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.

A WEAK DOLLAR- THEIR MONEY, OUR PROBLEM

A former US Treasury Secretary coined a phrase that stuck when asked what his government would do about the weak dollar; “it’s our currency but it’s YOUR problem”!

That pretty much sums up the situation today. The US dollar has hit a recent low against the Euro and the Pound Sterling but the US Federal Reserve Bank is none too concerned as it concentrates on warding off the impending recession and credit crisis. This is a complex situation that is as much beneficial as it is dangerous for the American economy.

A weak dollar makes American exports more affordable but it increases the price of oil and hence ultimately all goods. The dollar is not just the currency of America; it is the currency of the world much like the ancient Roman Sistirci or the Pound Sterling of years ago.

The world economy moves in sync with the US economy; when it’s in good condition so are we. When the Americans sneeze, we get a cold; we are all interlinked in the globalized economy where no man is alone. The dollar has been on a downward trajectory for more than a decade.

As a result of the rise of China, American Treasurers have sought to lower the value of the dollar in order to compete with Chinese exports, which are made at a fraction of the cost of their American competitors.

The US in the nineties found its manufacturing sector losing out to its Chinese counterpart while its economy became weakened by home industries relocating to cheaper locations like Vietnam and Mexico. Though the American exports could compete in terms of quality when it came down to just cost they were outdone.

When the former Chairman of the Federal Reserve Bank at the time, Alan Greenspan, one of the greatest economists of our time, moved, markets jumped. He watched, year after year, as the dollar slid against all major currencies leading to people assuming this was actual policy. For, it was assumed, the maestro would have acted if he thought that it bad for the economy.

Now retired, Alan Greenspan has since predicted that the dollar will lose even more value. US exports begun to rise in turn with the dollar falling; now American exports were out competing their European counterparts with British exports suffering the most due to the strong pound.

The weaker dollar saved many manufacturing sector jobs which were being shed as volumes rose while profits remained the same. This led to a large section of manufacturing firms going out of business; this period coincided with the consolidation of the sector as larger firms bought up smaller ones. Once the exports were tied to the lower dollar there was little chance of the dollar rising again.

In most Third World countries the dollar is the unofficial currency, accepted without exception. A number of countries (13) peg their currency to the dollar. Most international commodities are bought and sold in dollars be it oil, steel, wheat, you name it.

Oddly, the majority of dollar bills are in circulation outside the borders of the United States. China is estimated to have more than a $1.43 trillion in State coffers and it is using this war chest to buy influence in the Western economy like its recent purchase of 15% of banking giant Goldman Sachs. The America Treasury isn’t happy about this but is powerless to act as it can not force the Chinese to return their hard-earned dollars.

Money is a curious thing; just a piece of paper that we all agree is worth whatever we say it is worth. Right now the dollar is low but it still has the safest value of any currency. It is all about time; eventually the dollar will rise and some lucky person will have more money than they had before, just like that.

The real problem is not the dollar but the potential recession in the US and the world in general. If there is a global downturn then it will not matter how low the dollar is. The main factor in all this is rarely spoken about; the dollar though by far the most dominant global currency, is no longer the main reserve currency. Central banks now spread the risk by investing in a basket of currencies as opposed to the dollar exclusively. The market has responded to the weak dollar by diversifying into commodities; oil, steel, gold, wheat and even water are at record prices for peace time.

The dollar has wildly fluctuated against various currencies; against the pound sterling it’s almost lost twice its value. Against the Euro, it started on parity when the Euro was enacted in 1999, to $1.48 to the Euro. The most serious deficit is with the Chinese Yuan despite China’s refusal to revalue their currency. The Japanese Yen has also been re-valued and is really high against the dollar adding further pressure.

A credit crunch is looming and a weak dollar might help the situation by softening the impact as billions of dollars are written off in bad debt. It is better if that bad debt is in weak, not strong, dollars. The Federal Reserve under Ben Bernanke has been heavily focused on cutting interest rates to make money available to banks; the weak dollar has been a secondary concern.

Rwandans have been seeing the effects of this weak dollar as the prices of basic foodstuffs and imported goods have been creeping up, the rise of oil prices is another pressure. When one goes to the market you now get slightly fewer tomatoes than you got last month; the tomatoes require petrol to drive them from farm to market and petrol is pegged to the dollar.

