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

26th – 28th 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.

Rwanda’s burgeoning tourism sector rises from the ashes

Over the last ten years, Rwanda has worked hard to present an alternative image to the one left by the legacy of genocide, war and bad government. Although there appears to have been success in presenting Rwanda as tourist friendly destination this has been difficult.

Interestingly, Berlin, the site of the ITB fair was a divided city just under twenty years ago when the Berlin ‘Mauer’(Wall) came down shattering communism along with it and paving the way for German re-unification. Having been flattened at the close of the Second World War and divided for 45 years after that, Berlin is still a city in transformation just as Rwanda is re-inventing itself as a favored tourist destination in Africa.

Tourism is among Rwanda’s largest foreign currency earners after with US$ 42.3 million in revenues from 39,000 tourists as of 2007.

‘..And this is just the beginning,’ says Rosette Rugamba, the agency’s director, ‘we are targeting $68 million from 50,000 visitors this year’. Estimates from On the Frontier, an American consulting firm, suggest that Rwanda will generate $100million from 70,000 tourists in 2010. These estimates however were made long before Dubai World, one of the largest investment companies in the world, made a commitment to invest $230 million in the sector. According to the company’s website, it hopes to turn Rwanda into the Dubai of Africa. This could drastically improve Rwanda’s targeted wealth.

The rise of the sector can be attributed to ORTPN’s hard work and innovation. The agency is diversifying tourism activities by capitalizing on its mountain gorilla assets while offering alternate activities like Bird Watching, Mountain Climbing and hosting promotional events like the now famed, ‘Kwita Izina’ traditional gorilla naming ceremony. The agency has ignited the interest of many global personalities in Rwanda, among them Ben Affleck, Larry Page, Bill and Melinda Gates, Jack Hanna, Natalie Portman and many others. The celebrity confidence in Rwanda is an endorsement that increases positive press coverage and attracts new and repeat visitors. The victory in Berlin is but another feather in Rwanda’s cap.

VICTORY IN BERLIN

At an event that could be described as the World Cup of tourism, Rwanda stamped its authority as Africa’s most innovative eco-tourism destination while besting its African competition to emerge ‘Best Tourism Exhibitor’ in the biggest tourism exposition in the world.

Held annually, the Internationale Tourismus Borse (ITB) in Berlin is the largest travel trade show in the world. For two consecutive years, Rwanda has topped the continent to emerge ‘Best Tourism Exhibitor’, Africa Category.  Rwanda’s has on two occasions outshone its competition in the form of traditional tourism giants like Tunisia, South Africa, Namibia, Ethiopia, Kenya, Morocco, Egypt and Tanzania.

“We were evaluated by the same judges who evaluated Tunisia, Ethiopia and South Africa and others and they thought we are the best on the continent. These judges take note of all possible details ranging from innovation, hospitality and many other yardsticks. Our victory means that tourism in Rwanda has come of age. We are humbled and intend to build on this confidence.  Tourists will not be disappointed when they come to Rwanda’, explained ORTPN Public Relations Officer Annet Tamara.

Rwandan performers managed to bring the exposition to a standstill and wow the jaded seen-it-all pundits with a live performance of the graceful Rwandan traditional dance, attracting a flurry of guests to the stand. ORTPN was determined to make it a ‘two in two’ triumph and prepared meticulously to achieve this very result.

“There was determination. We spent three months in preparations and we gave our small stand a Nyungwe forest feel which made it stand out. Visitors felt they were visiting Rwanda,” Rosette Rugamba, the agency’s Director General commented when she returned to Kigali.

By all accounts, Rwanda’s tourism agency pulled out all stops to recreate lush Rwanda in the concrete jungle of Berlin. Visitors to the stand were treated to a cup of Rwanda’s specialty coffee or tea depending on their preference. A distinctive dress code, good customer care, discipline and good old fashioned Rwandan etiquette were exhibited by the Rwandan representatives in Berlin.

It is however the ‘Agaseke’, Rwanda’s trademark traditional hand woven basket that fascinated the Berliners most. Present at the Rwandan stand was basket weaver, Liberata Mukagakwaya.

“At the exhibition, people could not believe that our baskets were hand-made, but would be amazed when they saw me making one (basket) for them. It really impressed everyone.” Mukagakwaya commented.

During the ITB fair, 1600 ‘Agaseke’ baskets were distributed as free hand-outs to visitors of the stall.

The Internationale Tourismus Borse (ITB)

(you don’t need photos….just add it to the Rwanda Berlin story)

ITB Berlin is known to be the biggest annual tourism exhibition in the world that aims at showcasing destinations and encouraging networking among businesses in the tourism sector. This year the expo attracted a record 11,147 companies from 186 countries and at least 180,000 visitors.

A press release from the Office of Tourism and National Parks (ORTPN) says ‘Rwanda gets to exchange vital information in regards to tourists’ views about the country through continued presence and interaction at such a major international exhibitions.’

Germany comes third in the number of visitors to Rwanda after the US and UK respectively. This gives increased relevance to the ITB fair in Berlin.

THE SPIRIT IS WILLING BUT THE BODY IS WEAK

When it comes to aggressively pursuing a developmental agenda through widespread promotion of private commercial transactions, not many countries in Africa can match Rwanda pound for pound. Since the late 90s Rwanda has been trying to promote her exports, lure direct investment into the country and upgrading its infrastructure.

