Our World. Monday, February 6, Rwanda. The Second Economic

Transcription

1 Our World Monday, February 6, 2017 #Rwanda #RwandaTheWorldfolio Rwanda This supplement to USA TODAY was produced by United World Ltd., Suite 179, 34 Buckingham Palace Road, London SW1W 0RH Tel: +44 (0) Ambitious goals made achievable Rwanda has made remarkable steps following the 1994 genocide. Since the turn of the millennium, when the ambitious Vision 2020 development plan was launched, it has enjoyed stability and average yearly economic growth of 8%, which has allowed it to make some impressive achievements, particularly in reducing poverty, improving access to health and education, and doubling life expectancy. Looking forward to 2020, investments in infrastructure, strengthening the role of the private sector, creating a more competitive business environment and building a regional hub for ICT are amongst President Paul Kagame s main priorities Over the past decade, Rwanda has emerged as one of Africa s most prominent economies, owing to a number of ambitious financial and social reforms which have succeeded in bringing greater prosperity to the country. Such progress has largely been achieved through the East African nation s all-encompassing strategic growth agenda named Vision Launched at the turn of the new millennium, the aim has been to transform Rwanda by the year 2020 into a middle-income country; one in which Rwandans are healthier, more educated and generally more prosperous. It also plans to create more of a knowledge-based society that would after suffering through authoritative rule and ethnic divisions so devastatingly in the past unite its citizens, as well as make Rwanda more competitive both regionally and globally. In order to achieve this, Vision 2020 identified six interwoven pillars, including good governance and an efficient state, skilled human capital, a vibrant private sector, world-class physical infrastructure and modern agriculture and livestock, all geared towards prospering in national, regional and global markets. And so, the Rwandan government went about implementing a series of medium-term strategies designed to provide attainable targets, beginning with the Poverty Reduction Strategic Plan in 2002, followed by the Economic Development and Poverty Reduction Strategy, which ran from 2008 until Today, the country is in the midst of the second Economic Development and Poverty Reduction Strategy, which was implemented almost three years ago, and runs until With 2020 fast approaching, Rwanda is now reflecting on the progress it has made through the vision under which specific goals include sustained economic growth and accelerated poverty reduction to less than 30% of the population, a GDP per capita of $1240, the creation of two million new jobs, ramping up exports and encouraging investment from the private sector. Rwanda has made good progress over the last two decades since the enormous challenges faced in the aftermath of a genocide that destroyed the entire social and economic fabric of the country, says President Paul Kagame, who became leader of Rwanda after the genocide in Rwandans have benefited from rapid economic growth, reduced poverty, more equality and increased access to services, including health and education. More than 15 years into Vision 2020, the development that President Kagame talks of is there for all to see. Out of the 47 indicators in the original Vision 2020, more than a quarter have already been achieved. Rwanda has shot up the U.N. s Human Development Index to top the list of the world s fastest developing countries and rapidly increased its citizens life expectancy in less than two decades from the lowest in Africa (36 years) in 1996, to 63 in 2014 (above the sub-sahara African average). Credit: Flickr Account of President Paul Kagame What s more, the country has halved its extreme poverty rate from 35.8% in 2005 to 16.3% in 2014, including 1 million Rwandans being lifted out of poverty in just five years according to the Rwandan Household Living Conditions Survey. Such improvements meant that Rwanda was able to meet most of its U.N. Millennium Development Goals (quantified targets for addressing extreme poverty in its many dimensions) by In the period between 2005 and 2014, Rwanda also managed to drastically boost its education indicators: its literacy rate rose to 86.2% from 77% and high school attendance jumped to 23% from just 10%. The overall rise in the standard of living in Rwanda has, of course, been facilitated by impressive economic growth. Between 2001 and 2015, real GDP growth averaged at about 8% per annum. Recovering from the 2012 aid shortfall, the economy grew 7% in 2014 and 7.5% in 2015, up from 4.7% in Growth in 2016 is estimated to have come in at around 6%, well above the average for the African region as a whole. In terms of governance, Rwanda is today ranked among the best performers in the Ibrahim African Governance Index (third), while its institutional reforms, decentralization and business sector reforms have also led to high praise from the U.N. and the IMF. The successes come as a result of a collaborative effort between Rwanda and our partners, explains President Kagame. It is a demonstration of what can be achieved when we give value to ourselves and the work we do, when we strive to find solutions from the strengths of our culture. The efforts and determination of the Rwandan people have necessitated revision of our targets upwards to match our growing ambition and to demonstrate our unwavering resolve to make a better livelihood for all Rwandans. As Mr. Kagame indicates, with many developmental challenges still facing Rwanda, the country isn t hanging around to pat itself on the back. Going forward, the private sector, which is still largely informal, will have to play a bigger role in ensuring economic growth, while the government will need to attract better investment in order to improve the country s infrastructure. In addition, reducing Rwanda s dependency on foreign aid (30% to 40% of the budget) through domestic resource mobilization is critical. The Second Economic Development and Poverty Reduction Strategy (EDPRS 2) is a launch into the home straight of our Vision 2020, explains Mr. Kagame. We are faced with new challenges of ensuring greater self-reliance and developing global competitiveness. Conscious of these challenges, we forge ahead knowing that by working together, we always overcome. KEY VISION 2020 TARGETS VISION 2020 TARGETS GDP PER CAPITA OF $1240 AVG. GDP Growth of 11.5% PoVerty reduced to 20% extreme PoVerty eliminated 3.2 million off-farm jobs 35% of PoPulAtion urban exports Growth of 28% P.A. PriVAte sector takes DominAnt SHARE OF INVESTMENT OBJECTIVES RAPID ECONOMIC GROWTH TO MIDDLE-INCOME STATUS INCREASED POVERTY REDUCTION MORE OFF-FARM JOBS, MORE URBANISATION REDUCED EXTERNAL DEPENDENCY PRIVATE SECTOR AS ENGINE OF GROWTH Source: Ministry of Finance and Economic Planning The EDPRS 2 period is the time when our private sector is expected to take the driving seat in economic growth and poverty reduction. Through this strategy, we will focus government efforts on transforming the economy, the private sector and alleviating constraints to growth of investment. We will develop the appropriate skills and competencies to allow our people, particularly the youth, to become more productive and competitive to support our ambitions. We will also strengthen the platform for communities to engage decisively and to continue to develop homegrown solutions that have been the bedrock of our success. The first priority for Rwanda under this home straight, as Mr. Kagame puts it, is to extend reforms to the economy to deliver further growth and provide an environment for service and industry sectors to prosper. Investments in hard and soft infrastructure will allow businesses to operate more efficiently, while domestic interconnectivity is also key. Additionally, the country is improving its external links by building a new international airport, expanding RwandAir, and finalizing plans for regional railway connections. We have numerous investment opportunities across all sectors of the economy for both local and foreign investors, says James Musoni, Minister of Infrastructure. Some of the key infrastructure opportunities include: the construction of the new international airport in Bugesera, the Mombasa-Kampala-Kigali and Dar Es Salaam-Isaka-Kigali/Keza-Musongati Standard Gauge Railway, development of a centralized sewerage system, construction of affordable houses for low- and middle-income earners, high-end housing development, entertainment centers, such as sports and recreational centers, and energy. As we take this important step ahead in our future, let us increase our determination to become makers of history, to shape our development and elevate Rwanda into a new era of prosperity that will be celebrated for generations through our joint efforts PAUL KAGAME, President of Rwanda President Kagame and the Rwandan government are also working on a series of projects to radically reform the economic geography of the country by facilitating urbanization and promoting secondary cities. Six of these communities are being developed to act as hubs of non-agricultural economic activity, with substantial investments in infrastructure being made to ensure they become part of a network that benefits the country as a whole. Issues which are also top of the agenda are the construction of affordable housing, further poverty reduction to below 30% by 2018, encouraging better education, and introducing financial products, services and literacy skills for those in need. Information and communications technologies are also being extended into rural areas to connect the country s population electronically, while on a broader scale, Rwanda hopes to position itself as an ICT hub for the whole region in the coming years. My vision is of an Africa where each city, indeed each village is an innovation hub, forming a constellation. I see Kigali (Rwanda s capital) as one of the brightest stars in that constellation, says Jean Philbert Nsengimana, Minister of Youth and ICT. The ambition is to engage with digital technologies to deliver development, reduce inequality and position Rwanda at the forefront of what looks set to be an increasingly competitive global market place. The country, for instance, has already having signed memorandums of understanding with Chinese companies to create an information superhighway in East Africa. While Rwanda s remaining developmental targets may seem ambitious, President Kagame and the Rwandan government believe that they are also wholly achievable, especially given the track record of past achievements already witnessed under Vision 2020 during the past 15 years. This, says the president, has strengthened the confidence and belief of the population in their ability to deliver on development ambitions. As we take this important step ahead in our future, let us increase our determination to become makers of history, to shape our development and elevate Rwanda into a new era of prosperity that will be celebrated for generations through our joint efforts. A UNITED WORLD SUPPLEMENT PRODUCED BY: Editorial Director: Martin Rodriguez-Villa. Project Director: Anouk Hummel. Project Analyst: Antoine Azoulay. Regional Directors: Fátima Ruiz Moreno and Leandro Cabanillas. Chief Editor: Jonathan Meaney

