Rwanda passes new policy on privatization

Rwanda has recently made significant strides in its privatization efforts with the approval of a new policy and strategy aimed at enhancing the process of privatizing state-owned enterprises. The Cabinet's approval of the new Privatization Policy and Strategy reflects the government's commitment to addressing challenges observed in previous privatization endeavors. To shed light on these developments, CNBC Africa engaged in a discussion with Celestine Rwabukumba, the CEO of the Rwanda Stock Exchange. Rwabukumba highlighted the historical context of privatization in Rwanda, dating back over 20 years, with the first round of privatization initiated in 1996, just three years after the genocide. The privatization process has evolved over the years, with approximately 104 companies privatized by 2007 using various methods to attract interested parties and strategic investors. The recent passage of the new policy by the Cabinet, in collaboration with the Rwanda Development Board and relevant ministries, signifies a proactive approach to reevaluating past shortcomings and enhancing future privatization initiatives. The updated policy incorporates lessons learned from previous privatization attempts, addressing gaps in the process and introducing new avenues for privatizing state assets. By leveraging frameworks such as public-private partnerships (PPPs) and capital market privatization, the government aims to streamline the privatization process and enhance private sector participation in managing public assets. The inclusion of PPPs in the new policy is crucial, as it enables the government to engage in partnerships with private investors to drive economic growth and foster a conducive business environment. Moreover, capital market privatization, which mandates the allocation of at least 30% of shares to the general public, promotes wider ownership of state-owned enterprises while stimulating market activity and encouraging public participation in the economy. Through these strategic initiatives, Rwanda seeks to optimize its privatization efforts in line with economic development goals. Despite past challenges and discrepancies in privatization outcomes, the government remains committed to refining the process and fostering sustainable economic growth through effective asset management. By entrusting private sector entities and investors with the responsibility of managing state assets, Rwanda aims to enhance operational efficiency and competitiveness in key industries, ultimately driving economic progress and reducing inefficiencies. Overall, the approval of the new Privatization Policy and Strategy marks a significant step forward in Rwanda's economic transformation journey, setting the stage for enhanced private sector participation, increased market activity, and sustainable economic development.