The Accelerator Issue 5 by The Accelerator Magazine

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PUBLISHER'S NOTE Welcome to the fifth issue of The Accelerator Magazine. Produced and now also printed in Rwanda in 5,000 copies, the magazine is 100 per cent “Made in Rwanda.” I am often told that it’s not part of Rwandan culture to read, and always find myself thinking that these kinds of statements are counterproductive to development. My understanding is that historically Rwanda did not have a rich reading culture, but my own experience over the past eight years is that the reading culture is blossoming and changing at a pace I find impressive – just as many other cultural characteristics have and are continuing to change. We chose to publish a business magazine that is rich on quality content as a tool to embrace the blossoming reading culture. For this reason the editorial team will continue to work hard to offer valuable articles to our readers: articles that inspire, provoke, and contribute to growth and change in business culture, and culture more broadly.

In the last issue we featured an article on sexual corruption that generated much debate, and I would like to thank the many people contributing to the debate and providing media space that allowed it to happen: Igihe.com for translating the article into Kinyarwanda and publishing it on Igihe.com, Debate411 for hosting a debate, Contact TV, Contact FM, and Inkoramutima Radio for also hosting talk shows. Thanks also to the people inviting us to talk about the issue at different educational institutions, and requesting that we continue to play a role in the fight against sexual corruption. I promise that we will continue to do our best, and this edition is taking the next step to #EndSexualCorruptionRW. Great leaders are readers, or perhaps said in another way: great leaders are curious, able to spearhead and embrace cultural change and innovation, and take action on issues in society that need to be addressed.

This time we have expanded from 52 pages to 64 pages to give you even more inspiration and food for thought. Enjoy reading The Accelerator Magazine. Lastly, I wish all my Rwandan brothers and sisters a peaceful Commemoration

ANDREAS NØRLEM

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EDITOR’S NOTE The point of this magazine is to engage with issues relevant to the private sector in a way that challenges the common narratives that describe Rwanda’s media landscape. This involves the need to be pragmatic and the need to embrace risk. This issue’s theme is environment: how can a country’s approach to preservation of the environment – a fundamentally important responsibility – be balanced with sustained economic development and the political influences that are an inherent part of the process? What interests me in the context of this theme is the process of policy making, and how a country’s policies can work at surface level, but lose some of their desired impact when tested more robustly in practice. To me, this condition is discernible when looking at Rwanda’s approach to environmental policy – the frequently discussed plastics ban and its effect on economic competitiveness as one ubiquitous example. Rwanda’s policies are ambitious and progressive in many ways, and this isn’t to say that there isn’t room for ambitious policy implementation; however, ambitious policy should be paired with effective collaboration between relevant public and private stakeholders.

The discussions around environment and the other topics featured in this magazine are meant to tell pertinent stories that are relevant to the context in which we’re operating. Where applicable, they also push to challenge our assumptions and to question policy implications, just enough, and in what I hope is the right way. No matter what the context, there’s always the risk of fallout from doing this. So as entrepreneurs and the leaders of this magazine, we are pragmatic in that we base what we do (and its consequences) in context and reality, and understand the boundaries that influence our work. We are also driven by risk in that we like to step over those boundaries – even if just a little – in order to move things forward.

TAMON OSHIMO

CONTENTS JOBS, INFORMALITY, AND THE THEORY OF THE FIRM

OPPORTUNITIES TO FIGHT YOUTH UNEMPLOYMENT RIPE FOR BUSINESSES TO PICK

A DECADE AND BILLIONS OF RWANDAN FRANCS LATER, RELOCATION FROM GIKONDO WETLANDS FINALLY TAKES SHAPE 14 “SUCCESSFUL” CHAN TOURNEY LEAVES MORE QUESTIONS THAN ANSWERS

RWANDA’S INDUSTRIAL POLICY: STATE INTERVENTION FOR A BETTER MARKET 20

MAGAZINE

CURBING CLIMATE CHANGE: IS THERE A ROLE FOR RWANDAN ICT INNOVATORS TO PLAY?