Here is a table showing the average price rises of basic goods

Product

Previous price

Current price

% increase

Salt

Frw100

Frw140

40%

Soap

Frw50

Frw100

100%

Potatoes

Frw100

Frw120

20%

Tomatoes

Frw400

Frw500

25%

Beans

Frw300

Frw400

30%

Peas

Frw600

Frw1,000

66%

Beef/kg

Frw1,000

Frw1200

20%

USA oil

Frw2,900

Frw4,000

38%

Basmati rice

Frw5,000

Frw6,000

20%

Charcoal

Frw5,000

Frw5,000

0%

(Source: New Times)

What this table shows is that traders are speculating and increasing prices at a higher rate than the rise of the price of Oil or the fluctuation of the dollar.

When one tries to rent a house is an affluent area of Kigali, the price is up because it is measured in dollars. Anyone involved in import/export is affected, retailers are affected and ultimately customers have to pay higher prices. From New York to Nyabugogo, the wheels of the global economy grind swiftly and affect each other; we are connected and intertwined. The weak dollar is a momentary blip in of a problem; Rwanda will go regardless, as we are caught in a full economic boom. Rwandans will also diversify the hard currencies they use in importing/exporting as the Euro has gained local value. The weaker dollar is better for Rwanda as investors can get more value for money in Rwanda. As inevitably as the sun will rise, so will the dollar, as it will be the world’s premier monetary unit for the foreseeable future.

BRANDING IN RWANDA: AN OVERVIEW

No Logo’, a book written by Naomi Klein explored the way corporations discovered and perfected the art of branding their products. Whether you agree with Klein that the shift towards the brand was a dangerous one or not, it is quite clear that the modern brand is here to stay and today we have the ‘brand’ in a variety of guises all following a similar template of product transcendence.

Curiously, despite a rapidly expanding business sector, branding has not quite taken root in Rwanda. In fact, only a handful of companies could be said to have embraced the power of the brand and the three most successful are familiar- MTN, BCR and Bralirwa

For sheer creativity, MTN reigns supreme. Being a continental corporation, it has had years to hone its craft before arriving in Rwanda, there is no denying that it has taken branding in this country to the next level. In fact, one can say that it gave birth to branding as it exists in the country today. Blanketing the media with ads, sponsoring countless events, setting up attractive billboards with their distinctive yellow- the MTN blitzkrieg has paid off.

MTN are clearly trying to anchor their brand in the mould of a vibrant and feel-good company; young at heart, but a veteran on the scene. Bold without being too brash, MTN tries to impart a sense of joie de vivre and through a plethora of sponsorships and programs, also aim to portray themselves as a caring company. With their new series of ‘GO’ adverts, MTN has shown its philosophical side, the ads are replete with inspirational messages, encouraging people to fulfill their potential and reach for the impossible.

This strategy is not without its dangers, the very ubiquity of the MTN brand does annoy some people and in some quarters, makes the company look like an aggressive invader of public space and the network problems that have plagued them over the last five months have not helped their image either . However, on balance, MTN have clearly been a successful and effective brand and have stamped their image on the public consciousness in a way no other company has managed to do.

BCR have also successfully branded their company and like MTN have tried to showcase their vibrancy. They have also placed an emphasis on innovation, repeatedly launching new promotions and incentives and have, like MTN, successfully straddled the line between coming across as being youthful and yet experienced.

In sponsoring Crossfire on Contact FM, they are also positioning themselves as the bank for the intellectually astute. Added to this package is the extra dimensional, in the form of surreal humor exemplified by the ‘How Do You Eat a Watermelon?’ billboards that have baffled and amused in equal measure.

With those billboards, BCR have signaled a boldness and willingness not to talk down to their market. They appear to have grasped one of the essential tenets of branding- it is not a literal manifestation of your company. If every company limited their advertising to exactly what they were, branding would be a redundant exercise. In this sense, BCR’s watermelon ad was a tremendous trailblazer. It may be too soon to tell how successful the ads have been, but it is fair to say that BCR is taking the art of branding to new and interesting levels in the country. And the mere fact that everyone has been talking about the watermelon ad marks out the campaign as something of a success, obviously the clearest indication of a branding misfire would be facing total apathy from the public.

