Update on Rwanda's privatization campaign

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Rwanda's privatization drive of the last decade is showing signs of success. From an FT article:

  • Telecommunications. After the October 2005 sale of the state telecom to Terracom for $20m, high-speed internet connections are up, hundreds of miles of fiber-optic cable have been laid, and connection prices are 10% of 2003 prices. All this helps Rwanda in its battle with Kenya and Tanzania as the technology hub for East Africa.
  • Banking. The Banque Commerciale du Rwanda was no longer lending in 2003, but thanks to a $6m deal with Actis, it's now the country's second largest commercial bank.

Unfortunately, the energy sector's key privatization, of Electrogaz, has been a failure by virtually any account.

Privatization has fallen out of favor among many politicians, but Rwanda illustrates the benefits it can bring. In particular, the deals above increased government revenue and freed up resources. BUT much more importantly, the private sector firms made huge investments of capital and technical know-how that directly benefit Rwandan customers.

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