CARBON CREDITS, MARKETS, AND TRADING

THE HUMAN COST OF OUR CLEAN CITY

HEARING THE VOICE OF THE EARTH

THE DOMINO EFFECT OF CHILD’S PLAY ON ECONOMIC DEVELOPMENT 42 ACHIEVING CRITICAL MASS IN THE IT PRIVATE SECTOR

LIGHTING UP RWANDA… NATURALLY

Published by OrangeKat orange-kat.com | ~ ~ Chief Editor: Tamon Oshimo editor@accelerator-magazine.com | ~ ~ Creative Director : Tamon Oshimo |

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Contributors: Aki Akanyange Anders Allegaard Jacobsen Darla Rudakubana Emil Kofoed Braunschweig Gloria Iribagiza ~ ~ ~ ~ ~ Ife Piankhi Lamelle Shaw Mikhail Kutsovsky Museminari Damas Marcel Steve Nzaramba Tom Bundervoet|

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Photos & Iillustrations: A'Melody Lee Great Lakes Energy Isaac Rudakubana Marius Kamugisha Rebecca Ume Crook Scott Wilhelm ~ ~ ~ ~ ~ ~ WhoIAmDoesNotMatter |

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JOBS, INFORMALITY, AND THE THEORY OF THE FIRM BY TOM BUNDERVOET

THE ACCELERATOR MAGAZINE

Photography A'Melody Lee/World Bank

wanda has put on a great performance since the turn of the century. Between 2000 and 2014, the economy expanded three-fold (two-fold when population growth is accounted for), poverty rates decreased, enrolment in primary and secondary school sharply increased, and households’ access to basic infrastructure and services improved. The progress was arguably most visible in the health sector: child mortality – the number of children dying before age five – dropped from 152 (per 1,000 live births) in 2000 to 50 in 2015, maternal mortality plummeted from 1,071 (per 100,000 live births) to 210, and about 70 per cent of the population is now covered by a community-based health insurance scheme. At the most basic level, these achievements are largely the result of a marked improvement in public service delivery. Education outcomes improved, as schools have been built, equipped, and teachers actually showed up for work. Health indicators improved, as facilities such as health centres and posts have been brought closer to citizens, and are accountable for their actions through performance-based financing.

Over the next 10 to 15 years, attention is likely to focus less on basic services and more on the essential transmission mechanism between economic growth and individual welfare: the labour market. Jobs. The challenge is no small one. Rwanda’s working-age population (loosely defined as everyone 16 years or older) is projected to grow at 230,000 people per year between now and 2025. Independent farming, the traditional livelihood for the bulk of Rwandans, is becoming an ever less viable option for the new labour force entrants: with 3.8 million workers with a main job in agriculture in 2014 and a total arable land area of 1.4 million hectares, average land size is small at 0.36 hectare per worker. This translates to high levels of underemployment in agriculture: according to the World Bank’s recently released Rwanda Economic Update, about 42 per cent of agricultural workers are underemployed, meaning that they work few hours per week and would like to work more. Add in the steadily increasing education levels among young school leavers, and it becomes clear that the bulk of young labour force entrants in the coming decade will (need to) seek employment outside of the traditional agricultural sector.

This is a good thing. Even though productivity and earnings in agriculture have increased in the past ten years, they remain many times lower than in the non-farm sector. So both from an individual and macro point of view, the shift away from agriculture makes much sense. The thing is, there are currently not enough jobs in the non-farm sector, in particular in the formal private sector (see figure below). In 2011 (the year of the latest publically available survey), about 200,000 workers had their main job in the formal private sector (in private businesses that are registered at RRA and pay taxes; think banks, big hotels, big supermarkets, etc.). While this kind of employment has grown rapidly since 2006, its small starting point means its share will remain small in the foreseeable future. A simulation in the Rwanda Economic Update shows that, even if formal sector employment keeps on growing as strongly as it did between 2006 and 2011, it would still absorb only 11 per cent of the working-age population by 2020.

