How Ruling parties do business.

An essay about the Rwandan Patriotic Front (RPF)’s Business Arm:*QZFJ3Xr0W-2rUvy5HXVA9w.png

It isn’t an easy fit for political parties in power to run clean, efficient, and profitable businesses. So many things can go wrong and often do. Most parties have tried and failed, others still run white elephants, parasites to the systems they rule.

Yet a political party without a stable source of income and a lever for investment is improvident, especially in a poor country.

Cristal Ventures Limited (CVL) is the Rwandan Patriotic Front’s (RPF) business arm and serves as the engine of growth in the developmental State.

Balancing a political and business duty, CVL has consistently ventured in sectors that were unattractive to private investors, yet strategic to the ambitions of the country. In telecom, for instance, the South African operator MTN was not too keen on entering the Rwandan market, twenty years ago. Let me rephrase: MTN had never ventured outside of South Africa.

To attract the South African brand, CVL – then Tristar LTD – provided most of the funding and guarantees and encouraged private investors to join in on the telecom business. Yet, when the company became stable only a few years into operation in Rwanda, CVL began its withdrawal by selling its shares to private investors. That has been the business model of CVL: blazing the trail for a strategic sector of the economy, make it vibrant and profitable, attract other investors, then sell its shares to private operators and venture into the next green field.

Imagine Aliko Dangote leaving his cement factories to other investors because he wants to take up a new challenge of sending Nigerian astronauts into space… From a patriotic standpoint, the model is brilliant. But Rwanda isn’t Singapore or Qatar. There is no endless source of cash, therefore in each of its business ventures CVL must make profit. 

However, for Rwanda to rank top on World Bank’s ‘easy of doing business index’ it must show absence of undue competition in the country. CVL must compete on the same footing as other businesses in the private sector, with no favors from government. 

Rwanda can only attract FDI if investors are confident they won’t be forced to kickback ten percent or enter forced joint-ventures with CVL on major contracts. On the other hand, CVL assets too aren’t to be treated as ‘res populi, res nullius’ (that which belongs to no one and to everyone), with party commissioners getting hefty executive positions for wives and relatives in ‘our’ company or ruin the business model to bankroll political elections.

This is where many ruling parties have failed to run a ‘crystal’ clear business. In most countries the line between the state and the party is deliberately blurred to favor individual interests. Within CVL there is a clear separation of ‘the State and the Church’ – the business in this case. Yet, the business serves the country, and somehow not the other way around.

While the company has consistently been run by competent Rwandans, today there is a Singaporean national at its helm, a business executive who’s never attended ‘umuryango’s cadreship-level three’ of the RPF…

CVL too is a strong governance lever. When the party issues its manifesto in the election year, or when the president of the republic and its chairman makes pledges for job creation and building infrastructure, citizens tend to believe them more than other politicians because they have the means of their words, as it were…

I recently saw a story claiming that the World Bank had instructed Rwanda to ‘come clean on party business’. I had been looking for an opportunity to write about Cristal Ventures Limited, the Rwandan Patriotic Front business arm.

The article that triggered this piece is naturally a lie and the World Bank did not make such request. The World Bank does not do political activism targeting individual politicians or individual companies. Nowhere in the rather encouraging World Bank’s Rwanda Systematic Country Diagnosticis Cristal Ventures mentioned. The RPF is mentioned twice: first in the context as a liberator of the country and second in annex.

However, I am enjoying these articles, for they give me an opportunity to tell some of the most exciting Rwandan stories. For instance, one of the subsidiaries of CVL, the Crystal Telecom Limited is listed on Rwanda Stock Exchange and as a requirement, the company must make its accounts transparent, make all its subsidiaries public, publish quarterly reports of its shareholders and clients, report on the good standing of its board members, indicate it’s Corporate Social Responsibility, show clean audit reports – preferably by one of ‘the Big Four’ international audit firms, etc., and tick all the boxes in the International Financial Reporting Standards (IFRS).

The telecom business (CTL) is an SPV (Special Purpose Vehicle) – a distinct company with its own assets – which is listed and has 20% of MTN. Majority shareholding was locally owned, including by CVL. Local shareholders gradually cashed in on their shares but CVL stayed – purposely to keep shares that are to be floated for Rwandan private investors to acquire them.

