A new draft law governing privatisation will help Rwanda to achieve a private sector-led economy, in line with its vision, the Minister of State in charge of Public Investment and Resource Mobilization, Jeanine Munyeshuli, has said.

She made the observation on October 12 while justifying the basis of the bill before the plenary sitting of the lower chamber of Parliament.

The Lower House approved the relevance of the bill, and it will be scrutinised by a relevant parliamentary committee prior to a vote at the plenary level.

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According to an explanatory note of the bill, the Government of Rwanda seeks to attract competent national and international investors to participate in the management of State-owned Enterprises and transform the economy, with a focus on increasing Private Sector investments across priority areas in which the government has been the key or sole player over the past decades.

Munyeshuri told lawmakers that the existing law governing privatisation was enacted in 1996, and since then, there have been advancements in both public and private investments.

Some public investments, she said, have already served the intention that they were made for, while in some other sectors, private investors have developed capacity to the extent that they can venture into them.

"Considering the progress made in different sectors, there is a need to review the existing law of 1996 [to align it with the new developments and the vision of the country],” she said.

"We need to have a strong private sector. That is the target under Vision 2050,” she observed.

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Rwanda, she pointed out, is a country that endeavours to build an economy based on the private sector.

"The enactment of a new law governing privatisation will fast-track the agenda for a private sector-based economic growth, rather than the government being the largest player in investment activities,” she said.

"New changes in the bill will help to ensure efficiency along the process of privatising State assets and improve the productivity of public resources,” she said.

Some of the new proposed changes in the bill

Underscoring the need for the law review, Munyeshuli said that the existing law has many gaps including the fact that it does not indicate the modalities for privatisation, and the role of the government’s post-privatisation.

Among other new changes, the bill provides for the establishment of a committee in charge of privatisation and its responsibilities.

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It also provides for a transaction team that is composed of members representing institutions – appearing in the committee overseeing privatisation – who have the required skills that can facilitate privatisation.

Again, the draft law gives conditions under which a State-owned company and shares owned by the State shall be privatised.

A pre-privatisation aspect was also considered in the bill, including activities that must be carried out before entering into privatisation. Among others, there is legal audit, financial audit, valuation, and pre-privatisation restructuring.

Munyeshuri indicated that the review of the existing law is an occasion to consider appropriate privatization ways, and setting mechanisms for monitoring whether public interests are protected.