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.



Leveraging the East African market through trade and investment.


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).

Micro Solutions for Macro Problems

There are few people who can be as self-satisfied as Muhammad Yunus. When he goes to bed at night he basks in the glow of his overall goodness, he must look at his family, Nobel peace prize and his billions of dollars and think life is good. His story is the greatest vindication of capitalism which so often is derided for exploiting the poor; he has proved that you can help the poor and make billions. His Grameen Bank started in 1976 in rural Bangladesh with only $27 in capital but now has distributed $6.5 billion in loans.

His business is the template for aspiring micro-credit businesses worldwide including those in Rwanda. In the years following independence, African countries borrowing billions of dollars for huge white elephant projects that were expected to kick-start our economies in the Keynesian model but alas this did not happen. It is only now that we see that the money would have been better spent if it was used for micro-credit. People are better at assessing their priorities or problems and more efficient than government bureaucracies, which due to their size and nature are slower to react to events on the ground.

The top-down model (trickle-down) has been proved not to work so bottom-up models are required, there will still be need for top-down leadership from the government but bottom-up solutions are more democratic, efficient and always have the support of the end-users. Micro-credit exemplifies this ethos, helping people to help themselves and letting them pull themselves out of poverty. Micro-credit is the solution to some of our problems but it has to follow strict rules in order to succeed.

Firstly the company lending has to think local and be in sync with its clients who are often poor. The firm has to abandon all the precepts of large-scale banking such as looking for wealthy clients and charging higher rates. The profit motive must be there otherwise the whole system will crash but the costs must be low and the lender must be sensitized to the problems facing the debtor. Likewise the lender will benefit by knowing the opportunities in the market as well as the pitfalls. Local issues occur independently of global issues; for example a drought in a particular district can lead to economic collapse while the next district is unaffected. Multinationals have the motto “Think global, act local” but in micro-credit it is “Think local, act local.

Secondly the sums lent must be small, in order for the client to be able to repay, for example people sometimes use a goat as collateral because it is the most valuable thing they own. This helps the micro-business to grow organically due to good management and not because of high start-up capital. This also helps limit the risk involved and lower sums mean that you can lend to more people. Micro-credit must help the society in general not single individuals as businesses need to develop alongside their markets. The small sums highlight the fact that micro-credit is needed just to kick-start businesses, sometimes people need as little as $10 to start a business but even that is beyond the means of many people in poverty. This also means that a successful business can be out of debt in a matter of weeks if all goes well unlike firms who borrow larger amounts and can be in debt for years. This also helps turnover money quicker because the quicker they pay the quicker they can lend somebody else.

Thirdly support must be given to the client, it is not enough to just give them money, you have to give them skills, moral support, more time to pay if necessary and help develop symbiotic relationships. It is not the lenders interest for the business to fold and everything must be done to help them. Nobody ever has the whole answer; local knowledge must be added to modern business practices to produce a dynamic system to deal with problems. Education must be very important to the lender and vocational skills must be imparted to borrowers. If the population is better educated then it more likely to succeed, issues like resource management are important because these are often rural areas in delicate eco-systems. The projects must also be sustainable, not only in the environmental sense but economically and socially. Local customs and traditions must also be taken into account.

Lastly, women are the key to the success; in their role as primary care givers they are more likely to spend money wisely. Yunus saw women as the key his success, the same applies to Rwanda where women underpin the rural economy. If a woman is educated then her children are more likely to be educated, and if a woman is economically self-sufficient then her children will be as well. This was seen first hand in rural Rwanda when micro-credit was first introduced, the loans were given to men as they were the head of the family according to tradition but the money often ended up paying for local brew and increased alcoholism. Women however were seen to be more sensible in their handling of money.

In the absence of banking for the poor, or the just generally disadvantaged, micro-credit can fill a void that established banks have left behind. There still needs to be serious regulation of these firms to make sure they are not charging extortionate rates otherwise they can end up just being loan sharks.

The hardest part of banking is scrutinizing the character and determination of the borrower to pay, when someone is borrowing they always promise to pay but circumstances dictate whether they will. Close community ties make it easy to keep track of debtors. Micro-credit develops in conjunction with the needs and aspirations of a community; for now people want money to buy a goat or heifer but eventually they will need money to buy computers or cars. Micro-creditors have to stay in sync with their clients and think like they do no matter how big they get. They can provide micro-solutions for the global problem of poverty, one person as a time.