2 2 Monday, February 6, 2017 Rwanda s economy has taken off over the past decade, and following fundamental changes to the country s regulatory framework, numerous opportunities across communications, power, and transport infrastructure have emerged. Red tape has been cut, corruption has been curbed, and tax incentives have been introduced, creating new possibilities for foreign direct investment in a variety of industries. Rwanda has strong leadership. In terms of trade, the business reports rate us very highly. There is a zerotolerance policy towards corruption. People come to this country because we have created a positive environment. Whether it is for touristic reasons or business purposes, we have created a safe and secure nation, says James Gatera, CEO of investment company, Crystal Ventures. The public office has created an enabling environment for the private sector to thrive. A hand-inhand collaboration between the government and private companies is where the growth comes from. To maintain the momentum of the country s growth, which averaged 8% per annum between 2001 and 2015, the Rwandan government has been enacting policies that will help sustain and increase the country s prosperity in the long term. To date, government policies have reached most sectors of the nation s economy, and have been created with an emphasis on freeing up entrepreneurs, who are now able to expand into areas such as agriculture, textiles and the service sector. Driving these reforms has been the government s Vision 2020 strategy, which has focused its efforts on fueling economic development and diversification by slashing poverty and delivering improved living standards to the country s citizens. The second Economic Development and Poverty Reduction Strategy (ED- PRS 2) has become central to these efforts, with policies and projects across the Reforms boost nation s standing as a top regional destination for doing business Since 2006, Rwanda has jumped from 139th to i e or a s Doing Business Index, and has been the second top reformer over the last 12 years in introducing measures to improve the ease of doing business Tremendous improvements have been made, that we are able to see in different areas, whether it is in governance or in the overall economy. From a business point of view there is a great improvement too, every year we find it easier and faster to do business EUGENE M. HAGUMA, CEO, Horizon Group Rwanda has strong leadership. In terms of trade, the business reports rate us very highly. There is a zero-tolerance policy towards corruption. People come to this country because we have created a positive environment. Whether it is for touristic reasons or business purposes, we have created a safe and secure nation JAMES GATERA, CEO, Crystal Ventures country now being implemented to ensure development continues. The success of Rwanda s regulatory reforms is reflected in its standing on global competitiveness indexes. Between 2006 and 2016, Rwanda jumped from 139th (out for 190 countries) to 56th on the World Bank s Doing Business Index, and is now ranked the second easiest place to do business in Africa. It has been the second top reformer over the last 12 years in introducing measures to improve the ease of doing business, with improved access to credit and more streamlined processes for property registration figuring among the top areas of reform. According to the World Economic Forum s Global Competitiveness Index for 2015/16, it now ranks third in Africa, cementing its new status as a globally competitive nation. I believe that Rwanda has built a very strong foundation to strengthen the institutions in this country, says Eugene M. Haguma, CEO at Horizon Group, one of Rwanda s leading local conglomerates, which focuses on infrastructure development, agriculture and logistics. Thanks to a strong framework and the policies that have been put in place to guide this process and from which institutions are being built, tremendous improvements have been made, which we are able to see in different areas, whether it is in governance or in the overall economy. From a business point of view there is a great improvement too, every year we find it easier and faster to do business. Concerted efforts have also been made to promote regional integration and the development of infrastructure, as well as a new public-private partnership (PPP) law that has upgraded the legal framework to provide more transparency and legal security. The Rwanda Development Board has also been instrumental to the country s recovery by helping to address the needs of the private sector and transform Rwanda into a dynamic global hub for business, investment, and innovation. Over the last decade, Rwanda has managed to consolidate its position as one of the top destinations for business and investment in Africa on the back of one of the fastest growing economies in the region, says Mr. Francis Gatare, CEO of Rwanda Development Board. Charged with helping to position Rwanda as an ally of the private sector, Mr. Gatare is helping to ensure that his country becomes a dynamic global hub for business, investment and innovation. Although since 1995, the country s economic policy management framework has been tied in to providing a haven for the private sector to drive growth, in recent years, investment flows have been especially prolific. Mr. Gatare points out that according to the World Bank, net inflows of foreign direct investment in Rwanda rose from $42 million in 2010 to $323 million in 2014, with global investor s appetites particularly focused on areas such as agriculture, trade, services, infrastructure and ICT. The development of a stronger PPP framework in the country paves the way for further engagement in the provision of critical services and infrastructure in Rwanda, he adds, further underscoring the importance of infrastructure projects and improved transportation networks such as railways that will link up countries such as Tanzania and Kenya, thereby further enhancing Rwanda s position as a vital hub in the region. While it still faces disadvantages such as its small size, lack of port access and limited natural resources, it is compensating for these shortcomings with other advantages, especially in terms of ICT. Indispensable to the knowledge economy, highspeed internet is widely available in Rwanda and 3G and 4G mobile networks are being rolled out as part of eye-catching public-private partnerships with international companies (see page seven). In parallel, this improved connectivity is allowing entrepreneurs and citizens to benefit from being more readily connected with the rest of the world. Banking companies have launched mobile services, thereby driving up the level of financial inclusion, while government processes such as tax collecting are also being offered online, helping to facilitate a more efficient public sector. In parallel, investors have also been enticed by government incentives and global companies are finding that the country provides a gateway not only into the region but also to Europe and the U.S. via agreements such as the African Growth and Opportunity Act or the Everything but Arms initiative. Further boosting the country s attractiveness are the literal gateways that are being provided to Rwanda through the construction of roads and railways. As reported by the Rwandan Minister of Infrastructure, James Musoni, the Central Corridor member states have established the Central Corridor Transit Transport Facilitation Agency (CCTTFA) to expedite the implementation of the Standard Gauge Railway Project. It s expected that the completion of the railway project will significantly reduce the cost of transport of goods, greatly facilitating regional and international trade. To support these efforts, an industrial parks program has been launched that will supplement the ongoing Kigali Special Economic Zone while plans are already in place to further develop the main airport in the country s capital and construct a new international airport in Bugesera. While Rwanda has been actively deploying measures to create a level playground by enabling the private sector and business to thrive, it has also made strides in leveraging its most valuable resource: its people. The country s largely bilingual French and English-speaking talent pool is the key to building solid institutions in Africa, argues Benjamin Gasamagera, Chairman of the Rwanda s Private Sector Federation and Managing Director of Safari Center, an incubation center for business innovations and technology based in Kigali. An institution can only be as good as the people who are part of it, he says, adding that if a population isn t educated, institutions will never be valued or regarded. In Africa in particular, governing organizations have a chronic history of deceiving the population and suffer from devaluation in their governance. Investing in people is the antidote to this disillusionment. Teaching people how to improve institutional bodies so that they feel invested and engaged with them is the way forward, argues Mr. Gasamagera. Over the last decade, Rwanda has managed to consolidate its position as one of the top destinations for business and investment in Africa on the back of one of the fastest growing economies in the region FRANCIS GATARE, CEO, Rwanda Development Board If you look at the size of Africa, Rwanda is but a drop in the sea in terms of space. However, this cou r s commi me to improving its society can create a ripple effect throughout the continent BENJAMIN GASAMAGERA, Chairman, Private Sector Federation and Managing Director of Safari Center We must make people believe in the value of cross-sectorial foundations, he says. If you look at the size of Africa, Rwanda is but a drop in the sea in terms of space. However, this country s commitment to improving its society can create a ripple effect throughout the continent. Making the people believe in the power of organizations is a key factor to success. By enforcing this vision, Mr. Gasamagera believes that African workers will help foster foreign investment and corporate profit. For those keen to invest in Rwanda, he says that the time is right, but it is also time for the country to improve the image it has abroad. Due to Africa s lack of industrialization, Mr. Gasamagera maintains that the region suffers from being looked upon as a group of countries able to provide raw materials only. This is untrue, he says. Rwanda for example is not only well-placed to provide raw materials, but more importantly, to turn those raw materials into value-added goods. Increasingly, the population is coming to understand this new vision of itself, but significant efforts still need to be made. Entrepreneurs and investors alike must lead the charge by forming cross-border cooperation, cultivating new talent, and inspiring Africans to believe in raising the bar. A strong and committed government empowers people to believe in themselves, says Mr. Gasamagera. When you make people feel empowered, they will give you back the gift you granted to them.

