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Towards a Robust Economy: Public - Private Sector Alliance

> 20 January 2015

By 2020, Rwanda should have attained an average annual economic growth rate of 11.5%, created 200,000 off farm jobs, increased exports to a tune of 28% per year and boosted house hold per capita incomes to 1240 dollars .

And for this dream to become a reality, the private sector will have to take the driver’s seat while government takes on the facilitation role hence the need for a structured Public -Private Sector Dialogue.

(PPD) Being able to establish a robust and active PPD is a key advocacy tool in any highly functioning economy. Francois Kanimba, Minister for Trade and Industry, is among those who believe that for the country to attain a strong economy, both government and the private sector must work together, dialogue, listen to each other and most importantly partner to fast track economic development.

According to David Primack, an economist and Executive Director for the International Lawyers and Economists Against Poverty (ILEAP), PPD dialogue is fundamental for any modern economy.

“It’s a fundamental tool in the tool box, for government to engage the private sector so that they are able to identify those areas where they can partner and work together but most importantly work towards addressing those constraints that are acting as impediments to the progress of the private sector.”

Many analysts believe that through PPDs, government will be able to understand the kind of incentives to offer to the private sector.

“Incentives require government to create and embrace public private dialogue eco systems aimed at promoting efficiency and transparency in the implementation of investment projects,” James Cercone, President and Founder, Sanigest International, said.

“How you marry government’s needs with private sector needs which take the majority of the risk in anticipation of a greater return is critical for Rwanda’s development,” he added.

Steve Mutabazi, chairman Africa Olleh Services is of the opinion that the government must think like a private investor to fast track economic development. “You don’t simply give incentives and stop there. However, by thinking like an investor you will be able to fully appreciate what it is that investors want,” Mutabazi noted.

Prior attempts to launch a unified PPD in Rwanda have had mixed reactions with challenges but for which the Rwanda Development Board (RDB) is tirelessly engaged in seeking solutions.

Through their umbrella, the Private Sector Federation (PSF) as a medium of advocacy, PPD has been given the priority as a key ingredient and the only way both government and the private sector can partner to fast track economic development.

It is through this PPD structure that has made it easy for RDB to coordinate issues among the public stakeholders, while PSF concentrates on the private sector content.

The role of RDB and Government

Because of the potential and the confidence government has seen in its private sector, RDB has come up with a more inclusive, well streamlined and coordinated new public private sector dialogue structure.

Mr. Francis Gatare - CEO OF RDB

This structure, according to Francis Gatare, the Rwanda Development Board’s Chief Executive Officer, will not only help streamline PPD but also make it more responsive and action- orientated so that it creates a robust impact on the country’s economic growth. According to Mr. Gatare, the Government of Rwanda has come up with a number of initiatives such as the Economic Development and Poverty Reduction Strategy, the Private Public Dialogue mechanism and through strengthening higher learning institutions and human capacity to support the country’s economic agenda.

Daniel Nkubito, RDB’s Expert on Public Private Dialogue

Daniel Nkubito, RDB’s Expert on Public Private Dialogue says there is evidence that through the joint Secretariat, the new structure is proving to be an effective mechanism in terms of influencing decision making, coordinating research and most importantly availing a platform that is well designed that will push stakeholders towards successful outcomes.

Today, the government through its planning process has initiated the budgetary process in consultation with the Private Sector where the challenges and needs are highlighted beforehand such that the planning process can respond to the needs of the versatile business atmosphere as opposed to the previous one- sided planning approach that was not reflecting the other side’s interest.

This structure addresses a major challenge of PPDs - the lack of consistent organizational leadership, which makes it suitable for both the public and private sectors to dialogue in detail, based on co- chair and co- share principles.

The Joint Secretariat – the PPD hub

The Joint Secretariat – the PPD hub The hub aims at consolidating many of the functions of the initial structures to ensure efficiency and transparency. It is envisaged that getting both PSF and RDB on the same table will also help leverage on the opportunities especially in areas of research and advocacy, according to Gerald Mukubu, the Acting Chief Executive Officer, PSF.

PPD Structures and Plat forms

To reduce the Joint PPD Secretariat burden, some issues can be channeled through the PSF employee in Linking Farmers to Market (LIFAM), the newly elected PSF President at the district level and a woman entrepreneur who operates business in the district. On the side of the public, there is the Joint Action Development Forums Permanent Secretary who looks after the interest of district development plans of all the constituencies including the District Investment and Cooperatives Office and the Business Development Employment.

To increase efficiency, the structure is organized in such a way that issues will be addressed at the local level through PSF local strategies and district local authorities.

However, if inadequately addressed, the issues will be channeled to the RPPD Secretariat for consideration. The Secretariat may support the local level PPD in various ways or consider the issue for the High Level PPD Platform decision.

Hon. Vincent Biruta - Minister of Natural Resources

The new structure allows the secretariat and Joint Advisory Board made of RDB and PSF CEOs to manage and reserve those issues that require national attention that were not resolved by the primary RPPD organs for presentation at the PPD Summit.

Achievements so far

According to official statistics, through intensive dialogue and lobbying, PSF has been able to register incredible achievements.

From the benefits of the implementation of the single customs territory which is saving up to $25million to the scrapping of VAT (18) on international calls , it clear that no one can underestimate the power of public private sector dialogues.

Through PPDs, government has scrapped off VAT on service exports, removed import duty on vehicles (buses, and coasters), established district forums, with the inclusion of the PSF president in District Councilors Committees, repaid the late payments arrears to the entrepreneurs and removed 5% import duty on imported trucks among many other achievements.

Published by The Diva magazine 2015