RWANDA’S LABOUR MARKET IN 2011 In sum, young Rwandan workers are progressively less likely to find decent employment in agriculture, and only the lucky few will manage to land a job in the formal non-farm sector. So where does this leave us? It means that over the coming ten years or so, the bulk of young labour force entrants will need to be absorbed by the informal non-farm sector – a sector that already largely dominates non-farm employment in Rwanda and African countries in general. Note that this is not a bad thing: earnings and other job outcomes are usually much better in the informal non-farm sector than in agriculture (though worse than in the formal sector).

comes in. If markets are perfect and competitive, firms will hire labour as long as the so-called marginal product of labour (think of it as the extra money the firm can make by hiring a worker to produce a little more of what the firm makes) exceeds the marginal cost of labour (what it costs to hire the worker – his/her wage). So if markets are perfect, the small size of informal firms is actually their optimum size, and firms are constrained only by an extremely low marginal product of labour (workers aren’t productive) or entrepreneurial ability of the firm’s owner. In this case, there is not an awful lot that governments can do in the short term, as the problem is inherently related to low education and skills levels of the workforce, which takes time to build.

Thing is: survival rates in the informal sector are low and informal firms do not seem to grow much. Of all informal firms that were listed in the 2011 Establishment Census, only about one third were still operational in 2014. In addition, self-employment (one-person businesses) account for the bulk of “firms” in the informal sector, and only a tiny share of informal firms ever hire workers and expand. So a key question is: can firm growth in the informal sector be facilitated for employment creation? This is where the theory of the firm

In many countries however, markets aren’t perfect, giving rise to so-called market failures. Among the most famous of market failures is access to credit. In this narrative, small informal firms (at least some of them) have the potential to expand rapidly and create substantial employment, but the lack of access to credit means that they cannot make the upfront investments in equipment and labour needed for take-off. Researchers have adopted unconventional methods to test this hypothesis, randomly giving out small cash grants or subsidised loans THE ACCELERATOR MAGAZINE

to informal micro-businesses in places as diverse as Sri Lanka, Mexico, and Uganda. Results have overall been positive, with businesses that received the grants increasing their turnover and profits, but with only weak effects on employment. (Only in Uganda did the subsidized loans lead to extra hiring.) Simply giving out cash to unemployed youth instead of to existing businesses seems to work as well: a cash grant distributed to unemployed youth in Northern Uganda led to large increases in non-farm employment and earnings. Ultimately, there is no universal guide to creating jobs, and interventions or policies that work in some countries may not work in others. While the long-term goal for Rwanda should be to move towards high rates of formal employment as in today’s upper-middle and high-income countries, the road towards decent work for all will, whether we like it or not, inevitably pass through this informal or “in-between” (between agriculture and formality) sector. Along this journey, persistent and objective experimentation will be needed to see what works in Rwanda to improve employment outcomes of Rwanda’s young workforce in the decades to come. Tom Bundervoet is a Senior Poverty Economist at the World Bank country office in Rwanda. He can be contacted at tbundervoet@worldbank.org.

A NON-FARM

29% Independent farming. 29% Unpaid family farm worker. 12% Wage farming.

RICULTURE AG

2% Unpaid household entreprise worker. 3% Non-farm employer. 7% Non-farm self employment. 19% Non-farm wage employment.

TIES I V I CT

Underemployment is a situation where a person works less than 35 hours a week but wishes to work more.

42% of agriculture workers are underemployed

35.7%

underemployment

2.4%

unemployment

21% of non-farm workers are underemployed

33% of workers earn below the poverty line 50% of the population earns 18,175 Rwf per month or less.

18,175 Rwf 100,000 Rwf

6% of the population earns 100,000 Rwf per month or more.

OPPORTUNITIES TO FIGHT YOUTH UNEMPLOYMENT RIPE FOR BUSINESSES TO PICK BY EMIL KOFOED BRAUNSCHWEIG

nemployment torments young people worldwide. The newly published Global Opportunity Report shows that youth unemployment is one of the biggest global risks right now. In Rwanda specifically, the unemployment rate is as high as 17 per cent within certain cohorts of Rwandan society, making this risk highly relevant to the national context. While this might seem discouraging, the report also shows that the business world is ready to tackle the challenge seeing opportunity in an area that politicians are perceived as being helpless.

