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.