Bralirwa has also achieved major success as a brand. Using the ‘Billboard Explosion Strategy’, Bralirwa has erected colorful billboards with young good looking people, whose lives seem to revolve around that oh-so-tasty drink. One particular billboard, featuring a woman taking a long gulp of a Coca-Cola, is a brilliant ad: utter satisfaction condensed in a single image.

However it is not all about billboards and soft drinks. Last year Bralirwa launched their sleek, new Petit Primus. Petit Primus was intended to target middle and upper-class drinkers who considered the older unwieldy bottle too cumbersome and suggestive of lower-income tastes. It is an interesting experiment and appears to have achieved a large degree of success so far. Indeed shifting the attitudes of the targeted market so dramatically is one of the most successful examples of branding in the country and is incredibly hard to do considering the task they faced in attempting to challenge people’s deeply held prejudices to one of their products. It also shows that sometimes the genius of branding is that utter simplicity can bring about a huge change, in this case making the product, smaller and more compact.

Yet aside from the big three few others in Rwanda appear to be interested in branding themselves effectively. Some have made partial progress. Rwandair Express has been making some big gains in this regard with their ambitious approach of trying to make the airline the very embodiment of the country’s hopes and dreams. A few others are showing some promise; Rwandatel for example is worth keeping an eye on as it reinvents itself.

However one wonders about the lack of presence of the other brands. Most attempts at branding from local companies come across as either half-hearted or unsuccessful. A good example is COGEAR. They have a catchy jingle accompanying their television ad but the ad itself is bland and, sadly, instantly forgettable.

Radio stations also provide a good illustration of this problem. Most of them don’t bother to create their own niche in the market or target any demographic- they merely play homogenous contemporary tunes and yet even the choice of music could prove to be a smart piece of branding. Likewise many companies are just a mass of indistinct, generic brands making little effort to stand out of the pack. Granted advertising, sponsorship and other methods of branding don’t come cheap, but neither does making your company distinctive name on the market.

Perhaps the underlying cause of the lack of branding is an aversion to thinking outside the box. The same mindset that sees a dozen pharmacies all open side-by-side on a typical street corner in Kigali. It is also likely that many companies simply underestimate the intelligence of the market little realizing that you don’t need a particularly sophisticated market to become a major brand. Advertising, the bedrock of branding, is often experienced at a gut level and few of us would be able to articulate exactly why an ad works for us because it hits us at more than just a conscious level.

It is also likely that many companies just don’t realize the value of branding and think they can do just fine without it. However with competition in all sectors growing increasingly fierce and with an increasingly sophisticated market out there, it is inevitable that branding is going to dominate the future.

By Minega Isibo

Africa’s Complex passage to Connectivity

CONNECT AFRICA 2007, KIGALI

Annita Kabbatende

Long before the African ICT revolution began, one of the biggest problems the continent’s major cities were facing was the high rate of rural-urban migration that had left these scions of national development looking rundown as shanty towns kept mushrooming at an alarming rate.

Despite the detrimental effects this has had on the development of rural areas, it was and still is an understandable trend that truly reflects human nature. From the beginning of time, people have always moved in search of a better life.

At the two-day long Connect Africa Summit held in Kigali, October 29 2007, delegates aimed to mobilize the human, financial and technical resources to close Information and Communication Technology (ICT) gaps throughout Africa.

During the conference, the ensemble of leaders from public, private and financial sectors debated the key success factors vital to advance ICT investment and boost growth in Africa, including the expansion of broadband infrastructures, “last mile” access and rural connectivity solutions, establishing a business-friendly policy and regulatory environment, developing an ICT-skilled workforce and relevant applications and services and striking the right balance between private and public investment.

The aims of the summit definitely had all the actionable buzzwords. However it is not easy to appreciate the enormity of the task ahead of the continent’s leaders in the coming eight years to meet the 2015 deadline for achieving the World Summit on the Information Society (WSIS) goal of connecting all villages, towns and cities of the world.