FINDING OPPORTUNITY WITHIN RISK

UNEMPLOYED WITH A UNIVERSITY DEGREE

The researchers behind the Global Opportunity Report believe that if we are to solve the challenges of the future, we need to change our mind-set and see opportunity, where the rest of the world sees risk. The report is published in cooperation with the independent think tank Monday Morning Global Institute, UN Global Compact, and DNV GL, and surveys more than 5,500 leaders worldwide. With a starting point in five risks, it identifies 15 opportunities that are ripe for both business and government players to leverage.

Youth unemployment is considered the biggest risk amongst the respondents. Even if one takes the much contested unemployment numbers published by The National Institute of Statistics Rwanda (NISR), a worrying trend emerges: unemployment affects youth in urban areas disproportionately and especially those with secondary or university level education. In this group, the percentage unemployed is 10 per cent and looking at only the women in the group, the unemployment rate is as high as 17 per cent. The numbers show that there is real risk of wasting an entire generation, and that higher education is not succeeding in creating graduates that are ready to enter the labour market.

THE ACCELERATOR MAGAZINE

Photo Rebecca Ume Crook

CLOSING THE SKILLS GAP AND THE DIGITAL LABOUR MARKET

OPPORTUNITIES RANKED BY POTENTIAL POSITIVE IMPACT ON SOCIETY

Looking at the ranking of all 15 opportunities, two opportunities in the top three address youth unemployment. The opportunities for the Digital Labour Market and Closing the Skills Gap are rated second and third on the list. With the considerable unemployment for the highly educated in Rwanda it is encouraging that leaders worldwide rank precisely these two opportunities so high. And with 83 per cent of employers in the US and Canada reporting that there is a shortage of software developers, and with such a high unemployment rate for highly skilled workers in Rwanda, the creation of work through access to the internet and so-called “impact sourcing” seem like promising prospects.

Relation to risk

For more information: globalopportunitynetwork.org/report-2016

A Global Food Crisis

Finance 1.9

Accelerating Transport Emissions

Loss of Ocean Biodiversity

A Generation Wasted

1. Smart Farming 2. The Digital Labour Market 3. Closing The Skills Gap 4. Reduce Food Waste 5. Precision Treatment 6. Antibiotic - Free Food 7. Regenerative Ocean Economy 8. New Business Model For Antibiotics 9. Flexible Mobility 10. New Diets 11. Future Entrepreneurs 12. Crowd Transport 13. Closing the Loop 14. Smart Ocean 15. LowTransport Cities

Emil Kofoed Braunschweig is the Copenhagen based Project Coordinator at the Monday Morning Global Institute. He can be contacted at ekb@mm.dk.

Resistance to Life-saving Medicine

How likely the stakeholder group is to advocate for the opportunities - plobal average for all opportunies on a scale from -10 to 10

Politics 2.6

The graphic to the right tells an optimistic tale. Even though there is a lack of political will to support the opportunities, the business world is ready to act. This is not merely from some altruistic point of view, but because they see a business opportunity in combating youth unemployment. With civil society topping the list, we can expect new forms of alliances around solutions to emerge between business and civil society for collaborative action, which will change societies from the bottom up. Hence, it might be a mistake to expect politics to be the future drivers of change. It seems that change is more likely to come from an alliance between civil society and the business world.

Business 3.7

Responses from the governmental sectors paint a picture of a public sector that sees opportunities and feels affected by them, but does not have the capacity to act on them. An incapacitated governmental sector is not completely worrisome, however. The report shows that business is perceived to be among the top advocates for all 15 opportunities and hence the business world displays a readiness to seize the opportunities and act on them.

WHO WILL BACK UP THE OPPORTUNITIES

Civil Society 4.1

THE SLIVER OF HOPE

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A DECADE AND BILLIONS OF RWANDAN FRANCS LATER, RELOCATION FROM GIKONDO WETLANDS FINALLY TAKES SHAPE BY MUSEMINARI DAMAS MARCEL

A decade after it was proposed, relocation of industries from the wetlands of Gikondo to higher ground in the Kigali Special Economic Zone is taking shape, but problems persist.

