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Unstable Rwanda Threatens Investments
Posted on Wednesday, June 02, 2010 @ 05:15:27 CDT by kwpnews


KIGALI  (Reuters) - The international community has heaped praise on Rwanda for its rapid socio-economic recovery after the trauma of genocide 16 years ago, its stability and its bold vision to become a middle-income country by 2020.

But while the World Bank may have voted Rwanda the most improved business reformer globally, rifts within the ruling elite and regional insecurity threaten the investment climate.

Risk factors:


Foreign diplomats and sources close to the government say deepening rifts within the ruling Rwanda Patriotic Front (RPF) risk undermining the the nation's stability.

Regional analysts say parts of the banking, tea plantation, coffee, tobacco and mineral exporting businesses are now in the hands of people close to Kagame and the RPF elite.

Political analysts say the divisions are partly connected to the privatisation of government and party assets into the hands of President Paul Kagame and his inner circle.

The Rwanda Development Board denied any government assets had been sold off to the RPF elite.
Meanwhile, Kagame's war on graft has seen former political associates locked up.

The arrest of two senior army officials in April, following a dramatic reshuffle of the military hierarchy, underscored the tensions and erosion of trust at the top. Analysts say the generals' detention -- one for abuse of office, the other for immoral conduct -- is part of a crackdown on critics of Kagame's centralisation of party financing and political power.

Diplomatic sources say the arrest of Congolese Tutsi rebel Laurent Nkunda has also fuelled tensions within the ruling elite. A U.N. panel of experts reported in 2008 that the RPF had supported Nkunda's rebel war in easten Congo.

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