3 Monday, February 6, Well-managed financial sector drives country forward e i a a s socioeco- omic pro ress is a s a e a sou fi a cia sec or ic as e o e a era e a ua asse a profi a i i ro of accor i o e o er or of e ce ra a Rwanda is one of the few countries anywhere in the world that has managed fast economic growth, robust reductions in poverty, and a narrowing of inequality. From a country that just 22 years ago was shattered by poverty and despair, it has used resilience, commitment and innovation to become a thriving nation, both socially and economically. Key to this success have been several measures taken by the government to more effectively manage debt and enforce monetary stability by maintaining a flexible yet stable exchange rate. In parallel, the National Bank of US $ Bn Rwanda has strengthened and stabilized the financial sector while helping to urge reforms that attract foreign investment. The country also significantly improved its ratings in the 2015 Corruption Perceptions Index, and now ranks third in Africa and 44th globally. According to Fitch and S&P, Rwanda s longterm foreign and local currency sovereign credit rating went upwards by one notch from B to B+ with a stable outlook, and along similar lines, KPMG reports that Rwanda s financial system remains solvent and with sufficient capital buffers. Governor of the National Bank of Rwanda, John Rwangombwa, says that Rwanda s financial sector is still young but very stable and sound. In terms of assets and profitability, it has been growing at a very good rate, with an average annual growth of between 18-20%. Bank credits towards the private sector also have increased between 18-20%, which has really helped drive investment in the private sector. SOUND MACRO FUNDAMENTALS GDP PER CAPITA CONTINUES TO GROW Mln Population Nominal GDP per capita HEALTHY GDP GROWTH WITH MODERATING INFLATION 2.3% 1.8% 2.50% Taxes less Subsidies on products % Nominal GDP(US $ Bn) Inflation (%) 6.3% MACRO ECONOMIC MARKERS GDP BREAKDOWN BY ECONOMIC ACTIVITY % % 6% % 4.5% Agriculture US $ % 8.0% 6.0% 4.0% 2.0% 0.0% When you look at our monetary policy, it is normally structured in such a way that it supports the financing of the private sector through financial institutions, as we have had relief from inflation pressure for quite some time now, he says. As part of the country s Vision 2020 elaboration, economic stability is an important engine for driving economic development, though challenges remain. Our ultimate aim is to achieve a monetary union with one central bank, one monetary policy, one currency, he says. We have given ourselves until 2024 to achieve this goal. He adds that the government has also signed a memorandum of understanding on currency convertibility, meaning that trade between countries in the East African region will be done using the domestic currency without first going through a hard currency. We want Rwanda to play as an equal partner in the international arena, and we believe it is possible, says Mr. Rwangombwa. When we look at the country s poverty reduction from 60% in 2001 to 39% by the end of 2015, we are given hope that we will soon have no Rwandan living under the poverty line. According to Dr. Diane N. Karusisi, CEO of the Bank of Kigali, Africa s demographics have helped propel Rwanda and the rest of the continent forward. Its large and young population makes it attractive to investors as a potential consumer market, while an increasingly educated and technology-savvy workforce offers an added incentive to investors keen to produce value-added goods and services. Dr. Karusisi underscores that the key to sustaining growth and continuing to attract foreign investors lies in considering Africa as one single market rather than a collection of individual countries. Africans today understand that opportunities are first with our neighbors, she says. We know that intra-africa trade is the lowest when compared to other regional blocks it averages 16%, while it stands at 70% in Europe and 50% in Asia. We need to reduce barriers. In a bid to do just that, Dr. Karusisi explains that an East Africa Community integrated market of more than 150 million people is being developed. As such, investors that set up shop in Rwanda gain access to the Tanzanian market or the Ugandan market and more. In parallel, Rwanda recently re-joined ECCAS, the Economic Community of Central African States. We want to be the hub for people coming from the East to the West of Africa; we want to connect these two parts of the world, the Anglophone Africa and the Francophone Africa, says Dr. Karusisi. Being bilingual and being in the centre of Africa, we believe we can achieve that mission to connect both parts of Africa and trade more amongst those African countries. Also, critical to preparing for a future of greater prosperity is the financial sector, which has seen significant improvements in recent years. But despite being well capitalized, it is still quite small and unable to provide sufficient financing for large projects, according to Dr. Karusisi. Rwanda wants to have a big airport, a railway connecting the country to the region s major ports, but we cannot rely only on Rwandans savings. This is where foreign investors come in because this is the fastest way for us to grow our economy and to reach our ambitions. However, local banks like Bank of Kigali, the largest commercial bank in Rwanda and the first to receive an international credit rating, will continue to support development by investing in Rwandan SMEs and the mortgage market. Today, the bank s market remains Rwanda, financing businesses and people in Rwanda. We believe that excelling in our home market is a prerequisite to do well in the region and beyond, adds Dr. Karusisi adds. We want to consolidate our market leadership by continuing to create value for our shareholders with a return on equity of around 20-23%. Our strategy is to continue innovating and to grow in line with the country s development ambitions. We are developing new services, opening new branches this year to better serve our existing customers but also to grow our customer base. According to another highprofile banker, Robin C. Bairstow, Managing Director of I&M Bank, the Rwandan financial sector is well established and well governed. The industry has grown and, in fact, outstripped its peers within the East African region and across Africa, he says. It has not suffered the contagion of some of the fallout that has been experienced. He adds that currency has remained resilient to external factors, despite high demand; a testament to a well-controlled financial environment. The sector is liquid, well capitalized, and, for lack of a better word, in really great shape. Mr. Bairstow explains that from a business point of view, I&M s decision to enter the Rwandan market was an excellent opportunity to increase its footprint across East Africa, and create connectivity. Being present in Rwanda gives the bank access to trade flows across East Africa Kenya-Tanzania, Tanzania-Rwanda, Rwanda- Tanzania and Rwanda-Kenya. It has allowed the bank to follow a number of clients across the border, from Rwanda into Tanzania and Kenya, as well as Mauritius. This interconnectivity created a major synergy from within the group and provided the welcoming environment that the bank received, he says. He adds that Rwanda has been at the forefront of promoting the freedom of movement across the region by supporting the single East African visa. In terms of the African Union (AU), Rwanda is also now responsible for the supervision of all reforms at the AU level. Mr. Bairstow predicts that the region will grow and become even more integrated with support from higher levels, as is being seen through the president s office. I&M bank focuses on delivering reliable and robust alternative channels such as enhanced mobile banking and electronic banking. It is also working on rolling out a financial inclusion model, which includes agency banking and other alternative banking channels that will require the bank to work more closely with local telecoms companies. Mr. Bairstow explains that one of the major attractions that drew the bank to Rwanda was the pace of the development that is taking place there, the strong focus on governance, and the environment that is being created by government institutions. Just as importantly, he senses that the people he works with in Rwanda have a positive work ethic and he is keen to help develop their potential e ou oo a our mo e ar po ic i is orma s ruc ure i suc a a a i suppor s e fi a ci of e pri a e sec or rou fi a cia i s i u io s as e a e a re ief from i f a io pressure for ui e some ime o JOHN RWANGOMBWA, Governor, National Bank of Rwanda e a o co so i a e our mar e ea ers ip co i ui o crea e a ue for our s are o ers i a re ur o e ui of arou DR. DIANE N. KARUSISI, CEO, Bank of Kigali e fi a cia i us r as ro a i fac ou s rippe i s peers i i e Eas Africa re io a across Africa I is i ui e capi a i e a i rea rea s ape ROBIN C. BAIRSTOW, Managing Director, I&M Bank for the benefit of the region. We want to be in a position where we are exporting talent from Rwanda into the region and into the rest of the diaspora, and we want to see skilled bankers or financiers, engineers, etc. leaving Rwanda and going to work abroad while at the same time extolling the virtues of the country, he says. Governor Rwangombwa is on the same wavelength. I want to create opportunities for our population, he says. We have this belief that as our president always says; despite the challenges we face, when you think big, you always achieve big results. We have opportunities to build a successful country and we must take advantage of them. Other services 15% 15% Trade and Transport Industry EXCHANGE RATE DEVELOPMENTS 15.0% 10.0% 2015 Q USD GBP EURO UGX KES 11.4% 5.0% 3.2% 4.7% 0.0% 0.2% -5.0% -10.0% -7.6% -2.8% -2.8% -2.8% -6.3% -3.9%

