Rwanda's operational efficiency charms President
PRESIDENT Mnangagwa yesterday said he was charmed by the efficient governance systems in Rwanda, including the excellent performance of its highly organised young chief executives.
He said this at a meeting in Harare where Rwandan governance expert Ms Clare Akamanzi addressed Cabinet Ministers, Politburo members, senior Government officials and members of the private sector.
Vice President Constantino Chiwenga and Chief Secretary to the Office of the President and Cabinet Dr Misheck Sibanda and his deputies were also in attendance.
Ms Akamanzi, who is the Rwandan Development Board (RDB) chief executive officer, was accompanied by RDB chief operations officer, Mr Emmanuel Hategeka.
The two shared their experiences on how Rwanda managed to improve the ease of doing business and economic performance after emerging from the genocide on minority Tutsis of 1994.
President Mnangagwa said he was smitten by Rwanda’s way of doing business when he went to the east African nation for an African Union (AU) summit last month.
“During my visit to Rwanda, I was impressed. I met the CEOs of Rwanda and hardly anybody was above 50; very young. I did not know why, and President Paul Kagame explained to me. We then agreed that a team be sent here to share with us their experiences,” President Mnangagwa told his audience yesterday.
“Rwanda is not as gifted as Zimbabwe in terms of resources and is 15 times smaller than Zimbabwe in size, but the manner in which they are organised is a marvel.
“I felt it was necessary for you my colleagues to be exposed to Kigali and I asked President Kagame to send us his team,” he said.
“I have no doubt a majority of us will appreciate what Rwanda has achieved, especially in the manner they process investment. It’s like a machine. Here we do not even know when an investor comes or where he will stay and he may spend three weeks moving from one ministry to another. If the minister is out, the investor may wait for him to come back; it’s absolutely unnecessary.
“Systems must continue to function and this is what we want to achieve,” he said.
Ms Akamanzi said their invitation by the Zimbabwean Government showed the country was keen to follow through on its
need will be housed. I think the Chief Secretary (to the President and Cabinet Dr Misheck Sibanda) has said a decision has already been made to merge three organisations- Zimbabwe Investment Authority, ZimTrade and the Joint Venture Unit in the Ministry of Finance. Once you create an organisation like that, how do you empower that organisation to really deliver the mandate that we need? A third one is how do we bring service delivery that has guarantees of time to the investor. To us, it was an issue of building client charters as I have pointed above. Every service has a client charter. All the list of services we give have published client charters that have time and guarantees and that also goes to say if they do not get it within a given period of time what happens, where do they get redress. Political will, which President Mnangagwa has already shown, is crucial for this one-stop shop to be successful. Without political will there will be a lot of interference from other sectors that can contribute to the failure of such an organisation. In our case there is no going through another ministry to reach Cabinet or the President. LC: What are Rwanda’s selling points to investors?
CN: The key selling point for Rwanda in terms of when we are talking to investors, the first one is we share how our economy has been growing in a sustainable and consistent way at a high rate. Growing between seven to eight percent for 15 years is really confidence to investors that this country is always going to be growing and an investor wants to put money where they know that there is going to be growth because they want to grow with the country. I think that is the first thing we tell them. But related to that, we also show them the other economic indicators. If you look at our inflation, our inflation has always been very low, always below six percent and definitely we try not to go beyond double digits. Again, the reforms around monetary policy, we have a free floating currency. We have a very stable currency. If you look at how our currency, the range around the dollar, the appreciation for a very long time has never been more than five percent. So, those economic fundamentals are what we tell the investors to begin with. The second part we tell them is the business environment. You can register your business within six hours, you can get your operating licence, your construction permit in just two weeks. If you go to court and you have a case within 100 days you hear judgment from our courts. So, we share the business environment, the best practices that we have and that the investors support. The third component we tell investors is governance. Rwanda prioritises governance. We have made sure that there is zero tolerance for corruption. We tell them that the cost of doing business is really what it is; what we tell you. There are no other hidden costs from what you see and what we tell you. And they like that as well, they like to know there is good governance because governance assures long-term security not only of themselves, but also security of their investments for a very long time. Of course, the fourth component we tell them is that Rwanda doesn’t look at itself alone; we look at ourselves as part of the East African Community. So, the market you are looking at, even though we have two million people in Rwanda, we tell investors that remember that we are part of the almost 200 million population around the East African Community including