Kagame Should Explain to Parliament how he Turned Rwanda’s Pension Fund into a Cash Cow for his Ruling Party’s Businesses

By David Himbara

In South Africa, former president of Jacob Zuma is in prison for refusing to answer questions of state capture that led to mega corruption during his presidency. In Rwanda, state capture has turned the pension money into the cash ruling party businesses. In Rwanda, state capture is the new normal.

General Paul Kagame launching Inyange Industries’ factory on the outskirts of Kigali on March 1, 2010

Parliament is currently looking into the losses of the Rwanda Social Security Board (RSSB) and the poor returns on its investment in foreign and domestic businesses. We has shown how General Paul Kagame poured US$22 million into Merrimack Pharmaceuticals, an American company that is on the verge of collapse. Domestically, Kagame turned the pension money into a cash cow for Crystal Ventures Ltd and its subsidiaries. This is the US$500 million business empire of the ruling party, the Rwandan Patriotic Front (RPF) led by Kagame. In a normal country, this would be illegal and severe conflict of interest. Kagame the president of the country uses public money to finance the businesses belonging to Kagame and his ruling party’s businesses. This is what is known as state capture. State capture occurs when the ruling elite and/or powerful businessmen manipulate policy and influence to their own advantage. In the captured economy, powerful firms and state officials extract substantial private gains in the absence of the rule of law that normally prevents such illegal acts to occur. In Rwanda’s case, state capture has become the new normal. The Rwandan pension fund has been captured by the ruling party businesses. Three of RPF’s businesses that are part of Crystal Ventures Ltd were established using a significant amount of Rwanda’s pension money. The East African Granite Industries was financed by the pension money to the tune of 50 percent. Inyange Industries Ltd was financed by the pension fund to the tune of 40 percent. Crystal Telecom was financed by the pension money to the tune of 30 percent. Whether these RPF companies pay any dividends to RSSB remains clear – what is clear is that they are part of grand corruption through state capture. In South Africa, former president Jacob Zuma is in jail for refusing to answer questions about state capture perpetuated during his presidency. In Kagame’s Rwanda, state capture is the new normal. Sad.

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