MANASSÉ TWAHIRWA Executive Secretary of the Privatisation Secretariat

Since 1996, Rwanda has been carrying out one of Africa’s most ambitious privatization programs, selling off state-owned companies in an attempt to create a dynamic, export-oriented economy driven by free enterprise.

The government has been systematically making way for the private sector in strategic areas ranging from banking and telecommunications to tea production and tourism. Since the program started, more than 50 percent of state companies have been divested.

“We started in 1996 with a list of 70 enterprises, but since then it has continued to grow,” says Manassé Twahirwa, Executive Secretary of the Privatization Secretariat. “There are currently 77 enterprises on our list, and we have already privatized about 50.”

The most recent candidates lining up to be freed from state control include tea factories and plantations, rice mills, the coffee exporter Rwandex, the hotel company Soprotel, the pharmaceutical firm Labophar, and the schoolbook printer Imprisco.

Privatization generates revenue for the government from the sale of enterprises and lightens its financial and administrative burden. More importantly, it creates the ideal conditions for the restructuring and rehabilitation of public companies, which allows the economy to take off. This encourages both foreign companies and Rwandan citizens to invest in the country’s future.

A prime example is the privatization of the state telecommunications giant Rwandatel. In October, the government transferred 99 percent of its shares in the company to the U.S.-based ICT firm Terracom, following the signing of a $20 million deal in June. The government sees the move as an important step in driving Rwanda towards becoming a knowledge-based economy.

Tea plantations are among the state enterprises waiting to be transferred into private hands.

“Many people asked why we were privatizing Rwandatel,” says Mr. Twahirwa. “They did not understand that, despite having a monopoly, the company was having problems with growth. The government made a choice that was both economic and political. The offer that we accepted is the one that gives the best guarantees for continued technological development and for keeping prices down.”

Bart Gasana, Executive Secretary of the Private Sector Federation, says support and institutional capacity building are required to give the private sector the maturity it needs to function as the economy’s engine.

“It is still not as strong as we would like, but the public-private partnership of the government and the Private Sector Federation have laid out strategies that will help us achieve private sector-led growth.”