pair of Kigali’s famed basket women – carrying their goods in baskets balanced expertly on their heads – negotiate the puddles of water and deftly dodge splashes from the few trucks that still plod the badly rutted roads of the lower Gikondo industrial zone. Sitting on rubble at road intersections where buildings once stood, a group of muscle men - human loaders of goods - still hug street corners, eagle-eyed, waiting for a job. One of them says they still get by despite the visible desolation. Scavenging the ghost buildings of the once busy industrial heartland of Kigali has become lucrative, as cables, bricks, doors, and anything of value is stolen at night and sold. Peering into the disused former compound of Rwanda Foam, now comfortably based in Kigali’s Special Economic Zone, I notice Ruliba bricks – obviously dismantled from structures inside – packed neatly in the courtyard and ready to be shipped away. A whole block of former industrial plants that included Rwanda Foam (mattresses), Aquasan (Plastic Tanks), and ADMA International (biscuits), have since been relocated. The disused buildings are being chipped gradually away and will soon all be rubble as they are picked clean of everything of value. With the exception of a sentry here and there to guard a few bricks and entrances, the place is devoid of life.

BALANCING ENVIRONMENTAL PROTECTION AND ECONOMIC DEVELOPMENT The case of Gikondo has become a crucial test of government resolve in preserving the environment as prescribed by the law, while simultaneously ensuring that economic development continues, as the Gikondo wetland was also an industrial hub. In 2005, the Organic Law N° 04/2005 determining the modalities of protection, conservation, and promotion of environment in Rwanda was conceived. It stated that: “It is prohibited to construct houses in wetlands (rivers, lakes, big or small swamps), in urban or rural areas…” and that “...the owners of the existing activities that do not respect the requirements of this organic law are obliged to respect the requirements of this organic law in a period not exceeding two (2) years from the day it comes into force.” The organic law put into operation a constitutional requirement that “Everyone has the duty to protect, safeguard and promote the environment. The state ensures the protection of the environment. A law determines modalities for protecting, conserving and promoting the environment.” The government of Rwanda eventually created the necessary framework to implement the provisions of that organic law in a cabinet decision of 14/10/2008

THE ACCELERATOR MAGAZINE

Photo Isaac Rudakubana

that put in place the Special Economic Zone as the designated area for heavy and light industries. The relocation, planned even before the Sustainable Development Goals (SDGs) that came into force on January 1, 2016, still serves as a good measure of how Rwanda implements internationally accepted best practices. If one were to benchmark the relocation of industries in general on the SDGs scale, the whole project would score high. The SDGs on clean water and sanitation; affordable and clean energy; decent work and economic growth; industry, innovation and infrastructure; sustainable cities and communities; responsible consumption and production, ending poverty; and life below water, and life on land, could be seen to have been addressed in this one move. Yet in practice, this government resolve to balance environmental protection and economic development has proven difficult.

A FINANCIAL AND LOGISTICAL BURDEN Going by the date the law was implemented, 2007 should have been the deadline year to relocate industries (mainly from Kigali’s Gikondo wetland area. But to date, the exercise has been bogged down by financial and other logistical issues including expropriation; the estimated Rwf 35 billion (USD $46 million) needed to fund the expropriation and relocation exercise has forced the government to carry out the process in phases as funds became available. The Minister of Trade and Industry (MINICOM), François Kanimba, told the Parliamentary Committee on Economy and Trade in March 2016, that negotiations with those businesses to be relocated had been tedious, and dispute resolution (especially between landlords and tenants) had been lengthy until modalities were put in place. Industries accepted relocating on condition that MINICOM built them facilities to house their industries, but subsequently, some of the warehouses – that were not