A look at this year’s statistics on the access to ICTs for Africa shows that, despite the fact that Africa has the fastest growing mobile phone industry, this growth has taken place mainly in urban areas and Africa is still way behind in every other facet of ICT, mobile phones inclusive. The number of broadband subscribers can barely be expressed using a percentage and the total price for 100 minutes of mobile phone use is approximately 77% of the Gross National Income per capita in Africa compared to the world average of 30% and 6.3% in Europe.

With regard to Rwanda, the numbers are shocking. As of July 2007, the International Telecommunications Union reported that only 3.4% of the population is mobile phone users and 0.7% is connected to the Internet. In spite of this, we need to compare these statistics to the statistics showing the number people with running water in their houses or connected to the electricity grid. The numbers are pretty much the same. This poses the question: how are the people in the rural areas going to use broadband infrastructure if they cannot turn on their computers?

If digital and physical connectivity is to reduce poverty, then partnerships between networks must be closely examined so that the resources needed to provide infrastructure services in small and medium sized cities, as well as rural areas are better shared, and the unit cost of delivering these services considerably reduced. Connecting networks such as post, water, power, telecommunication and other utilities in peripheral regions is very likely to trigger unexpected economic gains. As the dot.com crash illustrated, getting the technology right is only half the answer for Rwanda. New business models and financing mechanisms will have to be developed to sell equipment and services to consumers with medium to low incomes.

History has shown that development is driven not so much by government policy but by the private sector, which is usually spurred on by necessity. The Rwandan government has already put the policy in place in the form of its Vision 2020, which, while many times seems to be a vision only for our ICT sector, is actually all encompassing. If there is to be any hope to achieve these goals, private sector needs to move to seize the opportunities that emerge from this vision. As His Excellency Paul Kagame so aptly said, “The barriers that governments put in the path of entrepreneurs need urgently to be removed. Individuals and companies create wealth, not governments. That is not to say that the state should become invisible. But governments should see their roles as enablers of business, and not gatekeepers that control and hamper it.”

The statistics paint a pretty dire situation. However, our private sector needs to take a “glass half full” approach to it. For Rwanda to meet the 2015 deadline there will have to be a massive rollout of infrastructure and this presents the opportunity of a lifetime for local investors.

A look at the pledges made during the summit implies that the funds are plentiful to make significant progress in achieving the goals of WSIS. The GSM association is investing US$50 billion to blanket Africa with telecoms and Internet access over the next 5 years. The World Bank Group expects to double its commitment to ICT in Africa to US$2 billion by 2012, from its current investment program of US$1 billion over the past five years. The funds will be channeled through its three financing arms: the World Bank, the International Finance Corporation, and the Multilateral Investment Guarantee Agency.

This financing is expected to promote private sector participation, while supporting public-private partnerships to address market gaps, with an emphasis on affordable high speed Internet.

In the last 10 years, the private sector has invested almost US$25 billion in Sub-Saharan Africa, representing about one third of all foreign direct investment in the region. In particular, mobile telephony is a remarkable success story in Africa. This is largely due to the opening up of the ICT markets throughout Africa. In addition, it is now predicted that four-fifths of new global market growth over the period 2007-2010 is expected to originate in emerging markets. Investors cannot afford to ignore developing countries and must look to develop business models tailored to meet the needs of emerging market consumers.

The time has come for Africa to catch up with the rest of the world, which may seem like an impossible task, as all the development efforts need to happen at once, as opposed to gradually, like the more developed nations of the world. The Connect Africa Summit attempted to act as a promoter and catalyst for ICT development in Africa by engaging government leaders, service providers and the international donor community to try and find the right balance between public and private investment.

There is no “one-size fits all” strategy to create digital opportunity and effectively use ICT as a tool for development. However, one durable solution to bring our rural areas into the ICT age is to encourage people to see themselves, and more importantly, the societies they come from, as masters of the modern world and not as victims.

How to open up and modernize rural areas is a long, hard and complex challenge. But surely one key is for technology to be seen by these societies and people as a helpful and necessary entity and for the private sector to realize the potential for financial gain in investing in these areas. Fortunately for us, that is one battle we have a chance of winning.

