Honour and pride as Rwanda wins big

In 2007 the World Bank, in its annual Doing Business Index placed Rwanda 158 among 175 countries worldwide in attracting entrepreneurs. Conferences were called, workshops and retreats were held. Something had to be done to improve this bad position. How can we be close to the last? The last being the likes of Zimbabwe, Somalia, and Iraq etc. 

In 2007 the World Bank, in its annual Doing Business Index placed Rwanda 158 among 175 countries worldwide in attracting entrepreneurs.

Conferences were called, workshops and retreats were held. Something had to be done to improve this bad position. How can we be close to the last? The last being the likes of Zimbabwe, Somalia, and Iraq etc.

How can we perform so well in the tourism festival in Berlin, and fail in our backyard in encouraging entrepreneurs to start and develop businesses?

At that time the government called anyone with some business knowledge to policy round tables. Whoever thought there was no democracy in the country at the time, would have noted these brains-storming sessions.

The Strategy and Policy office in the Presidency, took on a major role and even if he worked behind curtains, Dr. David Himbara increasingly became a major figure in the country at the time.

The Rwanda Investment and Export Promotion agency also took centre stage. Note that the Private Sector Federation re-branded but remained largely a lobby organization.

The other two offices embarked on a vigorous PR campaign targeting the local media and later regional media houses. Crucially Tony Blair-he needs no introduction- was on board too.

The following year Rwanda was ranked 139, I remember about the same-time covering an event at Hotel Umubano where a certain Nkurunziza, who was heading one of the business improving agencies in the country, said some unflattering things and soon lost his job in the reshuffles that followed that meeting.

About the same-time, the RPSF-Rwanda Private Sector Federation- also took note of the winds of change and came on board.

The first activity was meeting, President Paul Kagame, and address with him the issues deterring investments in the country.

Its head Robert Bayigamba, said the high cost of transporting goods and services to the Rwandan market along with the absence of an effective tax rate, were some of the issues that had to be dealt with effectively if Rwanda was to attract more investments.

(Although soon afterwards, at a conference called by the RRA, some of the leading accountants in the revenue agency said they did not understand the tax system in the country.)

But perhaps due to this meeting Kenyan firms started arriving in Kigali as did Nigerian Banks.

The government then opened a training institute in Butare where RRA tax collectors could be trained on basic tax systems in Rwanda, how to collect the taxes and more importantly, how to make these collections useful in the development of the country.

The tax collectors after learning from the institute came back to Kigali and utilized their lessons very well, and tax collection in the country increased considerably to Rwf 566.2 billion.

The only hitch being that some of the tax collectors having collected this sum were jealous to hand it all to government, and so they diverted some of it to building villas in Nyarutarama and Kibagabaga. Ever alert, the investigators caught up with some and they were sent to the ‘commune.’

Characteristically cautious, Kagame formed a special unit in his office to advise him on how to attract investments to the country.

The Doing Business in Rwanda task force, began work in December 2007,  and within nine months, had identified and successfully implemented 15 investment climate improvements, most of which were captured in the 2008 survey causing Rwanda to move several notches up from 158 to 139.

These included; reduced cost of port and terminal handling by liberalizing the warehouse services sector, and new customs declaration points which helped to accelerate trade. Furthermore, decentralisation sped the issuance of building permits.

The task force came into force at about the same time that the Ministry of Finance and Economic Development, along with the Rwandan country office of the World Bank, hired The Policy Practice, a savvy consultancy firm from the US.

It was to advise economic policy makers on business reforms to improve local private investments.

These reforms, included starting a professional framework for employees and employers in the formal sector, like regulating or establishing working hours, (although this was kept only on paper) and advising the government to lobby for increased working hours at all boarder points in Kenya, Uganda and the sea port of Mombasa.

As a result all terminal points started 24 hour shifts. Exports and imports, increased and reforms in the land and agriculture sector were also undertaken.

The multi frontal strategy to improve business in the country especially targeted improving the lagging service sector, and as a result performance contracts were established for local government authorities and enforced albeit dramatically.

They were to be calculated in percentages. The ICT philosophy also became ingrained in the now famous Vision 2020 ideology.

Not to be outdone the RPSF hired a South African research organization, to advise on how to be more efficient in service delivery to Rwandan investors, and also how to draft reports to their appointing authority.

In the process, the amount of money spent on consultancy in the country totaled to Rwf 80 billion with a large percentage of that going to foreigners!

Recently, as the Immigration officials lined up at the airport to receive Anaclet Kalibata, carrying the latest award in good institutional management, thanks to the good work of the commission he heads, there was a major feeling of satisfaction and pride.

It was the same case with President Kagame’s return from the Former US President Bill Clinton’s Global Initiative, about the same-time as he was awarded for his commitment to good leadership.

donuwagiwabo@gmail.com

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