By: Dr David Himbara
Of the three forms of corruption, namely, bribery, embezzlement and state capture, the Rwandan strongman General Paul Kagame has excelled at state capture. State capture occurs when the ruling elite and powerful business interests manipulate policy to their own advantage. In Rwanda’s version of state capture, Kagame builds his ruling party businesses with Rwanda’s pension fund. To ensure total control of the pension fund, Kagame appoints either a relative or a business crony chairman of the directors of board. Kagame has changed tactics. He has installed a foreign national not only in the position of the pension fund’s chairman but also in the position of deputy director general in charge of funds management.
Corruption is generally two main forms. The first and commonest form is bribery also known as administrative or petty corruption. The second form is embezzlement or plundering of public monies also known as grand corruption which also includes bribes paid at higher levels within public services. The less known but most devastating form of corruption is state capture. State capture occurs when the ruling elite and powerful business interests manipulate policy formation and influence laws and economic regulations to their own advantage. In this third form of corruption, the collusion between powerful government officials and private firms extract substantial private gains from the absence of clear rule of law.
The Rwandan strongman General Paul Kagame captured the state by playing two roles. He is the head of state and chairman of the ruling party, the Rwandan Patriotic Front (RPF) which owns the largest business empire in Rwanda – the US$500 million Crystal Ventures Ltd (CVL). Now, to build CVL companies, Kagame captured Rwanda’s pension money. The pension fund financed 40 percent of CVL’s Inyange Industries Ltd; 50 percent of CVL’s East African Granite Industries; and 30 percent of CVL’s Crystal Telecom Ltd.
To maximize state capture of the pension fund, Kagame directly controls the Chairman of RSSB. Previously, the Chairman of RSSB was Kagame’s brother-in-law, Innocent Gakwaya. When Gakwaya died, Kagame installed Ephraim Turahirwa into the chair. Turahirwa is the ruling party’s moneyman who used to head Tristar which was later rebranded as CVL. Now, Kagame has installed foreign nationals in two key RSSB positions. The chairman of the board of directors is Christopher John Wales. In charge of funds management is Philippe Watrin. Stay tuned.