FRANCIS GATARE: The Director General Of RIEPA speaks to Business Rwanda

On SME’s

Rwanda is known for attracting large investments but Small-Medium Enterprises (SME) make up the bulk of their investors, they bring vital skills and services that are lacking in the Rwandan economy. SME’s are pioneers who venture into virgin economies before larger investors enter the market, the proliferation of these small-medium businesses reflects the growth in the Rwandan economy and bodes well for the future as SME’s are growing into larger corporations. Dubai World recently invested US$230 million in a total package that will include; a golf course, luxury houses, the Akagera National Park, an eco-lodge in Nyungwe, a hotel in the Virunga mountains, among others and this will be a major boost to the tourism industry.

On the reforms Rwanda is undertaking to improve its position on the Doing Business Report Index

As Director General at RIEPA; Francis Gatare is proud of recent reforms implemented by the government; “Property tax is going to be removed, the government used to charge 6% as a way of having a stake in local businesses but that will be replaced by a single charge of Rwf 20,000 (US$36) and the mortgage fee will be waived. Institutions such as the Rwanda Revenue Authority and National Social Security Fund will work together to streamline their payment systems and focus on online payment to reduce bureaucracy.” These are examples of how the Rwandan government is striving to facilitate enterprise. He also mentioned the problems taxpayers used to face: “Before if you were paying Rwf 10 million in tax, you would have to queue and wait for the cashier to count it twice, now we have a payment center here and one can pay by cheque.”

On the recent opening of the stock market;

Gatare said it was going smoothly. “It is going well, we haven’t had any IPO’s (Initial Public Offer) yet but we have introduced bonds as a means of slowly introducing Rwandans to capital markets. We have had a lot of outside interest from Banks, investment funds, insurance companies and we want to introduce cross-registering for foreign firms to register here and Rwandan firms to register abroad.” Asked if he feared that outsiders would have a huge advantage over Rwandans, he argued, “We believe in the free movement of capital, and we operate a flexible policy.”

On Rwanda’s banking sector

Gatare commends the progress of the banking sector in Rwanda; “It is amazing; in six years, Rwanda’s banking and financial sector has grown with six major banks and financial institutions. Foreign companies have invested heavily in modernising both in structure and infrastructure using IT to transform their businesses.” The expansion of the banking sector bodes well for the growth of Rwanda as banking underpins all other sectors. Rwanda hopes to become the financial services hub of Eastern and Central Africa. “Bank de Kigali is very profitable and could go on the way it is but we need investment to improve it. Stanbic, Credit Suisse and Barclays are interested in buying it; they could bring new technology to make it world-class.”

On the attention Rwanda is getting among global leaders

The rapid development of Rwanda has led to global players taking notice; Tony Blair recently took on a role as an advisor to the Rwandan government. “That is a reflection on the stability of Rwanda and the forward-thinking leadership of President Paul Kagame. Tony Blair has tremendous faith in our President and his policies and will use his contacts in business and industry to network on behalf of Rwanda to attract investment.” Brand Rwanda is being created into a dynamic force on the global market and the East African investment conference is central to this.

The Kigali – Kampala Pipeline

One product of this approach is the newly commissioned pipeline from Kigali to Kampala. Gatare explained the situation: “As oil prices increase, we don’t know how high they will rise, so we have to stabilise supply. We will construct a pipeline and construct a base for strategic reserves where we can store up to 3 million cl. for local consumption; this will remove the speculative aspect in fuel supply. For example, in Uganda fuel prices went up 500% during the Kenya crisis, purely due to speculation.” These strategic reserves will help secure Rwanda’s energy needs and will end the absurd situation of importing fuel to export our goods and it is hoped that soon petroleum will be refined in Rwanda to further reduce costs.

THE POWER OF FIVE

Leveraging the East African market through trade and investment.

THE EAST AFRICAN INVESTMENT CONFERENCE

Kigali, Rwanda

26^th – 28^th June 2008

In 540 BC, Heraclitis, a Greek philosopher said, ‘nothing endures but change.’ As globalisation spreads its wings, nations are realising that they must bury social, cultural and geo-political disparities to create a universally acceptable environment that will reap tangible economic outcomes. It is becoming evident that regional integration shall shape the future of the world’s economies and the East African Community is no exception.

‘The reality of the situation is that we have merged our economies from various national ones to a single regional one’, Francis Gatare, Rwanda’s Investment and Export Agency head says. It is with this in mind that his organisation is involved in frenzied preparations for the upcoming East African Investment Conference set to take place in the Rwandan capital, Kigali, at the end of June 2008.

Rwanda, the region’s leading regional investment conference organizer, is hoping to serve as a pioneer by creating a platform for member states to reap the fruits of regional integration. The conference will serve as an opportunity to evaluate East Africa’s potential to serve as a commercial platform for servicing the continent. The forum will enable producers and industrialists to challenge government officials on regulatory issues and link them with investment bankers to stimulate further investments and expansion in the region.

