Key political risks to watch in Rwanda-FACTBOX

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Friday September 03, 2010 05:34:12 AM GMT

By Hereward Holland

KIGALI, Sept 1 (Reuters) - Rwanda's President Paul Kagame won a second seven-year term in a landslide victory last month and immediately pledged to attract more investment and consolidate the central African nation's economic growth.

But opposition politicians and rights groups criticised a campaign they said was marred by government repression.

While some donor nations voiced concerns about the pre-election period, they generally congratulated Rwanda for a peaceful vote.

Here are some of the risk factors:

RWANDA'S POLITICAL SPACE

Kagame's win against candidates dubbed by opponents as stooges of the Rwandan Patriotic Front (RPF) underlines his domination of the political arena.

He has been applauded for restoring stability after the 1994 genocide and engineering Rwanda's rapid economic recovery and its bold vision to become a middle-income country by 2020. He plans to turn the landlocked country into an IT hub.

But his critics accuse him of being authoritarian, of trampling on press and political freedom. They say social cohesion and development come at the expense of free speech.

Donors praise Kagame's strong leadership and desire to bring in foreign investment, although nepotism remains an issue. There are concerns, however, that resentment among the opposition, elements of the political elite and parts of the population could foster political instability.

What to watch:

-- Kagame's attitude to opponents. Some analysts say Kagame must repair his image following the crackdown dissenters before the Aug. 9 election and prove he is not just another Africa strongman with a slick international public relations machine.

They say he will need to convince investors he remains committed to his promise of democratising the country. Investment in Rwanda doubled to $1.6 billion in 2009, a year after the resource-poor country was named top global business reformer by the World Bank. -- The continued muzzling of critical media. In April, two newspapers were suspended for insulting the head of state and inciting unrest. The government said the ban would run until after the election and that it was not politically motivated. So far the ban has not been overturned.

-- Trial of Victoire Ingabire. The head of the unregistered United Democratic Forces party is charged with collaborating with a terrorist group and espousing genocide ideology. Police arrested another presidential hopeful, Bernard Ntaganda, on suspicion of attempted murder and divisionism.

RULING PARTY RIFT?

Diplomats and sources close to the government say rifts within the ruling RPF risk undermining 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. The Rwanda Development Board denied any government assets had been sold off to the RPF elite.

Kagame's war on graft, which has led to Rwanda being ranked the least corrupt nation in east Africa, has seen former political associates locked up. Diplomats say Kagame is clearing out the stables to sideline possible threats. Exiled army and intelligence top brass are sounding increasingly belligerent.

The arrest of two senior army officers in April, following a dramatic reshuffle of the military hierarchy, underscored the tension 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 reported in 2008 that the RPF had supported Nkunda's rebel war in eastern Congo.

What to watch:

-- Signs of deepening rifts within the military. Rwanda's army has denied there are splits in its ranks after the authorities arrested the brother of an exiled dissident general suspected of threatening Rwanda's security.

Lieutenant-Colonel Rugigana Ngabo was seized by military police on Aug. 20 and is being detained at a military prison. His brother, General Faustin Nyamwasa, Kagame's former chief-of-staff turned arch-critic, fled to South Africa in February where he was shot in the stomach in June.

Diplomatic fallout over the attack prompted South Africa to recall its envoy to Kigali.

-- More grenade attacks. At least one person was killed in an attack after the release of poll results, the latest in a series. More attacks could deter tourists. Tourism is largest source of foreign exchange, generating $175 million in 2009.

-- Rwanda's arrest of Nkunda heralded a new era in relations between Rwanda and Democratic Republic of Congo. For years the two accused each other of backing the other's rebel factions. What happens to Nkunda could still influence relations. Congo wants him extradited for war crimes but analysts say Rwanda would be reluctant to let him go, fearful of what he might say about Kagame's administration.

REGIONAL STABILITY

Rwanda depends on its neighbours for the safe passage of its goods. All of its petrol, diesel and heavy oil must be transported by truck from Kenya and Tanzania.

What to watch:

-- Kenya endorsed a new draft constitution in a peaceful Aug. 4 referendum. East Africa's largest economy will hold a presidential election in December 2012. While the constitution referendum has boosted hopes the 2012 poll could also be peaceful, the stakes will be higher then. Also any violence around Uganda's 2011 elections could also isolate Rwanda.

-- Conflict in eastern Congo. Rights groups fear too hasty a withdrawal of U.N. peacekeepers would trigger more violence.

-- The murder of a former aide to Nkunda in Rwanda has further strained ties between Kagame and some elements of the Tutsi elite in Congo and Rwanda, foreign diplomats say.

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