Ideas & Updates

Lessons from Rwanda: Harnessing public-private partnerships to drive payment digitization

© © Better Than Cash Alliance

By Oswell Kahonde and Juan Blanco

Under its Vision 2020, Rwanda is striving to modernize its economy and empower its growing middle class. At the heart of these efforts is the country’s commitment to digitization and a cashless economy, powered by sweeping mobile phone penetration and high-speed internet access.

The government, which joined the Better Than Cash Alliance four years ago, has actively promoted payments via digital channels and has embraced the private sector as a key partner in increasing adoption of electronic payments. These efforts are helping Rwanda seize the many benefits of digitization: increased efficiency, transparency, and revenue, thereby cutting down on leakages and cost of collection.

To share successes, strategies, and learnings from this journey, the government of Rwanda, for the second time in less than a year, hosted a Better Than Cash Alliance Peer Exchange. The event brought together representatives from eight member countries of the Alliance, namely Sierra Leone, Malawi, Paraguay, India, Ghana, Côte d’Ivoire, Papua New Guinea, and Nepal.

© © Better Than Cash Alliance

Peer exchange participants visited an agent from Irembo, the one-stop portal for e-Government services in Rwanda.

Over the course of the five-day knowledge exchange, the participants learned how Rwanda is harnessing public-private partnerships (PPPs) to increase the uptake of digital payments, especially for government services and taxes. For example, the group examined how Rwanda was able to collect 92% of Value-Added Tax digitally in 2016 – a 12% increase from the previous year, according to Rwanda’s Revenue Authority. Additionally, insights were shared on collaboration between the Rwanda Utility Regulatory Authority (RURA) and private bus operators of Kigali, which led to a 140% increase in revenue between the months of January 2016 and February 2016, due to reduction in leakages. And arguably of most interest to citizens, the group discussed how digital portals, such as Irembo, improve access to government services.

© © Better Than Cash Alliance

Peer exchange participants at a bus station in Kigali where riders use “Tap & Go” preloaded smart cards, which can be topped up via mobile wallets, and discounted fares are offered to help spur adoption.

Similar to previous Alliance peer exchanges, participating countries offered lessons learned from their own digitization efforts. Côte d’Ivoire, for instance, shared its experience in digitizing payments for school fees. The initiative facilitates annual school registration fee payment for 99% of Côte d’Ivoire’s 1.5 million secondary school students. It has reduced costs and improved operational efficiency, as well as transparency for all the beneficiaries.

Perhaps most important, participants gained a clear sense of how to continue digitization efforts in their home countries.

“We’re planning mass campaigns and a community day for highlighting the benefits of digital payments for the citizens.“
Kavita Bhatia and Sh. Mayank, Ministry of Electronics and Information Technology, India_

“Given the transition period we are in, our task will be to convince the new authorities about the leadership needed in order to reach the goals set. We’d be asking the Better Than Cash Alliance for support.”
Laura Morinigo, Financial Inclusion Secretariat, Ministry of Finance, Paraguay

By the end of the exchange, one common learning emerged: Successful digitization requires collaboration between government and the private sector.

“I have learned that where there’s a will, there’s a way. Government’s drive to achieve digitization can attain fruition when all stakeholders come together and work toward a common vision.”
Nana Yaw Bekoe Kissiedu, Ghana Revenue Authority, Ghana

The willingness of the government to bring on the private sector is crucial to drive payments digitization.”
Memunatu Bernadette Bangura, Ministry of Finance, Sierra Leone

Collaboration must be sparked by government, noted Herbert Asiime, Director of Banking and Non-Banking at the Ministry of Finance and Economic Planning (Minecofin) of Rwanda: “Having a national cashless strategy and a national working group on payment systems is key. These should be owned and approved at the highest political level (cabinet) for implementation to be effective.”

Eric Rwigamba, Director General for Financial Sector Department at Minecofin, shared how hosting two Peer Exchanges had been a rewarding experience. “Getting insights from peer countries is really valuable! Learning from 14 countries in total, within nine months, without visiting any of them is a good return on our time investment.

Looking ahead, India will host another Alliance Peer Exchange later this year, building on the insights shared at the country’s previous exchange last year. Notably, leaders from India will share their learnings from rolling out the Direct Benefit Transfer (DBT) initiative, which has revolutionized the delivery of welfare schemes and led to billions of dollars in savings for the government.

From Rwanda to India and beyond, Alliance members and partners continue to learn and grow from collective knowledge, helping more countries and companies embrace the power of digital payments.