By Rama Isibo


This New York Times blog is a delight to read even for people who are not particularly enamored with business and economics. If you think economics could never be fun or ‘hip’, this site will prove you wrong. Written by Steven Leavitt who wrote the massively popular book ‘Freakonomics, it looks at the more unconventional side of economics; written with wit and genuinely fascinating, Business Rwanda highly recommends it.

This is another fascinating blog in the same vein as the one above though this one is more link-based. There are dozens of links everyday on major developments and studies in economics, trade and finance and it is almost always illuminating. It’s a great way to be at the cutting-edge of modern economics.

The Economist magazine is widely known as one of the major authorities on world business but sadly many of the articles on this website cannot be read without a subscription on their website. This is why their blog ‘Free Exchange’ is highly welcome and gives the magazine a chance to tackle all the crucial issues in a more informal way.

This is the website for the Financial Times newspaper, possibly the media source which has the final say on all things financial. It covers the markets and most business stories comprehensively although those who do not fancy themselves as experts will find the lingo and the dry academic prose a bit heavy to deal with.

This is the business section of the acclaimed British paper The Times. It’s mainly centered on British business news although there is a world business news section.

The Time magazine website has a business and technology page which is comprehensive and it offers fascinating interactions between business and politics in many of its comment pieces. This is a handy guide.

Mentoring: Ascending by Alliance

If necessity is the mother of invention, collaboration has made the world’s biggest corporations. Throw a bunch of smart folks in a room and watch the magic happen.One-man shows don’t have that luxury. Theirs is a slow and solitary climb through an onslaught of challenges, from serving customers to buying cash power. While small-business owners value their independence, they also forgo the benefits of teamwork and camaraderie enjoyed by larger business concerns.

However, you don’t have to go it alone. There are plenty of friendly experts to lend a helping hand. You just need to know where to look.

There are three main types of helping hands; mentors, who are seasoned industry veterans with helpful war stories, advisers, with professional expertise in different areas who can brainstorm growth strategies, and coaches who pretty much act as cheerleaders to help ignite the spark in your spirit when it is flickering. Each relationship brings its own set of opportunities and challenges.

Mentoring is a process, not a flurry of calls when times get tough. While these relationships can evolve informally between friends or like-minded peers, mentoring is fast becoming a formal business arrangement–with regular meetings, goals and expectations spelled out at the onset. However, if you don’t truly connect with your mentor, no matter how smart or informed he or she seems, forget it. A good relationship with a mentor is essential.

When searching for an advisory board, be sure to enlist the help of as many influential industry experts and service providers as you can find. Although many may decline, you will still be shocked by the high caliber of professionals who will agree to help your business, especially if you offer a small equity in the firm.

Advisers can have big egos, so beware of the Peacock Syndrome. You will probably spend the first few meetings feeling each other out and listening to them touting their own accomplishments, but when they roll up their sleeves and get to work, you will be surprised by how much gets done is a very short time

Sometimes it’s the soft skills that matter most. So if your firm is having some internal communication problems, for example, senior management may be frustrated that targets are not being met and the employees may feel that they are not sufficiently informed of what is expected of them. In situations like this, a coach may be helpful. Just a few days of coaching can make a measurable difference. The new skills should be carried over outside the company and can improve the way people communicate with their customers as well. There can be tremendous benefits.

One critical aspect about coaching, or enlisting any outside help for that matter, is if leadership doesn’t show that they buy in, you are wasting time and money. Employees may feel threatened that the process will put the spotlight on a personal weakness. If the senior leaders are willing to take the same risk, employees are more likely to buy in, and the process will be far more effective.


By Rama Isibo African economies have had varying degrees of success in adapting to the modern business world. During the Cold War, when billions of dollars were propping up dictatorships, there was little need for internal competition. Our economies were centrally planned with fixed exchange rates, prices and state-run monopolies given free reign. November 1989 and the fall of the Berlin Wall changed that. African nations went from being erstwhile allies to being a drain on resources of their previous patrons. All the aid was cut, our massive debts were called in and the true state of our financial dependence came to light. Suddenly the West trumpeted two things; DEMOCRACY and FREE TRADE. 

All African nations, without exception, went through turmoil for the next decade as the previous system was replaced with a more progressive one. Privatization, liberalization, deregulation, and diversification were all policies promoted by the IMF and World Bank but were not entirely understood by the governments implementing them. They were seen as a necessary evil or a precondition for aid, therefore the bitter pill of restructuring was just swallowed without realizing the benefits of liberal trade.  

In Africa, and Rwanda in particular, competition is sometimes taken as a personal affront. In a country where monopolies ruled until very recently, business rivalry extends to personal enmity. However, competition is a central pillar of capitalism. It encourages efficiency, innovation, high productivity, lower costs and, according to microfinance experts, it is the best way to distribute resources. 

