When I first came to Rwanda three and a half years ago on an invitation from the Government of Rwanda, arranged by Professor Arnico Panday, I remember the two of us walking a mile and a half from the hotel in Kigali to an ATM to withdraw some cash. Credit cards had just begun to be accepted in major hotels there. Over the last three years, there has not only been a surge in the issuance of debit and credit cards by banks in Rwanda but also the acceptance of debit and credit cards in remote towns. This is unlike many establishments outside Kathmandu Valley, and some even within the Valley that still ask for an extra 3-5 percent commission that they have to pay to the banks. On the contrary, the local banks in Rwanda are already issuing smartcards, something even countries like the US are slowly adopting. The widespread usage of banks accounts and cards has helped the largely unaccounted informal economy to slowly formalise and small entrepreneurs wanting to work with the banks to build strong financial credentials.
Taxes and Finance
A couple of years ago in a restaurant in Kigali, after paying by card, we were surprised to receive a piece of paper along with our paid bills. It was a receipt from the Rwanda Revenue Authority for the Value Added Tax (VAT) that we had paid in the restaurant. With the mandatory requirement to install such software and system, the Authority has privy to all transactions eliminating the possibility of evasion of taxes. Further, the customer can then be certain that the VAT they are paying will go to the government. In Nepal, despite paying VAT and service charges, we do not know for sure if the money actually reaches the intended place or not. The Government of Rwanda is continuously using technology to ensure the enforcement of law provisions along with transparency, thereby reducing any leakages in the collection of taxes or its administration.
Further, Africa has been ahead of the world in terms of using the mobile phone platform as a tool for helping poor people access finance. In the book Rwanda Inc. authors Patricia Crisafulli and Andrea Redmond discuss how the government of Rwanda and Visa entered into a collaboration to build electronic payment infrastructures in the country. Visa with its subsidiary Fundamo, launched banking products on mobile phones and partnered with microfinance institutions. This has made transfer of money not only easier but also cheaper by reducing cash transactions as well as widening the tax net.
Rwandan Way
In Nepal, even though we try emulate many global practices, we still resist the entry of global companies or companies with global competencies. When we read our monetary policies or the annual budget, technology just appears as an item to be ticked off on the list. It seems as though, if given the chance, our policies would rather revive the barter system than embrace technology.
Meanwhile, Rwanda continues to raise its benchmark. Take the annual International Trade Fair currently being organised in Rwanda for instance. It meets the global standards and it makes me wonder why we like to stick to the Nepali way of doing things instead of raising our bar to meet global standards. We have not even been able to showcase the entire set of businesses present in the country, giving opportunities for people to learn, understand and network with other businesses in the small exhibition ground we have. In Nepal, our fairs have not been able to graduate beyond a slightly modified version of a ‘hatiya’ (village market).
Going back to Rwanda, only six percent of the total population of the country had access to electricity in 2009. But by 2018, Rwanda aims to generate enough electricity to meet its domestic demand which will be at par with the current Nepal production. The tariff is high averaging 24 cents, double the tariff in Nepal, but the people are willing to pay. Electronic meters ensure that people use pre-paid recharge cards that ensure that the utility is collecting money before the consumer starts using electricity. This is just opposite of what happens in Nepal where people first use electricity and then pay later and government agencies continue to be the biggest defaulters of such payments.
Rwanda’s electricity infrastructure be it usage of pre-paid cards or underground wiring or high quality transmission infrastructure imitates the best in the world.
Do it Yourself
It is impressive and baffling at the same time to see how the Rwandan government has leveraged technology to provide various services to its citizens. Be it the electronic visa system; the way one can open a company and manage it from a computer or the way the government revenue system works. In Nepal, it is time for us to do away with programmes where reports are merely launched to instead focus on implementing plans. As former Secretary Krishna Gyawali questions, “Why do we still have to use a stamp after we sign documents?” The utility of the stamp is gone, but we still love to use them.
Similarly, we have the habit of waiting for donor agencies to come and fund the adoption of technology. For instance, we waited for years for the Asian Development Bank to give Nepal a grant to be able to introduce smart driver’s license. The government itself could have done that. The fee from the issuance of license would have easily been able to cover the cost of license. In a country where a two wheeler costs minimum of $1,000 and a four-wheeler a minimum of $10,000 why can the country not as ask its drivers to pay atleast $100 dollars and issue a ten year license? This amounts to less than $10 a year.
In the quest for bloating our egos, we have turned ourselves away from the direction the world is moving in.