the specific challenges facing ‘late-late’ developing authoritarian regimes. First, the changing global economy, which is fragmented into global value chains with manufacturing driven by foreign investment, rather than domestic capitalists. Second, the delayed demographic transition that gives rise to large-scale population growth and urbanisation, enhancing mass distributive pressures. As such, regimes face severe distributive pressures at the same time as the state’s ability to address these is constrained by the global economy.