4 4 Monday, February 6, 2017 A joint vision for regional infrastructure development Regional allies show there is power in numbers as they combine forces to carry out vital energy and transport projects Rwanda may now be a progressive African leader, but it is not alone on its journey. Mechanisms for greater cooperation across African borders are at last a real possibility. Ironically, in a region of the world where foreign aid has long represented the driving force, this progress is Africangenerated and inward-focused. Countries on the continent are now looking to each other for growth, and it is working. Rwanda belongs to a number of regional bodies such as the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), which is a bigger market by itself, and the Economic Community of the Great Lakes Countries (CEPGL). All these bodies have presented opportunities for member countries to enhance their social, economic and political relations to attain economic growth, says Rwandan Minister of Infrastructure, James Musoni. To date, member countries have responded instinctively to the regional initiatives by allowing free movement of labor, goods, services and capital. It has further created ease of access to market through the creation of customs unions to promote production and consumption of locally manufactured products. Mr. Musoni adds that road infrastructure has been developed to facilitate transport, from Mombasa in Kenya and Dar es Salaam in Tanzania to Kigali, and to open a transit path to the neighboring countries of Burundi and the Democratic Republic of Congo (DRC). The Central Corridor member states have established the Central Corridor Transit Transport Facilitation Agency (CCTTFA) to expedite the implementation of the East Africa Standard Gauge Railway Project. With the northern corri- Member countries have responded instinctively to the regional initiatives by allowing free movement of labor, goods, services and capital. It has further created ease of access to market through the creation of customs union to promote production and consumption of locally manufactured products JAMES MUSONI, Minister of Infrastructure dor, preliminary market-studies were conducted and construction started in Kenya. It s expected that the completion of this project will significantly reduce the cost of transport for both exports and imports to facilitate regional and international trade, he explains. In power, regional alliances are constructing substations and transmission lines that will facilitate power trade and cooperation. The power potential of Lake Kivu, for example, is jointly shared between Rwanda and the DRC, with each country managing half of the lake s 700-megawatt capacity. Sharing resources, as this region of Africa is discovering, makes everyone stronger. National carrier RwandAir continues to expand its fleet As Jean Bosco Mugiraneza, CEO of Rwanda Energy Group, explains: In Africa, we have many energy sources but we are poor in energy supply. The solution to this problem is to share energy resources between countries. To make this happen, he says, the region must put in place basic infrastructure and common networking standards. There are five power plants in Africa that belong to the East African market, and there are other shared energy projects between Rwanda, Kenya and Uganda for the construction of transmission lines and power plants. Transmission lines have been completed from the Ugandan border to Kigali, and lines are being constructed to link Rwanda, the DRC, Burundi and Tanzania. Within the next two years, Rwanda expects to be trading 30 megawatts with Kenya. African leaders understand that there is no way of industrializing the region without common sources of energy. To develop our industries, we must invest in energy sources and we must share our production. Power trade is also key for security and stability. If we have common interests, we will be keener to help each other. These projects are key to developing diplomatic ties and uniting populations, adds Mr. Mugiraneza. The private sector has also been quick to support regional integration and to applaud efforts by government to improve the connectivity that supports business growth. Liliane Uwanziga Mupende, CEO of Ultimate Developers Ltd. (UDL), the company behind Kigali s Vision City, Rwanda s largest residential housing project to date, points to recent EAC achievements in logistics and human capital, as well as in infrastructure investment. Several joint initiatives that have already been successfully rolled out, such as the East Africa Tourist Visa, unified immigration and administrative procedures and online government solutions. Major infrastructural investments made as a region rather than as individual nations such as the oil pipelines and railway, and the creation of onestop border posts are all aimed at making our economic integration easier, she comments, remarking on improvements in the elimination of double costs and in creating simplified business environments. Many companies that are establishing in Rwanda are looking at the entire region as an investment opportunity. At UDL, we are convinced that being successful in the Rwandan market will help us to expand within the entire region. We want to increase our economy s potential. We want Africa to be perceived as a strong cluster, with Rwanda being one of this initiative s drivers. Derek Claassen, Director of Roko Construction is counting on regional infrastructure cooperation to alleviate his business importation challenges. We are hoping these pipelines and the rail system that is now being worked on will be game changers. In East Africa at the moment, in Uganda or Rwanda, you don t have a lot of transport options. There are still constraints in terms of road traffic. Vehicular traffic from South Africa works a lot quicker. We have found, for instance, that certain materials can be trucked from South Africa, which is about four or five days, covering five or six thousand kilometers. Depending on weight and size, we can fly certain items in, but it is hugely expensive as you pay per kilogram. The COMESA initia- African leaders understand that there is no way of industrializing the region without common sources of energy. To develop our industries, we must invest in energy sources and we must share our production. Power trade is also key for security and stability JEAN BOSCO MUGIRANEZA, CEO, Rwanda Energy Group Remarkable results in agriculture, says World Bank After having attained food security in 2010, Rwanda has seen its food exports surge and poverty has been greatly reduced thanks to the advancements in agriculture. It will continue to develop agricultural commercialization through investment in irrigation and mechaniza- io i e a so e coura i e cou r s e repre euria mi e ou peop e o e er the farming business Over the last decade one million people in Rwanda have lifted themselves out of extreme poverty, and much of this immense progress is due to the growth of the country s agriculture sector. Working in hand with the International Development Agency since 2001, Rwanda has made on-the-ground investments that saw the country more than double its production and achieve food security by Nearly 30,500 hectares of marshland and hillsides were sustainably developed, average crop yields on these lands rose by 100%, maize harvests increased from 1.6 annual tons to 5 tons, rice from 3 tons to 6, and potato crops from 7 tons to nearly 20. More than 50,000 new jobs were created. Over 43% of the beneficiaries of these increases were women. The World Bank called the results nothing short of remarkable. It s hard to beat reaching food security in a country stricken by poverty, but the good news only continues. A thrust towards greater commercialization has meant a surge in Rwandan agricultural exports over the past few years. In 2016, exports grew again, by around 16% to reach more than $300 million, up from $259 million in In some cases, farmers incomes have risen by more than 30%. What has this meant in real terms? The combination of greater commercialization and higher yields directly contributed to a 12% decline in poverty between 2006 and Extreme poverty was cut by 14 percentage points. Rwanda has a big goal: achieving lower middleincome status by It is clear to the government of President Paul Kagame that the agricultural sector is absolutely key in reaching this goal. Next up on the agenda, then, is a structural transformation that will foster commercial production powerful enough to create a middle-income economy. Investment in irrigation and erosion control for hillside production has been ongoing since 2010, capacity building of stakeholders across the value chain is in progress, work is being done to promote the emergence of a vibrant private industry for agricultural by-products such as fertilizer and a goal has been set to increase mechanization by 50% over the next four years. Most important, however, are projects for the development of transport and energy infrastructure that will revolutionize market access and rural community life. These projects are needed to transform not only the agricultural sector, but the whole economy. They will facilitate intra and inter regional trade. They are the solution to urbanization and a growing youth population. Greater access to electricity and transportation is the only way to get young workers to stay in rural areas. It will also aid in adding value to locally produced commodities. All these issues are addressed by the infrastructure-transformation agenda. We definitely see them as enablers of agricultural transformation, observes the Minister of Agriculture and Animal Resources, Dr. Gerardine Mukeshimana. Engaging the country s youth is important, agrees George William Kayonga, CEO of the National Agricultural Export Development Board. The agriculture sector today hosts an aging workforce. Our first challenge is to implement strategic operations aimed at attracting the youth, at encouraging them to enter the sector, and not solely for employment, but also in terms of entrepreneurial possibilities, he comments. In the same way that youth are attracted to ICT, there is a need for innovation in agriculture to inspire this growing population. We want to see our young minds engaged in all stages of the agricultural process, from management to primary production, and we must create the innovative techniques and advantageous economic conditions to attract them. Sina Gerard, founder and CEO of the Urwibutso Enterprise food processing empire, says improved transport infrastructure is set to boost his business significantly. In fact, his company is already preparing for it. At the moment, it is easier for us to sell to the European and American markets than the African ones. However, with the

