A combination of PPPs and public offering is the way to go

Government is currently implementing a long-term privatisation programme that will possibly boost private sector growth and economic development. With the increasing demand for privatisation, which is also a requirement by the World Bank and International Monetary Fund (IMF), Rwanda faces a number of options through which to disinvest from state owned enterprises and public services. And yet privatisation has become a necessity, the approach used will determine its success. The options available include; privatisation by trade sale or public offering, contracting out, use of voluntary agencies, Public-Private Partnerships (PPPs). For purposes of financing public service infrastructure and innovative forms of ownership, it is better to opt for then PPPs. With the current huge deficit between infrastructure needs and the resources availed by government to finance this deficit, PPPs are the best option. The business community requires good roads, bridges, well maintained transit systems, well functioning ICT infrastructure, as well schools and institutions that produce competent labour force etc. And the private sector can play a crucial role in financing, designing, construction, and operation of infrastructure projects but only if it these projects can generate profit. Yet any approach will involve tradeoffs. Government needs to consider privatisation of its parastals through public offering. Since publicly traded companies are obliged to disclose all the information related to the company, this approach is favoured because it promotes efficiency through transparency. It also promotes capital markets development. Experts say that the sale of government companies through the capital market generates revenues, gives shareholders control over managers, and provides access to capital. It should however be noted that a combination of both PPPs and public offering can be used in order to promote equity and efficiency, but also at the same time allowing widespread public participation. Ends