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By: Dr David Himbara
Rwanda’s ruling party newspaper, The New Times declared that ConsTruck Ltd, a subsidiary of NPD Ltd is ready to construct 57 new roads in the Rwandan capital city of Kigali. Covering an area of 215.6km, the construction will take four years to complete. ConsTruck Ltd and its parent company, NPD Ltd, are part of Crystal Ventures Ltd, the US$500 million business empire of General Paul Kagame’s ruling party, the Rwandan Patriotic Front (RPF). This is state capture. Kagame the head of the Rwandan state is doing business with Kagame, the Chairman of RPF and its business empire, Crystal Ventures Ltd.
In countries where the rule of law operates, there must always be a distance between governments and private sector companies. It is a cardinal rule that governments keep private sector companies at arm’s length to ensure that there is no conflict of interests. A public office holder is in a conflict of interest when she or he exercises official powers that provide opportunities to further her or his private interests. Indeed, the concept of conflict of interest rests on private interests. “Furthering a private interest” includes actions that result in an increase or in the preservation of the value of private assets.
What we see in Rwanda is state capture, the extreme opposite of keeping an arm’s length relationship between governments and private sector companies. Special thanks to Joel S. Hellman, Geraint Jones, and Daniel Kaufmann, who pioneered the study of state capture. In their work entitled, Seize the State, Seize the Day: State Capture, Corruption, and Influence in Transition, they explained state capture as the ability of business elites to shape the laws, policies, and regulations of the state to their own advantage. Put another way, in a captured state, business oligarchs corruptly accumulate wealth because the government itself an oligarchy. Very simply, state capture is a government with despotic powers that shapes laws and policies to advance and protect their private interests.
ConsTruck Limited, its parent company NPD Limited, and the holding company, Crystal Venture Ltd, are laughing all the way to the bank, thanks to Kagame’s capture of the Rwandan state. The question is – why would 215.6km of roads take four years to complete? That means ConsTruck will build 53.9km of roads per year. Wonders never cease in Kagame’s Rwanda.
Stay tuned.