5 Monday, February 6, tive to open the borders more freely for trade will help with a lot of those issues, he explains. Mr. Claassen also believes that infrastructure improvements will lead to the emergence of regional industries to support his business. Cement suppliers and concrete suppliers are moving into East Africa, with large companies like Lafarge, who are now the biggest concrete suppliers in the world, moving in to Uganda and Rwanda. That can and will make life a lot easier, he says. The fact that regional integration is now on the agenda highlights just how far Rwanda has come over the past two decades. Major advances and investment have been made domestically in the development of the country s transport, energy and social infrastructure. The country now boasts one of the densest road networks in Africa with over 12,000 kilometers. Paved roadways in the country have more than doubled in the last 20 years, with hundreds of new kilometers being covered each new year. More than 350 kilometers were paved in 2016 alone. The Rwandan government is also working to boost air transport links, with the expansion of national carrier RwandAir and the construction of a new international airport in Bugesera, which will intially be able to handle 1 million passengers and 150 million tons of cargo. RwandAir is an integral component of the government s Vision 2020, states Jean Paul Nyirubutama, deputy CEO of the airline. By 2020, we want to become a mid-sized airline with a strong global footprint. We want to connect Rwanda with long-haul destinations in Asia, Europe and the U.S. All of that is based on a strong African network. Infrastructure minister Mr. Musoni reiterates RwandAir s important role leading up to 2020, and points out that while Rwanda may be landlocked, it is not air-locked. To transform our country into an aviation hub, we must first develop strong and sustainable aviation infrastructure, he says. RwandAir s fleet is growing and growth will continue up to 2020 with the addition of more planes. This will allow us to serve the entire region and to connect Rwanda to the rest of the world. The construction of the new airport in Bugesera will commence in the next few months and will have other auxiliary services to make it an airport city. Beyond Bugesera, secondary cities are also being constructed to act as hubs for non-agricultural industry development, investment in affordable housing is being made, and power grids and sanitation infrastructure are being extended. Information and communications technologies are also being extended into rural areas to connect the country s population electronically. Perhaps a singular sign of the country s progress is the fact that Kigali now boasts an international-class convention center, along with hotels including a Radisson Blu and a Marriott. Rwanda is a country that is developing at steady pace. We have made some good achievements in infrastructure development, says Mr. Musoni. However, the government is making more efforts in constructing and completing projects in the pipeline and improving the existing ones to reach the desired levels. For example, efforts are being made to ensure universal access to electricity and 100% water distribution coverage, among others, by the year To meet its electrification goals, Rwanda is looking to a variety of solutions including sustainable energy sources, particularly solar. We recognise that as we are yet to explore and produce the natural resources that are beneath the surface, Rwandans can benefit from the energy above the surface of the earth, says Serge Kajeguhakwa, the Chairman and CEO of Energy Resources Petroleum. We have made significant strides in developing our solar and renewable energy strategy in tandem with the government s objectives and will focus initially on solar power through basic household solar The City of Kigali systems, followed by development of mini-grid solutions and then large-scale solar projects. We expect to be able to produce around 50 megawatts from solar energy alone, and have entered into joint-venture partnerships to achieve this target. Electrification coverage jumped 34% between 2014 and 2015 to a total installed capacity of 170 megawatts, and in 2016, goals included increasing this by an additional 70 megawatts, while constructing 835 kilometers of new transmission lines and adding 60,000 new households to the grid. Off-grid solutions supplied electricity to 11,000 additional families in These moves support the government s bid to expand electricity coverage to 75% of all Rwandan households by In our strategy to accelerate electricity access, we have targeted 48% from on-grid solutions and 22% from off-grid solutions, with an emphasis on solar power. Using solar home systems allows us to serve even the most remote places. To this end, the Mobisol project currently under implementation has a target of serving 49,000 households. Combining on- and off-grid strategies will drive electrification like never before, comments Mr. Mugiraneza of Rwanda Energy Group. The two largest independent power producers in Rwanda We started Vision City in Kigali as one of our pioneer projects, but our interest is to start investing in these secondary cities as well. The next step will be to invest within the commercial area of the Muhanga district, as it is strategically placed as a city that helps us to extend out to neighboring countries too LILIANE UWANZIGA MUPENDE, CEO, Ultimate Developers Ltd. are Symbion Power and ContourGlobal, both American. The companies were attracted to Africa by former President Barack Obama s Power Africa initiative, says Mr. Mugiraneza. Investors know that there is no place for trade if there is no infrastructure. If the U.S., China and other countries are investing in our continent it is because they see an immense trading opportunity, he adds. ContourGlobal currently produces 26 megawatts at the KivuWatt plant in Lake Kivu. A second phase of this project will add 75 megawatts. A power purchasing agreement has been signed with Symbion Power, to develop methane gas production in Lake Kivu and Turkey s Hakan has been contracted to construct a peat power plant with a production of 120 megawatts in two phases. There are also 80 megawatts to be added from the Rusumo HPP Project, a regional collaboration between Rwanda, Tanzania and Burundi. Rusizi III, a shared 147 megawatts power plant project between Rwanda, the DRC and Burundi is in the pipeline, and the Rwandan government is also working on a power sharing agreement with Ethiopia and Kenya. We are committed to enhancing regional power trade to meet the demand, and our projections are showing that we will be successful, says Mr. Mugiraneza. Moving forward Growth of this sort has a domino effect on a country s construction industry and Rwanda is no exception. The government s secondary cities program is aimed at providing a balance between the rural and urban poles, and meeting a demand for new housing in the capital that has reached 3,000 units per year. UDL s Ms. Mupende comments, We started Vision City in Kigali as one of our pioneer projects, but our interest is to start investing in these secondary cities as well. The next step will be to invest within the commercial area of the Muhanga district, as it is strategically placed as a city that helps us to extend out to neighboring countries too. People crossing in through the southern border have to go through Muhanga, which has already started to attract regional investments in addition to national ones. She adds that this project, along with subsequent phases of Vision City, offer potential areas for investors to partner with UDL. Roko Construction s Mr. Claassen says his company is also actively seeking new partners as projects across the region ramp up: Construction has grown over the years in East Africa, and the company has grown to the extent where we are turning over about 80, 90, or 100 million dollars at the moment, which allows us to tender only to specific projects. If a project comes out tomorrow worth 820 million dollars, we may not be financially able to get involved in building it, which is why we are looking at joint ventures and at partnerships, and even equity at the end of the day. regional integration efforts that have been developing, this problem will be resolved. It is a certainty that regional businesses will be facilitated, he states. It will help us tremendously because we acquire a lot of our raw materials from neighboring countries, so these projects are a necessity for our operations. Furthermore, the new routes will also greatly increase our export potential. We have recently increased our production capacity so that when these projects are finalized, we will be able to maximize their potential. Exports are the name of the game Agriculture already represents half of Rwanda s exports and output is expected to grow by up to 28% by As regional connections improve, increased mechanization boosts yield and investment in agroprocessing grows in the country, Rwanda s agricultural sector is expecting explosive growth. But, says Mr. Kayonga, the sector will continue to focus on niche export markets. Non-traditional products constitute about 48% of our exports. Rwanda will never be able to compete with big international producers, so we must focus on exploiting market niches. Our products have to be high-end for consumers who are willing to pay an extra dollar for quality. Producing and processing stevia, for example, perfectly fits in our expansion profile. We have identified certain opportunities across different sectorial demands, and now we must engage in deeper value chain analysis to achieve maximum potential, he comments. Mr. Gerard s company, which exports organic fruit, fruit juices, and vegetable products throughout the East African Community These projects are needed to transform not only the agricultural sector, but the whole economy. They will facilitate intra and inter regional trade. They are the solution to urbanization and a growing youth population. Greater access to electricity and transportation is the only way to get young workers to stay in rural areas GERARDINE MUKESHIMANA, Minister of Agriculture and Animal Resources and the European Union, has long been an innovator in product diversification. The company has produced strawberries rather than staple foods and grown fruits new to Rwanda, such as grapes for wine production and apples. Urwibutso also added yogurts, cereal flour and mineral water to its line. But Mr. Gerard s most famous product is Akabanga Chili Oil. Akabanga, meaning little secret, is an extra-fiery condiment that is not for the fainthearted; just two drops are enough to give food a solid kick. Popular in Rwanda, it is also shipped to chili-loving customers in the U.S. and across the world, and is the kind of niche product that Mr. Kayonga says We give a great deal of importance to the creation of new projects. Diversification is key to us. Our company is forward-looking and innovative. We are currently working on concentrated juice for the European market, where there is a high demand for these types of juices SINA GERARD, Founder and CEO, Urwibutso Enterprise can help Rwanda distinguish itself on the global marketplace. The always innovative Mr. Gerard continues to develop new products, while also looking to introduce more of his products to world markets. We give a great deal of importance to the creation of new projects, he says. Diversification is key to us. Our company is forward-looking and innovative. We are currently working on concentrated juice for the European market, where there is a high demand for these types of juices. We monitor Europe s market demand closely. This also helps our farmers. We have agriculture workers who produce the right products, but they do not have the right demand to sell these products.

