Kigali — The government made a minimum of Rwf 75 billion over the sale of several state own institutions as part of its privatisation process; the Minister for Finance and Economic Planning, John Rwangombwa, has revealed.
Rwangombwa told members of the Senate yesterday that initially, the government's plan was to sell 94 of its companies, but some were subsequently scrapped off the list.
"10 of them were later scrapped off the list, seven liquidated and 56 sold off. Right now, 19 institutions are up for sale," he said
Rwangombwa was appearing in the Senate to answer queries raised by the Senate on several issues related to privatisation.
Upon mentioning the billions, Senator Antoine Mugesera inquired from the Minister how the government was investing or spending that money.
"You have mentioned that the government made Rwf 75 billion from privatisation but how do you use the money? How is it invested," he asked
Rwangombwa explained that the money is used in various developmental projects, citing the funding of the national budget and the fibre optics project made possible from the sale of Terracom, currently renamed Rwandatel.
Senator Stéphanie Mukantagara requested Rwangombwa to explain why some companies that were originally up for sale were scrapped off the list.
"We have been told that they were up for privatisation but were taken off the list. Why were they taken off the list," she asked
Rwangombwa explained that the government later realised on that some of them were so bankrupt that there were no prospective investors thus the liquidation.
He further explained that the others were repossessed by the government due to their location which was determined by authorities as harmful to the environment.
Senator Henriette Umulisa also asked the minister to explain why some of the companies came to invest in Rwanda and failed and yet they were successful in other countries.
"Mine is a question asked out of curiosity. Some of the companies that failed in Rwanda; for example Intercontinental and Terracom, are famous due to their success in other countries. Has there been any inquiry in why they fail in our country?" she asked
Rwangombwa explained that indeed some of these countries were successful elsewhere and linked their failure in Rwanda to 'mismanagement'.
"You are right. Some of these companies are successful elsewhere but when they come here, they do not realise how much we have invested in these companies.
"Actually, you can tell from the companies we have repossessed and resold to other investors. They are doing so well, a good example being Rwandatel," he said
Rwangombwa said that in previous years, the government was focused on selling and there no proper follow-ups, but a department to monitor and evaluate the performance of privatised companies had been set up in the Rwanda Development Board (RDB).