our neighbouring countries. Of course, we share with them specific opportunities. We go into details. We tell them where they can put money and we even do a lot of feasibility studies where we can on specific projects. That’s in a nutshell how we sell our country. LC: What measures on accountability and coordination have you put in place to ensure that you change the mindset of officials and the people for them to move along with the vision of President Kagame? CN: For Rwanda, two cross-cutting elements of our leadership, President Kagame, our President, has been consistent about demonstrating two major cross-cutting elements of leadership and I think one of them is accountability. It’s really sharing a vision with the people, the people being part of that vision. And also reporting back to the people through different fora. We have the national dialogue where the President chairs meetings and citizens participate in those meetings. Citizens give feedback to government on what they see and how they feel about the governance. That really makes the leadership very much in sync with the people. The second component is ensuring that the development of the leadership is inclusive. So, accountability and inclusiveness, very key cross-cutting elements. Inclusiveness just means the structures of government are very much decentralised. We have every small unit of decentralisation. We have a leader that coordinates the people in that village so that they give input to policies and programmes and then it goes up to the President who gets feedback from the people. We have a national forum in place like the national leadership retreat where leaders sit every year to review how performance has been done. We sign performance contracts. So, all these support accountability to the people, but it also helps inclusiveness because people can directly point out issues they want government to focus on. Also on accountability, building institutions that work. We have governance institutions and rules like every year you have to declare your assets to the Ombudsman and the Ombudsman monitors your assets. If there is something unusual in how your assets are moving, it can create interest. I have talked about performance contracts, but we also have institutions like the Auditor-General that fight mismanagement of resources. Most importantly, our President has been consistent about ensuring these institutions actually work. These institutions support the vision that he has and the Rwandans have accepted to be part of the future. LC: Let’s also talk about technology. How have you managed to harness technological platforms to make it easy for investors to do business in Rwanda? CN: Automation has been extremely important, one of the biggest programmes that President Kagame put in place, and I think this has been recognised in many ways. President Kagame is the chair of the UN International Telecommunications Union (ITU) Broadband Commission. He is also part of a lot of ICT programmes even in the World Economic Forum as a leader. The reason for all this is because President Kagame has made it his priority, has made ICT his priority at that level. We started by investing a lot of money in putting in place the infrastructure that is needed. We have fibre optic and broadband infrastructure deployed all over the country. We have a national data centre that is a high level one. We have institutions like Kigali Science and Technology Institute, we have Carnegie Mellon University that we attracted from the US to set up a campus in Rwanda. All these big reforms require a high level of political attention at the presidential level and President Kagame has been very much an instrument driving this. That translated into the use, because you can put in infrastructure, good schools and education, but you need to use them. So, we automated all the key services that government uses. In the Rwanda Development Board we automated applications, if you want to apply to set up a company we link you to the national ID system, we link you to the tax system so you don’t have to go there, we link you to the social security system. So, you simultaneously register your company, at the same time you get your social security, at the same time all the tax administration happens. We also have something called Rwanda Online, which is a system built by one of our local companies to provide all citizens with services online. That includes applying for national ID, applying for birth certificate, death certificate, all the key services that government gives are in one platform. Which is very important because we have this one platform instead of each institution developing its own platform. LC: In terms of incentives to investors, how do you offer them? Do you have a law which governs that or you just consider each case as it comes? CN: We have had three alterations of our investment law because we keep learning and adjusting. The most recent investment law codifies the different types of incentives to make them standard. When you have a single law governing incentives, it’s easy to implement because it doesn’t leave someone from customs and someone from the development board to interpret because it’s a standard law. Some of the incentives we give are a seven-year tax holiday for investors who invest more than $50 million, a reduction of corporate income tax from 30 to 15 percent if you are export at least half of what you produce and if you are in a strategic sector, such as ICT, manufacturing, value addition, transportation and any other sector that we give priority to. Of course, there are other incentives we give. If you bring you headquarters to Rwanda, it’s zero percent corporate income tax.