Ideas & Debate
Rwanda lessons on company laws and boda bodaSunday March 15 2020
Two weeks ago, I had the pleasure of making another visit to the beautiful Rwandan capital, Kigali for a client governance training assignment. On arrival at the airport, we were required to line up at the immigration hall for an interview by white-coated, mask-wearing Ministry of Health officials.
When it was my turn, I found a tall gentleman – and that’s where my description of him ends as all I could see were his eyes - who held a tablet and introduced himself as a representative from the Ministry of Health. He then undertook a very polite interview, asking questions about my health and whether I had been to China recently as he feverishly tapped my responses into the tablet. He informed me that there was a camera behind him recording my temperature but I couldn’t see it. But this is Rwanda and I didn’t doubt him for a minute. Six short questions later and I was on my merry way to join the immigration queue. For once there was no requirement to show the yellow fever certificate.
I was accompanied on the trip by a colleague who was visiting the country for the first time. She marveled at the fact that there were paved pedestrian sidewalks everywhere but, more importantly, only human beings used the same as the boda bodas were mashed up in the sluggish evening traffic with us contrary to what we are used to here in the beloved +254. Our driver interjected at this point, saying that if a boda boda rider dared to drive on the sidewalk he would get heavily penalised. He pointed out something we had not observed.
Each boda boda rider and passenger helmet was stamped with a unique identifying number, which had to be printed on the driver’s jacket and bike as well. The boda boda had a GPS locator on it as well for easy traceability, so that if the boda boda rider did something to a passenger and took off, one would only have to call the cooperative (they all have to be members of a cooperative) and just by keying in the time and location of the incident, the driver could be identified.
The strict approach to law and order in Rwanda is also reflected in their new 2018 law governing companies, which is designed to protect shareholders and imposes a fairly high standard of duty for company directors. It is noteworthy that the law is written in English, French and Kinyarwanda for ease of reference by all citizens.
The duties towards making sound business decisions is well articulated in the solvency related Article 148, which requires directors not to enter into a transaction that has an unreasonable risk of causing the company to fail the solvency test. It goes further to require directors not to agree to the company incurring obligations unless they have reasonable grounds to believe that the company has the capacity to perform those obligations.
In simple language, it is now law that the government does not expect directors to be doing business which they know has significant risk of tanking the company.
The law gets even better when it comes to the potential of briefcase tenderpreneurs trying to do business in that jurisdiction. Article 297 of the Rwandan companies law provides that amongst others, a director or manager of a company who is found with books of accounts with no entry posted in it, accounts that are written in a language that is not prescribed by law or incomplete books of accounts that do not show profit or loss is liable to imprisonment upon conviction for a term of between six months to two years and a fine of between RWF 200,000 to 3 million (Sh21,000–315,00). Oh, and by the way, the same article makes a director of a company that is in commercial recovery who omits to declare that the company is in commercial recovery, and there are terms existing for settlement of claims under the same law, equally liable. Mercifully, the Rwandan judge has the discretion to give only one of the jail or fine penalties.
Rwandans have never been here to play. They take both their citizen health and business matters very seriously, over and above the cleanliness and social order that is glaringly apparent in Kigali’s streets. Clearly we don’t have to look far to get inspiration in this our beloved +254.
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