Business Process Outsourcing (BPO) in Rwanda

Business Process Outsourcing (BPO) in Rwanda

 

By Alpha Akariza

First of all it is with pride that we notice our compatriots have not stopped the use of their magic wand to enrich the media output of our a thousand hill country. Business in Rwanda is the latest contribution in this field. This latest contribution to Rwanda’s media is welcomed as a well-timed one.

Rwanda is in a challenging period of its development, in order to achieve sustainable growth, it has to reinvent itself. The Government of Rwanda has embarked on a series of far-reaching reforms with a view to promoting investments and instilling a new business culture. With little natural resource and infrastructural resources, Rwandese can only rely on our minds, how we can develop our intellectual capital and services in order to sell this to the global market. Rwanda could easily break new ground by providing certain services to the global market from the continent of Africa.

Today’s global economic conditions are forcing companies across the world to find new ways of cutting costs. But how do you reduce expenses without sacrificing services? As the cost of business continues to escalate, this question becomes more and more prominent. Companies are looking at Business Process Outsourcing (BPO) as a solution to this problem.

Business process outsourcing (BPO) is the act of giving a third-party the responsibility of running what would otherwise be an internal system or service. For instance, an insurance company might outsource their claims processing program or a bank might outsource their loan processing system. Other common examples of BPO are call centers and payroll outsourcing.

Typically, companies that are looking at business process outsourcing are hoping to achieve cost savings by handing the work to a third-party that can take advantage of economies of scale by doing the same work for many companies. The varying costs of living in diverse geographical regions dictate that labor costs will equally vary, creating an opportunity for companies to save on labor costs through off-shoring.

In exchange for the potential cost savings, the company in question must relinquish control over an aspect of their business which explains why business process outsourcing is often reserved for non-critical, non-core type of work.

Rwanda is a prime candidate in this business arena due to due to factors like language skills, time zone/geographical location and an underemployed workforce with resulting low labor costs. Rwanda is rapidly producing French and English speaking professionals in various fields including engineering, ICT, financial management and accounting.

With a global services sector which is facilitated by information communication technologies and Rwanda’s competitive labor costs, off shoring activities can be scaled up and the nation can position itself in niche markets of the global sector. The key vertical market niches Rwanda could focus on include coding, billing, data processing and customer contact processes. Rwanda can eventually serve as an off shoring hub for countries in the West by starting off as a third-party or subcontracting hub for more established off-shoring destinations like South Africa in particular.

Investment in IT-enabled services sector is a key factor that can potentially transform what the Rwandan economy has to offer the global market. Business Process Outsourcing ((BPO) is the catch phrase of this business, it is the delegation of one or more IT-intensive business processes to an external provider that in turn owns, administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry

South Africa and Egypt are the largest African players in providing services to the global market. One foundational aspect for growth in this field is the government support in terms of investment and proving BPO policies. Egypt and South Africa have the benefits of large populations of about 75million and 45 million respectively, with a huge talent pool of professionals that is boosted by a high language quality and variety that includes Arabic, English and French. This aspect can particularly favor call centre services to different destinations provided there are competitive telecommunication rates. Mauritius, Botswana and Kenya are also competitive destinations for outsourcing companies.

With Rwanda’s growing financial services sector and growing tourism industry, the country can scale up agent positions for BPO services. This will ultimately require investment and development in infrastructure, telecommunication services, human resource capacity and provision of a stable business environment.

 

Rwanda’s path to prosperity

Rwanda’s path to prosperity

By Doreen Kagarama

Growing up in exile, I formed images of my motherland but when I first came to RwandaRwanda was devastated. From the damaged infrastructure and bullet ridden buildings, it was obvious Rwanda’s economy had collapsed beyond repair. However, something deep inside told me the struggle was not over.  It had just changed from struggle for peace to struggle for prosperity. in 1995, what I saw was in sharp contrast to all I envisaged.

Twelve years later, Kigali’s skyline is gloriously speckled with numerous multi-storied buildings; among them the recently inaugurated Union Trade Center. As the city evolves, so do the cultures of the Kigali city dwellers; Rwandan holidaymakers are visibly excited about yet another new place to ‘hang out’ while young professionals are eager to indulge in the ‘finer things in life’ like glossy magazines, sea food, French wine and much more from the unlimited choice of products available at the city’s largest shopping mall. Kigali has indeed evolved from nothing to a blooming metropolitan capital in every sense.

