When it comes to aggressively pursuing a developmental agenda through widespread promotion of private commercial transactions, not many countries in Africa can match Rwanda pound for pound. Since the late 90s Rwanda has been trying to promote her exports, lure direct investment into the country and upgrading its infrastructure.
Most of this hard work has paid off translating into annual economic growth rates of between 5% – 8%. These statistics, though impressive, do not tell the whole story. One must realize that Rwanda has just emerged from ground zero to realize why these rates are this high. At the start of the drive to there were hardly any skilled personnel, there was a miniscule consumer market, no industrial base to speak of and the turmoil of genocide, war and mass displacement had made sure that even agriculture, the country’s mainstay, had been brought down to its knees.
Fourteen years later, there has been marked improvement in all sectors. There, however, remains one barrier to a rapidly growing and well regulated business atmosphere. The legal framework of business is still in large sections hopelessly antiquated if not totally silent on the newer forms of commercial transactions coming up in Rwanda like e-commerce and capital markets.
In the defense of the Rwandese legislator, he/she had to deal with legislation that concerned itself with basic needs of the average citizen when he/she was not instituting the basic pillars of a functioning state. Complex business rules and their attending regulatory bodies have not featured very highly until quite recently. The Ministry of Justice in December 2005 released a report on the state of Rwanda’s business regulatory framework (available on www.minijust.gov.rw ), the good news was not to be found in the findings of the report but perhaps in the fact that the Ministry had highlighted many of the deficiencies of the law as it regards business.
With the hosting of the recent ‘Connect Africa’ summit and the continuous promotion of ICT as a way of driving Rwanda into a knowledge-based economy, it is surprising to note that e-commerce does not have any regulations controlling it in Rwanda. The stock exchange operates without any oversight or concrete rules, leaving things up to the integrity of the individual traders. In fact it might be safe to say that the most developed business laws are those dealing with taxation as well as investment and export promotion.
On the upside, the draft law governing the Penal Code appears to deal with the more advanced forms of theft and fraud and the repressive mechanism appears to have gone ahead of the business framework in this case. Since there exists a Business Law Reform Cell in the Ministry of Justice to study the deficiencies of the legislation on business and make recommendations to the Parliament, at least there seems to be some awareness of the problem on the part of the authorities. The main question will be how fast reforms can be made and their relevance in a growing commercial sector. Will the body be able to keep up with the spirit in this case or will it be more of the usual?
Filed under: BUSINESS & LAW |