Rwanda is currently undergoing Africa's most ambitious privatization campaign. Indeed, the scheme is among the most ambitious and systematic anywhere on the planet.

The programme began in 1997, and with less than a year before the process of selling off State companies is due to be completed, barely 10 large enterprises remain in government hands.

In the process, a dynamic, competitive and flexible economy is beginning to take shape.

Over the last decade, more than 40 companies out of an original 74 have been divested, ranging from tea plantations, banks, telecommunications firms, the coffee exporter Rwandex, the Soprotel hotel company, pharmaceuticals firm Labophar, and even State publisher Imprisco.

Manasse Twahirwa, executive secretary of the Privatization Secretariat, explains that revenue generated by the sale of State companies frees the administration to focus on other areas of long-term economic planning.

"The government will not be involved in providing services and products that can be delivered more efficiently by the private sector," says Twahirwa.

Instead the State will continue to act as a catalyst, ensuring that infrastructure, human resources and legal frameworks are geared toward stimulating economic activity and private investment.

This has involved creating an enabling environment for investment and businesses, hand in hand with setting up of institutions such as the Rwanda Investment and Export Promotion Agency (RIEPA).

Rwanda's membership of the East African Community, expected to begin over the coming year, will open up new markets for the country. But as Twahirwa points out, to fully take advantage of the potential of access to this common market, the business sector will need to improve its competitiveness.

A viable private sector able to drive sustained economic growth is key to the government's Vision 2020 programme. Although foreign direct investment is being actively encouraged, Twahirwa points out that the country also needs to create conditions that will allow the development of a middle class.

The private sector is having a growing impact on the overall growth of the country. Tax revenue now makes up 13 per cent of gross domestic product (GDP), and as Twahirwa points out, the bulk of this comes from the private sector.

Growing relations with China

"Rwanda and China have enjoyed good co-operation for many years, something that will continue we are totally open to Chinese investors," says Twahirwa, adding that the mining and tourism sectors probably offer the best opportunities for Chinese investors.

But he says Chinese investors have been slow to take part in the privatization process. "I think Chinese people know about Rwanda, but the companies privatized to date have not been of huge interest to them they need to be informed better about Rwanda."

Twahirwa says the mineral sector is probably the most interesting to Chinese investors.

With identified supplies of cassiterite, wolframite, columbo-tantalite, gold, amblygonite, beryl, and semi precious stones such as topaz, corundum, amethyst, chiastolite, opal, agate, flint and rubies, mineral commodities used to contribute around 10 per cent to export earnings before the genocide.

Traditionally run by small-scale local operations, the mining sector remains largely untapped. The government wants to attract foreign investors, particularly to carry out exploration. And interest from South African and Australian players is rapidly changing the face of the industry.

Tourism also offers tremendous potential, says Twahirwa. The task now is to make a concerted effort to market the country abroad, something that remains a challenge, given the terrible events of the mid 1990s.

But as he points out: "The country has moved on from that era. Investors who have come to Rwanda are really enthusiastic about the country."

To further promote its tourist sector, a number of formerly State-owned hotels, including Hotel Diplomate (now the Intercontinental), Hotel Izuba on Lake Kivu, and the Hotel Akagera, have been renovated and either privatized or put under private management.

Five regions where significant infrastructure is already in place have been identified as priority areas for tourism investment.

After decades of stifling central planning, followed by the catastrophic genocide, Rwanda is a country that is embracing the private sector with deliberate policies and enormous enthusiasm.

(China Daily 10/13/2006 page17)