The concept of performance contract has received considerable private, public and institution’s attention both in developed and developing world especially in African Countries and particularly, in Rwanda. Since 2006, Imihigo “performance contract” is signed between Public Institutions leaders and His Excellency, The President of the Republic of Rwanda every year. After Genocide against Tutsi, Rwanda has decide to put people at centre of governance “People centred” towards achieving good governance. The findings revealed that performance contract, imihigo had a significant influence to the performance of public institution in Rwanda. Specifically, the study found that performance contract resulted to an improved in accountability, ownership and citizen’s participation. There are no doubts that, performance contracting leads to effectiveness and efficiency of performance of Public institutions in Rwanda contributed significantly to improvement of social, economic development of Rwanda and enhanced creativity, innovation, competition and strong focus on results. To same, this tool can even be transferable to other countries, thought it is still an open debate among scholars.