 Privatisation |
Rwanda's privatisation process has reached peak
as large companies with a strong bearing on the
economy come on market. According to the officials
of the privatisation secretariat, the companies
now coming on the market include tea estates,
the water and power company-Electrogaz, Rwandex
and the telecommunication company-Rwandatel.
"We feared to start with the larger
companies like those dealing in Telecommunications,
water and electricity. We focused mainly on smaller
companies that obviously got mostly taken over
by locals," said executive Secretary
of the Privatisation Secretariat Mr. Robert Bayigamba.
The privatization exercise was initiated in Rwanda
in 1997 with 72 companies and institutions included
in the program. The first privatization operations
were carried out in 1998. This was in the spirit
of liberalization of the economy with multilateral
partners; IMF, World Bank, and it was also in
the framework of good governance adopted by the
Rwandan government.
The privatization drive was also fueled by the
fact that many companies had been closed down
because either the managers had been killed or
had fled outside of the country during the genocide.
Another reason was that the government had no
money with which to revitalize the many companies
that had been destroyed during the war.
Five years within the privatization program,75 %
of what has been privatised so far has been taken
over by the locals. |
By the end of the year
2001, the privatisation process had earned the country
RWF4.2 billion ($ ) but expenditure on liabilities
had taken FRW 2.9Billion ($ ). The big companies
lined up for sale in the coming years promise to
earn the country considerable foreign exchange.
The privatisation of these companies is expected
to increase the private sector's participation
in business and at the same time reduce competition
between government owned companies and the private
ones.
Benefits from the privatisation program are expected
to be significant for the economy and would help
make the country's business environment more competitive.
The sale of tea estates is aimed at creating an
enabling environment to facilitate the establishment
of a market-based tea industry through the introduction
of private management and investment in tea estates
and factories.
It is in the essence of privatisation that the
government of Rwanda has in the past few years
expressed commitment to promote the private sector
participation in business. It has maintained dialogue
with the private sector and replaced the government
owned chamber of Commerce with the Private Sector
Federation working jointly with the Rwanda Investment
Promotion Agency (RIPA).
RIPA seeks to improve private sector investment,
launch business initiatives and ensure the participation
of the whole spectrum of private sector operators-
from micro-enterprises to larger firms. Drawing
on the experience gained from the privatisation
of state firms, the government says it realises
the importance of actively enforcing a clear and
precise business and legal environment. |