6 6 Monday, February 6, 2017 Rwanda shifts its focus to manufacturing While Rwanda has long focused on agriculture and services, it is now looking to develop manufacturing, in a bid to lower its dependence on imports, as well as boost value-added exports. Improving infrastructure and regional connectivity, special economic zones, and a capable workforce make it an attractive manufacturing base for both foreign investors and the growing pool of local entrepreneurs R wanda is broadly viewed as an unprecedented African success story following the country s recovery from the 1994 genocide and subsequent emergence as a continental leader in terms of economic and social policy. The World Bank has lauded Rwanda s remarkable development successes over the past decade, which the institution notes have helped to reduce poverty and promote equality. UNICEF also notes that Rwanda is one of few African countries on track to achieve seven of the eight U.N. Millennium Development Goals and also points to the nation s promotion of gender equality, with over half of the Rwandan parliament being made up of women, the highest proportion of female representation in the world. The Eastern African nation s rise to prominence since the turn of the century is even more noteworthy given the factors that would seem set to work against its development. One of the smallest countries on the African continent, Rwanda is also the most densely populated, with a high birth rate and a very young population: around half of the country s inhabitants are aged under 18. It is also landlocked, denying it direct access to the busy shipping lanes of the eastern seaboard. But where some see only drawbacks, others see opportunity and Rwanda prides itself on its entrepreneurial spirit, something President Paul Kagame has credited as being one of the foundation stones of the Rwandan economic infrastructure. There is a wave of entrepreneur passion spreading across youngsters driven by our leadership, says Serge Kajeguhakwa, the Chairman and CEO of Energy Resources Petroleum, a regional heavyweight that supplies black and white fuel products across Central Africa. Today s Rwandan entrepreneurs are driven by the we can do it principle. It is a perfect time to identify talent and to support them in any way we can, whether financially, morally or with training and knowledge. Driving different talents is quite exciting and involving. And Rwanda has talent. Indeed, Mr. Kajeguhakwa points to the reverse brain drain the number of young, professional Africans returning to their countries of origin to help build a brighter future. In the next 40 to 50 years, African human resources will drive global development. With our natural resources and our human capacity, the only thing missing is the will. Actually, believing that progress is achievable is the main challenge to overcome in terms of the image that many Africans have about their continent. The gap must be closed, we must get away from aid, become self-sufficient, and this will only be the case if our young people get properly involved. Although Rwanda has one of the highest GDP growth rates in If the private sector can become integrated across countries in a similar manner to the public sector, its drive would be much stronger. By reducing trade barriers and enhancing cross-border businesses, Africa will pave the way for its private companies to take the lead in terms of integration BENJAMIN GASAMAGERA, Director, Safari Center and Chairman, Rwandan Private Sector Federation Africa, the country faces plenty of challenges still as it seeks to push ahead with wide-ranging policies to increase exports and promote the country abroad, while also reducing reliance on foreign aid and imports as the government seeks to continue its drive to turn Rwanda into a middle-income country by Key to realizing that goal will be the expansion of the country s relatively small manufacturing sector. With so much of the world s natural resources on the continent Africa has always been a shopping destination for the rest of the world. Historically, investment had always come from the international arena but with very little positive impact on the development of the continent for its own people, notes Mr. Kajeguhakwa. It is only natural now that we should seek to develop our own continent and bring it out of the third world. Economic growth in Rwanda has traditionally relied on the services sector and agricultural productivity but the manufacturing sector has generally lagged behind, a panorama that the government is keen to repaint. Manufacturing contributed just 15% to Rwanda s GDP in Rwanda s Minister of Trade and Industry and EAC Affairs, François Kanimba, has set a target for the GDP contribution of the manufacturing sector to reach 20% by 2020 within the framework of the government s second Economic Development and Poverty Reduction Strategy (EDPRS 2) but he admits that oiling the cogs of industry on the ground has proven to be quite a challenge. As part of the government s aim of positioning Rwanda as a regional leader in light manufacturing, the first special economic zone (SEZ) in the country was completed in Kigali to attract investment across a variety of sectors but specifically in agribusiness, information and communications, trade and logistics, textiles, and construction. A second SEZ is planned at Bugesera, a 40-minute drive from the capital, in conjunction with a new state-of-the-art international airport. The new international airport is also part of our vision to make Rwanda a regional conference center and a regional communications hub, says Mr. Kanimba. We have seen more and more private investors approaching us to develop this The C&H Garment factory in the Kigali Special Economic Zone (Photo: UNIDO) PPP, they see a lot of potential to attract investors in the manufacturing sector. We hope this will contribute to our industrialization. The EDPRS 2 program focuses on four main areas that form the government s medium-term platform towards achieving the goals laid out in Rwanda s Vision 2020 initiative: economic transformation, rural development, productivity and youth employment, and accountable governance. The latter point has been one of Rwanda s most eye-catching achievements since the turn of the century, when Mr. Kagame s administration launched a zerotolerance policy on corruption, the bane of attracting foreign direct investment from countries with legitimate concerns about doing business in a region long hamstrung by a far from reassuring track record in terms of transparency. The government s stance on this issue is not just a statement, states Mr. Kanimba. Many Rwandans will confirm that Rwanda has walked the talk when it comes to fighting corruption. Foreign investors in Rwanda often comment that one of the things that attracted them initially is Rwanda s reputation for a low level of corruption compared to other countries in the region. The government s efforts across the board to improve education, infrastructure, and The SME sector contributes over 40% o e cou r s makes up 70% of total manufactured outputs and employs 50% of the total national workforce, making SMEs a key driver of the economy, particularly in the textiles industry, where Rwandan products are already exported to Europe and the U.S. foreign and domestic investment have been praised by the international community and in 2010, in recognition of the country s successful reform and roll-out of its economic policies the IMF awarded Rwanda a Policy Support Instrument (PSI) agreement. In late October 2016, an IMF team traveled to Kigali to carry out the sixth review to date of the PSI agreement and reported: Performance under the program has been strong, with almost all program targets set through end-june 2016 being achieved. Nascent signs suggest that adjustment policies are proving successful at reducing the trade deficit for goods and services, further abetted by the recent completion of several large public investment projects. Among those projects is the ambitious rail network that will link Rwanda with its regional trading partners Kenya, Tanzania, Uganda, DRC and eventually South Sudan. Although a costly undertaking, as Mr. Kanimba notes, the railways will increase cross-border trade and therefore foster more regional inter-dependency and lessen reliance on goods imported from further afield: The East African Business Council estimates that some 70% of all goods consumed in the region are imported from Western countries. The private sector in Africa has always pushed for regional integration, because trade has no boundaries, says Benjamin Gasamagera, Managing Director of the Safari Center and the Chairman of Rwanda s Private Sector Federation. If the private sector can become integrated across countries in a similar manner to the public sector, its drive would be much stronger. By reducing trade barriers and enhancing cross-border businesses, Africa will pave the way for its private companies to take the lead in terms of integration. An overarching strategy by the Rwandan administration to boost exports and promote the country on a global level is the Made in Rwanda initiative, which is based on the precept of tapping into Rwanda s pool of entrepreneurs and providing a platform for SMEs to flourish. Made in Rwanda is not an act of kindness; it s not a campaign that calls for people to buy our local products for the sake of pleasing us, Mr. Kanimba told