A LINK TO THE BEST BUSINESS AND ECONOMICS ONLINE RESOURCES

http://freakonomics.blogs.nytimes.com

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.

http://www.marginalrevolution.com

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.

http://www.economist.com/debate/freeexchange

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.

http://www.ft.com/home/us

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.

http://business.timesonline.co.uk/tol/business

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.  

http://www.time.com/time/business

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.

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KIGALI CITY- ONE HUNDRED YEARS OF GROWTH

Kigali, population one million people, capital and gateway to the Republic of Rwanda, is a city on the move. From it’s founding as a sleepy colonial outpost in 1907, with few links to the outside world, to its metamorphosis into the city that is the economic, cultural, and transport hub of a vibrant Rwanda; Kigali is a city that has famously kept its residents on their collective toes.  The residents of this wonderfully alive city are celebrating a century of its existence and Business Rwanda is proud to be a part of this celebration.  Kigali isn’t a city that’s only going through the motions. It has prevailed against the odds and has grown into a modern metropolis; the heart of the emerging Rwandan economy and the pride of every Rwandan.  Kigali City, founded by Dr. Richard Kandt, representative of the “Deutsch Ostafrika” in Rwanda, in 1907, was at first just Dr. Kandt’s residence and a few commercial houses on the lace of hills around present day Nyarugenge.  Then, in 1921, Kigali became a Belgian colonial administrative centre. The capital of pre-colonial Rwanda was the seat of the Mwami in Nyanza, while the capital of colonial Rwanda was in Butare, then known as Astrida. Butare was initially the leading contender for capital of the newly independent Rwanda, but Kigali was chosen to be the capital in 1962 because of its central location in the heart of the nation.  

As the seat of government of the newly independent Rwanda, Kigali saw incredible growth. From being a miniscule eight hectares in 1907, and with a population of three hundred and fifty seven people, Kigali has grown to be an impressive seven hundred and thirty square kilometers with a population of one million people. Kigali City has had its ups and downs as a capital, following the turbulent times of post-independence Rwanda. It reached its nadir, as did the whole nation, in 1994, as its boroughs rang with gunfire and the stench of death hung in the air like a blanket.  

But no more; for as the country recovered, so did the capital. The scars of that period are fast healing and the city is now being given a clean bill of health by its residents and visitors. It went from being a sleepy city at the heart of a regional backwater to being the exciting centre of an emerging Information Technology hub.  From being a city with small, and slightly dilapidated structures, it went to being a city of towers and skyscrapers.  From being a boring place with no nightlife to speak of, Kigali is now a night owls’ favorite haunt.    

Kigali, which has grown more than six times in square area and trebled in population since1996, resembles a quickly changing mosaic. The tallest building in town back in 1994 was a tie between ‘kwa –Rabangura’, as the tall building right next to the now defunct central taxi park was known as locally, and CND (now the Parliament buildings). Now, Centenary House and the Ecobank Headquarters tower over Kigali’s city centre. 

Anyone coming back to Kigali after more than five years away will be amazed at the changes. From 2002 to date, Kigali has seen the building of the first five-star hotel in Rwanda, the Kigali Serena, the Union Trade Center-a huge shopping mall right in the centre of town, housing projects like the Gacuriro estates and many office buildings.  Kigali resembles one big construction site. 

Kigali is a city of business. If you have doubts, then travel along the streets and watch residents as they go about their business. The hustle and bustle on the streets of Kigali is reminiscent of the forward-looking city it is and not the sleepy hollow it once was. Kigali is the headquarters and home of all the major economic players on the local scene; from MTN Rwanda, which is housed in the suitably named MTN Center in Nyarutarama, to Banque du Kigali- which has just moved into its opulent new headquarters. In the pipeline is an international conference center that will rival any in the region, a permanent Exposition Center and many more facilities that are pro-business. Rwanda is open for business and Kigali is its gateway.  

Kigali is a city of leisure. Have a meal at one of the numerous cosmopolitan restaurants- with menus as diverse as Mexican and Senegalese.  Sip refreshments in one of the many cafés and bistros in town.  Enjoy the nightlife in the many nightclubs that cater to various tastes in music. Where once there was nothing to do as soon as the sun set, Kigali is now a 24-hour city. Unlike many big cities of the world, Kigali is famous for its security. Crime rates are negligible no matter where you are, and the only unpleasantness that one might encounter on an evening stroll may be a street child asking for spare change. Muggers and other criminals of their ilk are a rare breed in Kigali.  

One of the slogans that Kigali has made its own is “Clean and Green’. The typical image of an African city, with the omnipresent Marabou Stork perched atop piles of rotting waste right in the center of town, uncontrolled traffic jams, chaotic public transport systems and the smell of general decay, is an image that Kigali city  has fought a winning battle against. Recently the International Telecommunications Union’s secretary general, Hamadoun Toure pronounced Kigali the cleanest city he has visited. Essential services work. A steady supply of piped water and electricity is something that many of Kigali residents take for granted. Roads aren’t full of potholes. 

However, it isn’t all rainbows and sunshine. True, Kigali is slowly coming into its own as the modern capital of the ambitious country that Rwanda is. Nevertheless, in the course of rousing itself to take its place in the sun, the city must rise to many challenges in its path.  

Some of the biggest challenges that city planners have to deal with are the lack of a proper citywide drainage and sewage system, the lack of sufficient landfill space, the poorly planned housing, the lack of green spaces like parks and the deficiencies in coverage of essential services in certain parts of the city. City authorities are not oblivious to these challenges. According to the Kigali City Councils’ Director in the Department of Inspection, Mr. Reuben Ahimbisibwe, in an interview with Business Rwanda, the city authorities have put in place a 50 year Master Plan to find solutions to the needs of the growing city. This Master Plan will include green zones, demarcated roads and sufficient street lighting.  

When quizzed about the urgent need of a citywide sewage and drainage system Mr. Ahimbisibwe spoke of a Sanitation Master Plan that will be completed this year.  This sanitation master plan will then guide the City Council. However, until the introduction of a city-wide sewage system, the City Council has made it compulsory for anyone constructing a large building to include an in-house sewage treatment plant. City Council has, in order to fight against the lack of affordable housing for low and middle-income earners that gave rise to small, dinghy and unplanned-for housing, started constructing what they call the ‘Batsinda Project’, 250 well-built and affordable houses for low income earners in lower Kiyovu. These houses will eventually number one thousand. All in all, Kigali City Council is, in Mr. Ahimbisibwe’s words, making sure “we don’t repeat what we inherited”.   

These various master plans are a positive step.   However, if most of these problems that Kigali faces aren’t solved, the progress that Kigali has registered in the last century will be for naught.  For a city that doesn’t provide a positive environment for both the business and pleasure of its residents and visitors is one that will stagnate and eventually die.  

If Mr. Richard Kandt somehow came back to life and took a look at the new Kigali he surely wouldn’t believe his eyes. When Business Rwanda surveys the progress made since 1994, we know that it can only get better. HAPPY 100TH BIRTHDAY KIGALI! MAY YOU CONTINUE TO RISE AND SHINE!  

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.

COMPETITION: QUASH THE FEAR

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.