The monopolies of old gave way to oligopolies with just a handful of players determining the structure and costs of a given industry.  This can lead to a cartel situation with price-fixing. A cartel is an unofficial agreement between rival firms to create and maintain a status quo, the exact opposite of competition, and the customer is effectively held hostage to the whims of the cartel. The basic rule of competition is the more players the better, but there has to be a balance in market share, for example if MTN wanted to take over Rwandatel it would have an unfair advantage in the telecom industry and the customer would be subject to monopoly.  

Rwanda needs to develop competition in 3 main categories. 

Direct competition – this is where similar products compete against each other, such as Coke and Pepsi, Huye and Nil water, Primus and Bell Lager. The variety of similar products and brands means better choices for the consumer. 

Indirect competition – this is where different products perform similar functions but are in competition.  For example, when a consumer has a choice between a soda or tea.  These two products both quench thirst but are different.  In China during the launch of Coca-cola it was noted that traditional Chinese tea was the main rival for consumers and not other colas.  

Budget competition – this is when products compete on price and a share of the budget. For example, someone with an income of RWF 300,000 can have a choice of buying a car or a computer or spending it on socializing.  Here, three different products and activities compete for the same money.  

These are all forms of competition that Rwandans sometimes dislike, despite it being the key to success. Talking to Rwandans, you hear the same story every day, of how they came up with a brilliant idea and somebody came along and stole it.  Rwanda is still a virgin land with enough room for everybody, and the fact that someone is doing something similar should not discourage an investor. Imagine competing in a 100 meter dash without competition to spur you on.  You could crawl to the finish line the next day and still win.  However if there is a cash prize and several hungry rivals, then you would have to put your best foot forward. Alternatively, if you were racing against fit athletes then you would have to get yourself into shape.  

Competition spurs innovation as companies try to stand out from the crowd.  Better services and competitive pricing are results of this but competition in supply is equally important. In the field of manufacture and export, it is important to have multiple sources of supply. 

When the opening up of the East African Community is fully realized, a number of Rwandan companies will struggle to compete with their more dynamic and experienced rivals. The fact that few Rwandan companies look outside of Rwanda does not bode well for the future. When Kenyan, Ugandan and Tanzanian firms enter our free-market we will be swamped. Rwandan firms have to devise strategies to tap into neighboring markets or face extinction.

We need external as well as internal competition, as both are important. This idea was first introduced at General Motors in the 1920’s by Alfred Sloane. At a time when Henry Ford had cornered the car market with his mass-produced and affordable cars, few firms could compete with Ford’s assembly line and efficiency. General Motors went ahead and introduced internal competition to bring up the standards.  Departments within the company were in competition with themselves. This happens in Rwanda too.  Primus and Mutzig are made by Bralirwa but are competing for market share. The world of sales is based on this idea.  Performance is based on the number of sales made. 

Competition needs proper systems analysis, with adequate data collection and analysis to determine performance weak spots. Key performance indicators are important in quantifying and qualifying success. For example, a baker could see a rival baker doing better so he would have to ask the following: 

  1. How many loaves is he baking? CAPACITY
  2. How much does it cost per loaf? COST
  3. How much time does it take to bake a loaf? EFFICIENCY
  4. What is the quality of the loaf, can he increase it? QUALITY CONTROL
  5. What is he doing to market his loaves better? MARKETING
  6. What does the rival baker have that he does not? COMPETITION
  7. What other products can he make to supplement his revenue? INNOVATION
  8. How many people is he using? PRODUCTIVITY

All these apply to any business, be it IT or baking.  The service sector in Rwanda is lagging behind all others due to lack of competition. My favorite Kinyarwanda saying is “Ushaka’ inka aryama nkazo”:  “If you like your cow, you sleep like it does”. Which essentially means you would do anything necessary if you really need something. 

Rwanda needs to get competitive to survive in the global economy. If we really want to succeed, then we have to get competitive, with each other and within ourselves. We should emulate that with profits.  Striving for perfection is an endless pursuit and staying in the comfort zone will not help us achieve that. Competition is the way forward, so let’s move forward.

TIPS FOR THE ENTREPRENEUR: Setting just the right price

TIPS FOR THE ENTREPRENEUR: A Few Tips on setting just the right price

Too bad setting prices is one of the most critical challenges faced by any entrepreneur assuming you have a product worth selling, price is the biggest factor that affects the success.

While big companies can afford to millions to run sophisticated tests in multiple markets, small shops have to rely on less perfect information. Continue reading