a seminar on SMEs and financial management organized by the Business Professionals Network in Kigali late last year. It s about developing individuals who produce quality products that ensure customer satisfaction, efficiency and functionality. SMEs are the drivers of the economy. So, the government is banking on the SME sector as the backbone of the economy to achieve sustainable development. The SME sector contributes over 40% to the country s GDP, makes up 70% of total manufactured outputs and employs 50% of the total national workforce, the minister added, making SMEs a key driver of the economy, particularly in One of the key strategies is to make sure we facilitate manufacturers with easy access to fully serviced land at an affordable cost. That is the reason why we are developing a very ambitious industrial parks program, which supplements the ongoing Kigali Special Economic Zone FRANÇOIS KANIMBA, Minister of Trade and Industry There is a wave of entrepreneur passion spreading across ou s ers ri e our ea ers ip o a s a a e repre eurs are ri e e e ca o i pri cip e I is a perfec ime o i e if a e and to support them in any way we can, whether financially, morally or with training and knowledge SERGE KAJEGUHAKWA, Chairman and CEO, Energy Resources Petroleum the textiles industry, where Rwandan products are already exported to Europe and the U.S., with China primed to become a key partner not only in the domestic market but for through-exports to countries across the globe. In order to enhance the competitiveness of the textiles and garments industry, Rwanda has acted with the East African Community to stem the flow of second hand clothing into the region, which represents the biggest obstacle to fully developing the industry. The Made in Rwanda brand was showcased at the second Expo event of 2016, held at the Gikondo Expo center in Kigali in December. Organized in conjunction with the Private Sector Federation, more than 300 local exhibitors were in attendance. Speaking at the opening of the Expo, Prime Minister Anastase Murekezi noted that although export numbers have improved in recent years, Rwanda imported four times more goods than were sent abroad in The journey is a really long one, he added, although Rwanda s trade deficit decreased last year by 5.1% largely on the back of the Made in Rwanda initiative. Rwanda s young population and entrepreneurial drive will remain key to sustaining the growth of one of Africa s most fertile investment grounds. As Mr. Kajeguhakwa puts it: We want to be able to transfer skills on to our people, our youth. In the next 20 years, we will be able to increase local production of goods to the extent that we will be able to reduce imports as much as possible.

7 Monday, February 6, Transforming lives and the economy through ICT Rwanda is quickly expanding its 4G LTE network to reach some of the remotest areas, while Kigali, with its startup incubators and Innovation City, is becoming the tech hub of East Africa. The rapidly developing ICT landscape is vital to the Vision 2020 goal of becoming a middle-income, knowledge-based economy C ashless payment systems on buses, start-up incubators, an Innovation City, a laptop manufacturing facility, and super-fast 4G LTE internet access: these are just a few of the things you may encounter on a tour around the Rwandan capital Kigali, now a thriving African hub for innovation and technology. Rwanda s steadfast economic growth has enabled it to build one of the most exciting ICT landscapes in Africa. The ICT sector contributes 3% to GDP and, according to Jean Philbert Nsengimana, the Minister of Youth and ICT, has enjoyed 25% average annual growth over the past three years, making it one of the most attractive segments for foreign direct investment (FDI). A report released in 2016 by the central bank estimates that, of the $458.7 million of FDI injected into the country in 2014, $116.1 million or around 25% was directed towards ICT. One of the largest foreign investors is Korea Telecom (KT), which in 2013 signed a deal with the government to invest $140 million in establishing a 4G LTE broadband network that would eventually reach 95% of the population. Mobile 4G LTE was launched in October, 2015 by operator Tigo Rwanda. In partnership with the banks and the government, Tigo has used its 4G network as a springboard to launch new online payment systems, supporting the migration to a cashless society. We are expanding in areas that are not part of our core business, such as banking. We also partnered with the government in order to make it possible for inhabitants to pay their taxes through mobile devices, says CEO, Philip Amoateng. Our company is also steering towards the agriculture sector through, for example, the Tigo Payment Solution for Agriculture. Tea farmers in two districts are now paid their salaries in 48 hours, compared to the 20 days previous. In the long run, we want people to stop using physical money, as this costs the government a lot and is not as transparent as digital solutions. We want to achieve a cashless society. Tigo s competitor MTN Rwanda was quick to follow suit, rolling out its 4G mobile broadband services in March, ORN, the wholesale distributor established by KT, provides access to the network to both Tigo and MTN, as well as other operators. We have invested in the densest fiber-optic national backbone on the continent, with more than 5,000 kilometers so far and continuing. In 2017, Rwanda will have a 4G LTE network covering our target of 95% of the population, explains Mr. Nsengimana. A number of countries have taken interest in what has been done until now in Rwanda. The private-public partnership strategy used, combined with building one single wholesale network was the only way to ensure both nationwide rollout and affordability for our people. In July, ORN announced it would slash 4G prices by 30%, which would help to make the service accessible to a greater portion of the We recently partnered with various organizations and the government to create a smart village in Ruhunda, Rwamagana District by providing affordable WiFi for the entire village. The vast majority of a a s popu a io lives outside big cities, mainly in villages. That is why we wish to develop not only the concept of smart cities, but also smart villages PHILIP AMOATENG, CEO Tigo Rwanda population. Meanwhile, U.S. company Vanu Inc. is working with the government to extend coverage to the most remote areas of the country, usually seen as not commercially viable, according to the minister. Tigo is also bringing 4G to rural areas where there is limited to no coverage and wants to support the creation of smart villages. The government promotes ICT, a sector in which we are a key player. We will continue to invest in this market to improve our network, says Mr. Amoateng. Today people are now connected to the world in the most remote places. We recently partnered with various organizations and the government to create a smart village in Ruhunda, Rwamagana District by providing affordable WiFi for the entire village. The vast majority of Rwanda s population lives outside big cities, mainly in villages. That is why we wish to develop not only the concept of smart cities, but also smart villages. Extending access to highspeed internet is vital to the Vision 2020 goal of becoming a middle-income, knowledge-based economy. So too is fostering innovation and startups; and already there are a number of facilities doing just that. klab was set up in 2012 as the country s first tech incubator. Situated on the top floor of an office complex in Kigali, with its coffee shop and foosball table, one could think they had stumbled into the office of any Silicon Valley startup. Here, Rwanda s budding pool of young tech entre- preneurs are working on turning their ideas into viable products and services. klab also host events, workshops and networking sessions to promote collaboration, partnerships, investment and financing. Some projects to be developed at the center include an Android application for watching Rwanda TV and online inventory system software, which was sold to a number of Rwandan organizations. Staff from M.I.T. helped to launch Rwanda s first Digital Fabrication Lab (Fab Lab) in The Kigali Digital Fabrication Laboratory is part of a global community of over 1,000 fab labs in around 80 cities across the world, and gives members access to threedimensional modeling software and 3D printers. Just like klab helped to transform the ideas of emerging entrepreneurs into enterprises, Fab Lab will turn the ideas into usable products which can be produced in mass, Dr. Marie-Christine Gasingirwa, Director General for Science, Technology and Research at the Ministry of Education, told Rwandan daily newspaper, The New Times. Fab Lab could eventually support the Made in Rwanda initiative to manufacture more products and reduce the dependence on imports. This includes next-generation hi-tech products. The Internet of Things is coming, and billions of these devices will be needed here. We either have to accept that these products will all be imported from out of Africa, or built here on African soil. We believe in that second option, says ICT minister, Mr. Nsengimana. The Made in Rwanda tag can already be found on the first domestically made laptops, thanks to Argentinian-Brazilian company Positivo BGH, which set up its 3,000-square-foot factory in Kigali in 2015 to produce