This week in London, I was delighted to encounter news of more likely investment in Rwanda’s banking sector by Bob Diamond, the former Barclays Bank chief and Atlas Mara co-founder. As reported on April 28 in London’s daily business paper, CITY A.M, Bob Diamond and his entity Atlas Mara intend to acquire a 45 per cent stake in Banque Populaire du Rwanda (BPR), which operates 191 branches and a 65 per cent share of Rwanda’s banking market for a figure believed to be $22 million. As explained by the paper, the logic behind Diamond’s Rwandan venture is fuelled by the fact that figures released in 2011 indicate that, unlike her sister African nations where on average only 20 per cent of households have access to a savings account, 39.4 per cent of Rwanda’s households have a savings account. This, business analysts believe, presents ample opportunities for investors. However, in one of the paper’s many articles on this investment prospect, online editor Emma Haslett, appeared to question Bob Diamond’s Rwandan venture by casting a dark cloud on what would be of Rwanda beyond 2017. In her article (April 28), Ms Haslett observed that “you only have to look at neighbouring Burundi to see what happens when politicians overstep the mark.” As if this wasn’t reckless enough in terms of comparison analysis, Ms Haslett added that “...his regime (referring to President Kagame) has been heavily criticised for its relentless pursuit of economic growth above everything else. Journalists have been banished from the country, political opponents have disappeared or been found dead. His framed portrait appears above every reception desk. Let’s be honest: that’s a sure-fire sign something’s up.” At this stage, although I had already questioned Ms Haslett’s knowledge of Rwanda’s political stability, all doubt was erased when she concluded that; “It’s Kagame’s stubbornness that provides the most concern for investors in Rwanda. Diamond would do well to beware of this - or come 2017, his shiny new bank could be reduced to rubble.” I know – I know exactly what you are wondering about, I did too! How on earth does Ms Haslett generate this kind of shallow analysis on Rwanda? How well does she know Rwanda’s political environment? And, just how much does she know about the determination resilience of Rwandans not to be pulled back to the dark days? Whatever her case is, I will offer Ms Haslett a brief blind-man’s-guide to Rwanda’s current political stability. By now, it should be obvious that the state of a nation’s political stability is almost certainly one of the major pressing factors every investor must consider before deciding to risk their hard earned cash – borrowed or otherwise. In the same way, I am led to believe that since political instability is an overriding concern for every investor, especially those seeking to venture into uncharted territory, the challenge then becomes that of ascertaining the immediate and long-term political stability of a nation where investment is due to take place. In essence, in spite of the fact that many investors are known to be risk-takers, the vast majority do not invest in nations with unstable and unpredictable political environments, because such environments hinder investment returns and do not allow for long-term planning. Rwanda is no different. In addition, prominent political scientists argue that a nation’s political stability is captured by the ‘perceptions’ of the likelihood that the government will be destabilised or overthrown by unconstitutional or violent means, including politically motivated violence and terrorism. For instance, Parsons argued that if citizens did not view the political system as legitimate, they would be particularly prone to support political protest and other forms of anti-government action. In Rwanda, over the last 21 years nothing of this sort has happened or is predicted to happen partly because of competent efforts to continuously improve the rule of law, democracy, effectiveness of government intervention, fight against corruption, and the attainment of transparency initiatives, to name but a few. On the rule of law, Rwanda has made great strides in taking correct decisions to bring to book those found guilty of breaking the law; due process to enforce transparency is at a commendable stage; and there have been improvements in the appeals process to guarantee the possibilities of appeal, including suing the government where it goes wrong. Also, citizens are encouraged to be active participants and not bystanders so that those in the political arena can be accountable. With regards to improving democracy, Rwanda has made significant progress in holding those in public office to account, in the same way public information is constantly digitalised as a way of improving trust of citizens towards government. Likewise, an equal political system has been developed to facilitate women as equal members of our society. Presently, 64 per cent of parliamentarians in Rwanda are women. In the long run, economic growth and political stability are deeply interconnected. Thus, many believe that, on the one hand, the uncertainty associated with an unstable political environment may reduce investment and the speed of economic development. On the other hand, analysts also agree that poor economic performance may lead to government collapse and political unrest. In Rwanda, neither factor has been at play for the last 21 years as the country has continuously registered economic growth and strengthened political stability. Anything remotely close to what Ms Haslett was implying can only be explained either by her lack of knowledge regarding Rwanda’s political environment or simply by false information political opportunists continue to feed the naïve few out there. junior.mutabazi@yahoo.co.uk