Most of this hard work has paid off translating into annual economic growth rates of between 5% – 8%. These statistics, though impressive, do not tell the whole story. One must realize that Rwanda has just emerged from ground zero to realize why these rates are this high. At the start of the drive to there were hardly any skilled personnel, there was a miniscule consumer market, no industrial base to speak of and the turmoil of genocide, war and mass displacement had made sure that even agriculture, the country’s mainstay, had been brought down to its knees.

Fourteen years later, there has been marked improvement in all sectors. There, however, remains one barrier to a rapidly growing and well regulated business atmosphere. The legal framework of business is still in large sections hopelessly antiquated if not totally silent on the newer forms of commercial transactions coming up in Rwanda like e-commerce and capital markets.

In the defense of the Rwandese legislator, he/she had to deal with legislation that concerned itself with basic needs of the average citizen when he/she was not instituting the basic pillars of a functioning state. Complex business rules and their attending regulatory bodies have not featured very highly until quite recently. The Ministry of Justice in December 2005 released a report on the state of Rwanda’s business regulatory framework (available on www.minijust.gov.rw ), the good news was not to be found in the findings of the report but perhaps in the fact that the Ministry had highlighted many of the deficiencies of the law as it regards business.

With the hosting of the recent ‘Connect Africa’ summit and the continuous promotion of ICT as a way of driving Rwanda into a knowledge-based economy, it is surprising to note that e-commerce does not have any regulations controlling it in Rwanda. The stock exchange operates without any oversight or concrete rules, leaving things up to the integrity of the individual traders. In fact it might be safe to say that the most developed business laws are those dealing with taxation as well as investment and export promotion.

On the upside, the draft law governing the Penal Code appears to deal with the more advanced forms of theft and fraud and the repressive mechanism appears to have gone ahead of the business framework in this case. Since there exists a Business Law Reform Cell in the Ministry of Justice to study the deficiencies of the legislation on business and make recommendations to the Parliament, at least there seems to be some awareness of the problem on the part of the authorities. The main question will be how fast reforms can be made and their relevance in a growing commercial sector. Will the body be able to keep up with the spirit in this case or will it be more of the usual?

THE LAST WORD: Are you a stakeholder?

By Minega Isibo

Members of the committee for the preservation of Clear English have good reason to grow increasingly uncomfortable. The English language is currently witnessing an invasion of words and phrases that can best be described as ‘management-speak’. Not content with causing confusion in the work place, the phrases have now been unleashed into the public domain.

Consider Exhibit A; the wonderfully vague expression ‘stakeholders.’ These days everyone is a stakeholder in something or other; we know this because every night there is someone on the news letting us know about it. Precisely what this entails is never clear, but it is now used with such reckless abandon that it threatens to officially replace certain words like ‘citizen’ for which it is now used interchangeably. The words very vagueness makes it useful as a phrase to add gravitas to any discussion. It’s hardly a new phenomenon, the government under Tony Blair was particularly fond of it although they raised the bar with management-speak to levels we can only dream of (one can only marvel at the genius who not only created the term ‘blue-skies thinking’ but then convinced the Prime Minister to make an entire department out of it). However in the last year or so this phrase has become so ubiquitous that one cannot help but marvel at how this expression has caught on so well.

I have also found myself growing increasingly baffled by phrases that use the word ‘oriented’. Specifically the twin terrors of ‘solution-oriented’ and ‘impact-oriented’. I mean, if a plan or project is not geared towards making an impact, then why is anyone even involved in it? Both phrases are redundant but you have to have a sneaky admiration for people who can turn this redundancy into such an art form. One hopes this creativity is also being applied more constructively.

However there is no buzzword quite as popular and as adaptable as ‘capacity-building.’ If this word didn’t exist, someone would have invented it. It is the multi-purpose phrase which serves as a shorthand for ‘things we need to do’ and similar themes along those lines. Countless conferences are held to discuss this issue but cynics may be forgiven for thinking that the only capacity-building going on during these meetings is the country’s capacity to host conferences. Recently I saw a banner advertising a STAKEHOLDERS WORKSHOP ON CAPACITY-DEVELOPMENT. My head hurt just reading those words and I sense I was not alone in this regard. Why is it considered essential for such headache-inducing language to become a compulsory aspect of public discourse? And considering the fact that this kind of language is now used so frequently, we are now at a point where damage-limitation is the only remedy.

I am sure most of these expressions are often used by well-meaning people and I’m sure there are many who consider the entire phenomenon to be harmless. I have a friend who can hardly keep the laughter in every time he hears or reads the phrase ‘knowledge-based economy’. Likewise I can occasionally chuckle to myself every time I see one of the offending phrases being dragged out in the name of clarifying policy when of course it usually accomplishes precisely the opposite.

However it is not difficult to see how this could cause problems. An over-reliance on important-sounding buzzwords could cloud the actual issues and make it much harder to identify and tackle them. The appearance of doing something becomes more important than actually doing it- a recipe for disaster.

In the long run, more energy may be expended on perfecting this management-speak to the detriment of finding and implementing actual solutions and inertia could kick in. Words and not actions will become the more fashionable way to tackle problems and needless to say, this would not be a welcome phenomenon. British comedies like ‘The Thick of It and Yes Minister’ have played on the paralysis that may affect institutions which are too reliant on buzzwords and sound bytes to get work done. The audience might laugh, but the laughter is tinged with discomfort. It would be no laughing matter if our decision-making mirrored that of British comedy. As the country stays on course for Vision 2020, we should be wary of reaching a point where style triumphs over substance. Sadly at the current pace, we could well be getting there.