I listen to a distinguished speaker on developing nations, Mr. Michael Fairbanks, address a group of students at the recently refurbished School of Finance and Banking (SFB), I sigh with relief. Rwanda is a transformed nation and her private sector is increasingly playing its role in the struggle for prosperity.

“Prosperity is a choice”, says Michael Fairbanks, a former Havard, Stanford and Georgetown lecturer. Michael’s words resonate with my views. The choice to prosper has already been made by Rwandans, now all that is left to do is address some key factors that will stimulate and sustain Rwanda’s wealth and growth.

Globalization

Globalization is accelerating integration of the world’s economies and societies. Political boundaries are disappearing and costs of communication are rapidly declining. To achieve prosperity therefore, we must understand and embrace globalization.

Already, a lot is going on for Rwanda, coffee and tourism, two of Rwanda’s biggest exports, have captured global market share, Rwanda’s specialty bourbon coffee is fetching higher prices on international markets, discerning tourists are paying $375 to see the gorillas, handicraft is doing the same with the ‘Agaseke’ baskets. Rwanda must take advantage of Globalization to access markets that were previously out of reach.

Value Addition

In his New Year address, President Paul Kagame stressed the need for value addition.  country must seek ways to serve lucrative market niches. This will in turn increase the price Rwandans receive for their products. Value addition requires more learning about customer needs.

Such strategic market research is already available from On The Frontier Group in Rwanda. On The Frontier is the first Venture-backed US firm to focus on developing nations. The organization is presently offering its consulting services to the Government of Rwanda in nation’s tourism, coffee and agro-industry sectors. Information available is in sectors such as coffee, tourism, tea, horticulture, hides & skins and mining. Existing strategies for these industries suggest Rwanda’s export could reach $300 million by 2010 if all investments were made.

 Understand that wealth in the future is based on higher forms of capital

 The time of comparative advantages is over. No nations can create prosperity based on its natural resources alone. New forms of capital include trained human capital, strong institutions, insights and cultural attitudes.

 The past ten years have seen significant investments in training, institution building, legal reforms and a new mindset for Rwandans. At least 32 per cent of private sector firms view human resource capacity and staff training to be their primary challenges in operating their businesses – second only to access to capital.

 The Rwanda Private Sector Federation (RPSF) established nation-wide Business Development Services (BDS) centers to enhance private sector capacities through training, information distribution, facilitating access to finance, and consultative services. Such initiatives must be scaled up.

 Assist the private sector

The government must do everything it can to assist the private sector, except to impede competition.  The private sector needs several inputs to create products. It needs qualified people, good infrastructure and, most importantly, a non-defensive dialogue between the public and the private sectors.

 The government is winning international accolade for its openness to the private sector.  Significant investments are being made in developing required infrastructure and policies have been established that will boost the key priority sectors. Rwanda has created a culture of public-private dialogue through several forums including the National Investment Dialogue, the Public-Private Forum and even industry level workgroups.

 Our moral Purpose: ‘A high and rising standard of living for the average citizen.’

Vision 2020 calls for Rwanda to become a middle income nation with a per capita income of $900.  To stimulate growth, Rwanda’s leadership has prioritized anchor export industries—coffee, tourism and tea.  Given that eighty-five percent of Rwandans are farmers; these sectors provide the most potential for reach the largest cross-section of Rwandans while developing a service component to the economy.

The informal private sector will require a similar focus. Rwanda boasts 70,000 micro and small-scale enterprises. These small-scale businesses are the foremost job provider outside of agriculture.  The country must articulate support programs to support this important component.

As I reflect on the past twelve years, I cannot help but think that slowly but surely Rwanda is winning the struggle for prosperity.

 Doreen Kagarama is the First Secretary at Rwanda’s Embassy in the United States. In the past she has served as a Senior Analyst working with OTF Group, a Boston-based economic development firm advising Rwanda’s Public and Private Sectors on achieving economic growth through competitiveness.