Rwanda’s new law on competition and consumer protection has introduced provisions aimed at ensuring that public subsidies are transparent, justified, and do not unfairly distort market competition.
Gazetted on March 4, the law establishes a framework for assessing government support granted to businesses, particularly in sectors where such assistance could affect fair competition.
In an interview with The New Times, the Minister of Trade and Industry, Prudence Sebahizi, said that while government support remains an important tool for economic development, it can distort competition if not properly managed.
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"In Rwanda, the government may support priority sectors such as agriculture, manufacturing, infrastructure, and export promotion through financial incentives, concessional financing, or other forms of support,” he said.
"These interventions are often necessary to promote industrialisation, job creation, and economic transformation.”
Sebahizi noted that the new law introduces a mechanism to ensure that such support does not undermine fair competition in the market.
Under the law, the Regulatory Authority may assess whether a state subsidy could significantly affect competition in the Rwandan market, or any part of it, and issue advice accordingly.
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However, the minister clarified that not all subsidies will be reviewed.
"It is important to note that not all subsidies will be subject to assessment. The review will focus only on subsidies that are likely to significantly affect competition in the market,” he said.
To ensure clarity and proportionality, the Regulatory Authority will establish a financial threshold. Only subsidies whose total value equals or exceeds the prescribed threshold will be subject to assessment and advice by the Authority.
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"This approach ensures that regulatory oversight focuses on subsidies that may have a material impact on market competition, while avoiding unnecessary review of smaller support measures that are unlikely to distort the market,” Sebahizi explained.
Concerns may arise, he added, when government support benefits specific companies operating in competitive sectors or when incentives allow some firms to sell products at significantly lower prices than their competitors in the domestic market.
If such subsidies are not assessed, they could distort competition among firms operating in Rwanda, discourage private investment in certain sectors, allow inefficient companies to remain in the market due to artificial advantages, and affect Rwanda’s compliance with regional competition rules.
Sebahizi emphasised that the objective of the provision is not to halt government support but to ensure fairness and transparency.
"The purpose of the provision is not to prevent government support, but to ensure that public subsidies are transparent, justified, and do not unfairly distort competition,” he said.
He added that the approach aligns with regional competition frameworks under the East African Community and the Common Market for Eastern and Southern Africa, which require member states to monitor state subsidies that could distort competition within regional markets.
Private sector calls for balanced implementation
From the private sector’s perspective, William Buningwire, Acting Spokesperson of the Private Sector Federation (PSF), said the provision allowing the Regulatory Authority to assess subsidies likely to affect competition is understood as part of broader efforts to ensure a level playing field.
"If implemented in a balanced and predictable manner, such oversight can help promote fair competition, encourage efficiency among firms, and enhance investor confidence in the market,” he said.
However, Buningwire stressed that implementation should remain transparent and consultative, taking into account the role targeted government support plays in nurturing emerging sectors and enabling businesses to scale and compete regionally and globally.
"PSF looks forward to continued dialogue with the relevant institutions to ensure that the implementation of the law supports both healthy competition and sustained economic growth,” he said.