CVL goes even further: Its Chief Executive Officer – not a Rwandan but a Singaporean – Mr. Lee Kok Foong is there to infuse some of the cutting-age work ethic that his country is known for. Everything one needs to know about CVL can be found on their website:

The Systematic Country Assessment coincided with the publication of another World Bank’s assessment: the ‘Country Policy and Institutional Assessment (CPIA)’. The CPIA rates countries against a set of 16 criteria grouped in four clusters: (i) economic management; (ii) structural policies; (iii) policies for social inclusion and equity; and (iv) public sector management and institutions.

In simple terms: The report assesses: The rule of law, accountability, transparency, the quality of public administration, the efficient use of public resources and management of debt. in all those areas, Rwanda leads Africa with a score of 4.0

A few days later, ‘Standard and Poor’ – a leading rating firm globally, raised their long-term sovereign credit rating on Rwanda to ‘B+’ from ‘B’, and assigned the country a stable outlook, adding: ‘Rwanda’s economic growth prospects are stronger than peers’, in our view, supported by robust investment levels of about 25% of GDP’… We anticipate the country to move away from grants, towards concessional loans… The President and the Rwandan Patriotic Front have provided institutional stability, support poverty reduction, improve business environment and gradually shift from public- to private sector-led economic growth…’

As a student of Rwanda’s eco-political trajectory, one is able to appreciate that the State and the RPF as a political party subscribe to the highest standards of financial transparency. Transparency International consistently ranks the country among the least corrupt in Africa and in the world. Recently, an overall assessment of the efficiency of Rwandan systems was conducted and successfully approved Rwanda’s bid to become a member of the OECD Centre.


This piece was only an overview of the philosophy; the concept of RPF’s business was documented in a groundbreaking research four years ago, conducted by the Overseas Development Institute (ODI). The two authors, David Booth and Frederick Golooba-Mutebi, assess the corporate governance and its approach to political involvement in the private sector of the economy.

The researchers found one of the most efficient and transparent institutions. They uncovered best practices that are rare-even for private sector standards. Here is the link:

As Rwandan entrepreneurs are now used to, it is routine in tenders issued by a CVL company, for competitors’ bids to be preferred to a CVL subsidiary, if the latter is found to have made a more interesting offer, the report showed. As a private company, this is not a legal requirement. But internal discipline and the quest for excellence pushes CVL to always pursue ‘Value for money’– even if that means taking business to competition. They didn’t even teach us that in business school!

Not surprising, considering that the World Economic Forum’s Global Competitive Index, ranks Rwanda as the 7th most efficient governments in the world — ahead of Switzerland, Luxemburg and most Nordic countries: Denmark and Sweden — that’s as high as you get, when you score higher than a Scandinavian country on just about any ranking.

Why did I write this story? 

In the years of the liberation struggle which the RPF waged just under three decades ago, secrecy surrounded its activities because cadres were operating clandestinely in foreign-at times hostile countries. Moreover, there is a general bias on all matters surrounding politics; it is not uncommon to hear business people say: ‘I don’t do politics’.

However, many people possibly benefit from any prevailing confusion – In one instance President Kagame made a joke: ‘I am told: the order came from above, when I look up, I see no one giving the orders…’

In today’s Rwanda, a bank’s MD won’t be bullied into clearing a potentially non-performing loan because the client claims to be ‘sent from above’. ‘Where exactly above?’ — The MD would ask. ‘Should I call/tweet the president and ask him to confirm that he sent you for a loan?’

In reality, the RPF has embraced the 21st Century. Rwanda does not practice protectionism and is open to investors. The country intends to compete with the best on the Rwandan and international market. As a result, its companies are managed by top CEOs poached from Singapore, audited by the ‘big four’ and rated by the ‘big three’ — global auditing and rating agencies respectively.

Thanks to working within the RPF model, the South African telecom, MTN has grown from a local, risk-averse company twenty years ago, to a disruptive multinational with a presence in 22 countries, including the Middle-East. And under CVL impulse, for the first time, MTN is going to float its shares on the Kigali stock exchange.

Note: RPF’s Assets are estimated over half a billion US dollars.