Kenyan Investors pursue Rwandan Opportunities
The Fina Bank, Serena Group, Actis, Pemba Grain Mills, and Kenoil/Kobil are among the lead actors in the steady stream of Kenyan investment materializing in Rwanda. Close to 30 percent of imports and 80 percent of Rwanda’s fuel all come from the East African coastal state. This makes Kenya, Rwanda’s top business partner.
Despite being the country with the widest access to the Rwandan market, Kenya’s pursuit of more opportunities and access remains consistent as Rwanda joins the East African Community.
‘Bigger markets, better bargaining power and strategic location have turned Rwanda into more than just a small landlocked country. The artificial geo-political boundaries are slowly disappearing with the wind. An economic paradise, free from partitioning of common interest is underway.’ Rwanda’s Ambassador in Kenya HE. George William Kayonga commented in a recent interview.
Among the largest acquisitions made during Rwanda’s privatization drive is Serena Group’s lease of the former Intercontinental Kigali & Kivu Sun Hotels, the Fina Bank’s purchase of commercial bank BACAR and Kobil’s acquirement of Shell Rwanda. Last year the Government of Rwanda (GoR) licensed up to 13 Kenyan companies which are going to focus on, among others, the provision of services, energy, power generation, hotels and agri-business.
An umbrella organization, the Kenya Rwanda Business Association (KRBA), was formed to be a forum where the interests and targets of entrepreneurs from the two interdependent countries were helped to be realized. The organization, whose membership is both individual and corporate, has already been launched in both countries. The body hopes to further promote investment and create corporate visibility for members. The organization also seeks to resolve issues affecting members’ interests and enhance networking in the region.
Whereas Kenya remains Rwanda’s largest trade partner Kenya, in turn, looks to Asian for the bulk of its imports. Rwanda’s industrial base remains weak and balance of payments unfavorable. Rwanda import the majority of its household consumer goods from Kenya yet only exports hides, pyrethrum and coffee.
Kenya’s exports currently stand at Ksh13.8 billion against Rwanda’s Ksh1.4 billion: implying that balance of trade is greatly skewed in favor of Kenya. Kenya is also exporting human resources like teachers, engineers and quality surveyors have come to Rwanda to improve the competence of its labor force.
Ambassador Bill Kayonga believes that the issue of trade imbalances will soon be resolved. ‘Joint ventures coupled with this country’s (Rwanda) entry into the East African Community December last year, will help increase investment opportunities and have the multiplier effect improving trade volumes between the two countries.’
“It is cheaper to import Kenyan products because of the proximity and the fewer duties that are paid on Kenyan products especially after the customs rates became applicable,” he adds.
Talking on the free movement of labor, the Ambassador said that Rwanda’s parliament already has the ratification treaty. Thus, come June this year, signing of the treaty will be done and will thus validate usage of East African passports within all EAC member countries. Rwandans will then be able to freely acquire the passports and travel all over the East African bloc in search of employment.
“We are also seeing a growth in the Foreign Direct Investments (FDI) from Kenya which is also covering the imbalance of the imports,” Amb. Kayonga said.
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