Under the theme ‘Leveraging the East African market through Trade and Investment’, the conference targets participants from Rwanda, Uganda, Kenya, Tanzania and Burundi. Rwanda is working directly with the East African Business Council (EABC) and all regional investment agencies to ensure that the event is successful.

For Rwanda, there is a lot at stake. On the outset, a landlocked country with a population of under ten million does not offer much promise in terms of return on investment to a multi-million dollar investor hoping for quick returns. On further scrutiny, Rwanda’s location at the precise core of the African continent presents a strategic advantage. For Rwanda, successful regional integration with Uganda, Kenya, Burundi and Tanzania increases the investors’ target population tenfold from 9.7 million to 125 million. East Africa’s total GDP currently stands at US$ 104.2 billion, again ten times higher than Rwanda’s US$ 11.24 billion.

The stakes are high and something needs to be done; Francis Gatare suggests that integration is long overdue. ‘We have always been perceived to be one market, when an investor wants to invest in Rwanda, they are already considering the region,’ he argues.

East Africa was faced with a dilemma between December 2007 and February 2008 when Kenyan opposition and incumbent government entered a deadlock dispute over the country’s political leadership. The turmoil crossed the country’s borders when fuel prices sky- rocketed in Uganda and Rwanda and goods in transit to the two countries were blocked from crossing the Kenyan border.

It is obvious that what happens in Kenya will affect what happens in Rwanda and vice versa. A commonly sited example is the last Doing Business Index, where Rwanda was ranked poorly in the area of doing business across borders; as a result of regional issues “At this conference we are going to confront each other directly on policy issues” Mr. Gatare added.

The guest list of the conference delegates does not suggest otherwise, Amb. Juma Mwapachu, the EAC’s Secretary General and heads of state from Uganda, Rwanda, Burundi and Kenya will all be present. Seven hundred leading business executives from Rwanda, the region and the world are all invited to attend. Among them; Loyd Blankfein (Goldman Sachs), Frank Griffiths (FINA Group), Kithili Mbathi (Stanbic Bank), Patrice Motsepe (Africa Rainbow Mineral), Charles Mbogore (East African Business Council), Cyril Ramaphosa (MTN Group), John Milenge (Electrogaz), Patrick Bitature (Simba Telecom), Jan Mohammed (Serena Hotels) and James Mulwana (UMA).

‘Kwita Izina’ is back!

On 21st June 2008, Musanze, a tiny town placed at the foothills of the Virunga Mountain Range will be host to the fourth annual Gorilla Naming ritual.

Once wildlife conservationists, most notably Dian Fossey, predicted that the Mountain Gorillas were on the verge of extinction due to the onslaught of poachers and encroachment on their habitat by land hungry farmers.

This has since been reversed and the Gorillas are once again in ascendancy as the government has made the conservationists goals of preserving the species its own. Every birth and every ‘Kwita Izina’ is a celebration of successful conservation with a long term dream to take mankind’s closest relative off the endangered species list.

Commonly referred to as the CEO of Rwanda Inc., President Paul Kagame, is one of the architects of the conservation initiative. ‘We believe that protection of the environment is fundamental for sustainable prosperity,’ he commented at last year’s ‘Kwita Izina’ ceremony. ‘We live in an era when tourism and conservation have to be pursued with equal vigor,’ he adds.

Rwanda’s national tourism agency, ORTPN, under the leadership of Mrs. Rosette Rugamba, has won numerous accolades and worked hard to transform Rwanda’s reputation from ‘the tiny war torn central African nation’ to, ‘The New African Dawn’.

Today, Rwanda is increasingly becoming a preferred tourist destination with endorsements from Bill and Melinda Gates, Natalie Portman, Steve Irwin, Andrew Young, Marjorie Kaplan and Terry Lundgren, who have all visited Rwanda’s mountain gorillas. Renowned conservationist Jack Hanna has taken his love for the place to another level by building himself a home in Musanze.

‘Kwita Izina’, Kinyarwanda for ‘to give a name’ is a term that stems from an ancient Rwandan traditional ceremony where newly born babies were given names. The term was adapted by ORTPN in an effort to raise awareness and celebrate the birth of gorillas in their natural habitat.

Every year Rwanda’s head of state, government leaders, global celebrities, the diplomatic corps, business community, international media and tourists converge along the fringes of the Parc National des Volcans to celebrate the birth of new gorillas, an achievement in environmental conservation. Given that tourism raking in a whooping US$ 42.3 million in 2007, up from the previous year’s US $36 million, there’s reason to celebrate. The mountain gorillas have been central to the exponential growth of Rwanda’s tourism sector.