the devices. The Rwandan plant is the company s first venture outside of South America as it bids to go global. Aside from supplying the Rwandan government with 150,000 laptops each year, mainly for the education sector, Juan Ignition Ponelli, Positivo-BGH President in Africa, has said he wants to help increase the country s exports by selling the Made in Rwanda laptops to neighboring countries in the East African region and beyond. Kigali Innovation City Positivo-BGH could eventually be joined in Kigali by more high-tech manufacturers. Last year, Rwanda Development Board announced its flagship project, Kigali Innovation City (KIC) which aims to develop a dynamic ecosystem of technology clusters, where companies will innovate and deliver products and services for global markets. The plan has been hailed as one of the key enablers to transform Rwanda into an economy driven by technology and innovation. KIC is inviting global technology multinationals that want to feel the pulse and innovate for the African continent, emerging markets and beyond, says Mr. Nsengimana. There is a limit to how much one can innovate for Africa based in Silicon Valley for instance. Most of the existing problems in Africa and corresponding solutions are usually not what the Western world think. KIC offers different platforms talent development, business incubation, financing, etc. towards the growth of a selected number of ICT clusters that have promise to transform lives in Africa. They include fintech, biotech, smart energy, big data, Internet of Things, cybersecurity, creative industries, amongst others. With an estimated cost of $1.9 billion, KIC will be built on the grounds of the Kigali Special Economic Zone, located 10 kilometers east of Kigali City s business district. The project plans reveal the Innovation City will comprise all elements of a typical urban center including corporate buildings, retail, leisure and sports facilities, accommodation, health care centers and other amenities. Initiatives such as klab and the Kigali Innovation City will definitely benefit the whole country, says Mario Safari Rugambwa, a young entrepreneur who is founder and CEO of Touch Media Design. Rwanda has limited natural resources, but what we have is our people and our knowledge. We have to use our knowledge in ICT to develop our people and our country. Mr. Rugambwa, a programmer and IT graduate of the Adventist University of Central Africa, set up Touch Media five years ago, after having spotted a gap in the market. Five years ago, while I was in university studying information technology, I saw the printing business was very poor, both in quality and quantity. So, when people wanted to print they would go to Kenya, Uganda, Dubai and so on. I saw there was an opportunity and I decided to venture into it and I started Touch Media Design. At the beginning, it was though, but here we are today. Since its inception, Touch Media has grown to offers its clients the largest of which is the Rwandan government a range of design, printing, advertising and ICT services, and is now looking to expand its successful business model throughout Africa. We have invested in the densest fiber-optic national backbone on the continent, with more than 5,000 kilometers so far and continuing. In 2017, Rwanda will have a 4G LTE network covering our target of 95% of the population JEAN PHILBERT NSENGIMANA, Minister of Youth and ICT We are now thinking of opening different branches in Angola, Burundi, Kenya, DRC and Uganda, adds Mr. Rugambwa. I have traveled through the region and saw I can replicate what we do in Rwanda in other markets. Right now, we are focused in Angola; there, I saw, are a lot of opportunities. By 2020, I would like to have a presence in at least 10 African countries. The young CEO names Rwandan President Paul Kagame as his role model. But there is no doubt that President Kagame himself would hope that ambitious and successful entrepreneurs like Mr. Rugambwa will serve as strong role models for the bright young Rwandans developing their ideas in places like klab, Fab Lab and across the nation. Initiatives such as klab and the Kigali Innovation City will definitely benefit the whole country. Rwanda has limited natural resources, but what we have is our people and our knowledge. We have to use our knowledge in ICT to develop our people and our country MARIO SAFARI RUGAMBWA, founder and CEO, Touch Media Design

8 8 Monday, February 6, 2017 Remarkable Rwanda enjoys tourism surge over past decade A land of breathtaking beauty, Rwanda is looking for investors in a number of high-end eco and luxury tourism projects; while also leveraging the opening of world-class hotel and convention facilities to turn the capital Kigali into one of Africa s premium MICE (meetings, incentives, conferences and exhibitions) destinations F rom pristine lakes, misty valleys and rolling green hills, to friendly people and a unique culture steeped in ancient traditions, Rwanda has many attractions. But gorilla tracking in the Virunga Mountains in Volcanoes National Park is the main draw for a large portion of the tourists that visit the country, the number of which has been steadily rising year on year. Rwanda now welcomes more than 1 million visitors a year; and the tourism industry has become the country s largest source of foreign exchange. The Rwanda Development Board (RDB) estimates that tourism revenues hit $400 million in 2016, up from $318 million in 2015, and visitor numbers grew by 4%, up from 1.3 million in Last year s gains can be, in part, attributed to the rapidly expanding MICE (meetings, incentives, conferences and exhibitions) tourism sector. Rwanda held several important conferences in 2016, including the World Economic Forum on Africa in May, which was attended by over 3,000 high-profile delegates; the African Union Summit and Global African Investment Summit, both of which welcomed 2,000 at- The new $1 billion, 5,000-capacity Kigali Convention Center tendees; and the 41st World Tourism Conference in November, which took place at the shiny new $1 billion Kigali Convention Center (KCC). The opening this year of world-class facilities, such as the 5,000-capacity KCC, the Radisson Blu Hotel and the Kigali Marriott Hotel, will help position the Rwandan capital as one of Africa s premier MICE destinations. The 136-room Sheraton Hotel Kigali is also due to open in As a result of the rapidly rising demand from both business and leisure tourists, the number of hotel rooms in Kigali has increased from a couple of hundred in 2000 to over 10,000 today. But MICE tourism is not the only priority for the government to increase revenues. To reach the target of 28% annual tourism revenue growth, it hopes to secure close to $300 million to fund a number of eco and luxury tourism projects throughout the country. Almost half of visitors to Rwanda have an income of more than $85,000, which is why the government has put so much focus on developing the high-end luxury and eco-tourism market. One of the key projects is the Kivu belt tourism master plan. At a press conference during the Africa Hotel Investment Forum in Kigali in October, the RDB said that it wants to leverage the stunning beauty around Lake Kivu in the west of the country, to transform it into a hotbed for luxury and leisure tourism, and announced several investment opportunities in the area. Rwanda is a strategic investment choice primarily because we provide a supportive business environment with all necessary services available online 24/7, the RDB s Chief Tourism Officer, Belise Kariza, told reporters. With tourism being the country s mainstay, the government is a key stakeholder and has taken great care to develop the necessary infrastructure to support the growth of the sector, such as strong roads, water supply and electricity. The key investment opportunities presented included: a hot spring ecotourism resort on the Rubavu Peninsula, an entertainment and leisure complex in Rubavu, a five-star golf resort and residential villas, an ecolodge on Gihaya Island, a premium boutique hotel and tourism center in Rusizi, and the completion of a five-star conference and leisure hotel, also in the Rusizi district. Several accommodation and other tourist facilities will also be needed at the newly opened Gishwati-Mukura National Park. Offering incredible biodiversity and providing a corridor for free movement of primates such as Colobus monkeys, L Hoest Monkeys, Blue Monkeys and Golden Monkeys, GishwatiMukura is Rwanda s fourth national park, and is expected to be another big draw for tourists. The government also wants to leverage the country s unique cultural assets to boost tourism numbers. Visitors have the opportunity to embark on so-called cultural safaris, where they can visit villages, interact with locals, and discover Rwanda s strong tradition in music, dance, pottery, painting, jewelry, wood carving and metal work. For those seeking to discover more about the country s history, there is the National Museum of Butare, home to one of the best ethnological and archaeological collections in the entire region; and the Kigali Genocide Memorial Centre, where both local and international visitors can learn more about the history, implementation and consequences of the genocide. Comprising of a museum, amphitheater, burial site and gardens, the center is deservedly rated as the number one thing to do in Kigali on TripAdvisor s website.