considered industries per se, and that were not part of MINICOM’s deal as a result – were expropriated. The government says it needs at least Rwf 17 billion (USD $22.4 million) to clear the backlog of relocations and expropriation cases scheduled to take place during the next two years. Minister Kanimba says the priority was to “shift industries and expropriate premises.” A property owner, Nurdin Rahemtullah Bhanji fell into the latter category and was therefore expropriated, but his former tenant Aquasan, a plastic tanks manufacturer, was assisted in relocating to the Special Economic Zone. Banji, had been caught napping when his tenant, Aquasan, managed to strike a deal with government to relocate to the Kigali Special Economic Zone without his knowledge. The new building that Aquasan now occupies in the Special Economic Zone, with its glass façade, interlocking tile driveway, and parking area, is light years ahead of its former waterlogged Gikondo premises. But despite a Rwf 234 million (USD $300,000) settlement in October 2015 according to Kanimba, Bhanji says he got a raw deal –and he is not the only one grumbling. Jayadith M.O, Finance Manager of Tolirwa, (roofing and building materials manufacturer), told The Accelerator Magazine that he is not complaining about the arrangement per se, but that the positioning of the new premises offered will be hard to reach for their clients. He says his company will have to pay for other sales points around town to reach their clientele. Tolirwa, Ameki Color, Tabarwanda, Rwanda Trading Company (formerly Rwandex), and Coffee Business Centre, are the big five heavy industries that are being transitioned to the Special Economic Zone. The construction of most facilities to house these heavy industries are at an advanced stage. The “big five” will be housed in one large compound side by side.

Photo Rebecca Ume Crook

THE ACCELERATOR MAGAZINE

Project Manager for this industrial complex, Philip Wachira, a Kenyan national, told The Accelerator Magazine that by EAC regional standards the Kigali Special Economic Zone was developing at a fast pace. He cited an example of the Athi River Project in Kenya, which was initiated in 2002 but was only now embarking on the backbone infrastructure of roads and an IT hub. However, despite regulations set as early as 2013 to address challenges that may hinder investors in Special Economic Zones, public transport for workers as well as restaurant services are absent. Wachira, who is employed by MINICOM, says a business centre with all such facilities is scheduled to break ground mid 2016.

IRREGULAR E NVIRONMENTAL ENFORCEMENT In the past, the Rwanda Environmental Management Authority (REMA) has been at loggerheads with industry over enforcement of environmental impact assessment requirements. A case in point is in 2011, when the Rukarara Hydroelectric dam II came up for investigation in parliament. It involved shoddy procurement procedures and for a project of its nature that needed a thorough environmental impact assessment, there was none. (After several hot sessions in parliament that implicated among others the Minister of Finance, parliament recanted and the investigating parliamentary committee members apologised profusely for “misleading” conclusions.) And this type of circumstance does not seem to be uncommon. For instance, a source involved with a prominent biodegradable plastics company cited a similar example of this type of conflict, where REMA has not authorized production of biodegradable plastics, despite the project being a source of significant foreign investment as well as an ostensible benefit to local manufacturers. This case has been on going for over two years. Recently, this potential confrontation between politics, business, and REMA seems to have come to a head after Dr Rose Mukankomeje, Director General of REMA, was arrested by police on 20 March 2016 for allegedly “subverting a criminal investigation” against two former local government officials of Rutsiro district, most probably in the course of discharging her duties.

A source familiar with the case, however, disclosed to the Accelerator Magazine that Mukankomeje had a disagreement with Rwanda Development Board over licencing of a business with significant investment potential and important political connections. Dr Mukankomeje, our source says, had stuck to the letter of the law, defying political higher-ups. Whether or not the fall out of this altercation is a hidden cause of her detention remains to be revealed. Indeed, REMA is a strategic organ in sustainable development, but also a gold mine of sorts for those vulnerable to the sway of exploitation by corrupt elements in business as well as government. This is through the Rwanda National Fund for Environment and Climate change (FONERWA) that was established by the organic law cited earlier. Technically under Mukankomeje, FONERWA is a depository of vast resources. UNDP and One UN Rwanda have, for example, disbursed a total of USD $5 million to FONERWA for sustainable management of environment, natural resources and renewable energy between 2014 and 2018. FONERWA has also been known to lend to, among others, Rwanda’s Development Bank a sum of 4 billion (USD $5.3 million). FONERWA also stands to gain from the USD $2 billion pledged to Africa at the Paris climate summit COP21 in 2015. REMA is therefore prone to executive, and peer pressure especially from Rwanda Development Board that is run directly under the President’s office. The latter’s primary interests lie in high turnover of foreign direct investments, while REMA is interested in environmental protection and unpopular and costly environmental impact assessments to prospective investors.

ENVIRONMENTAL PROTECTION AND ECONOMIC DEVELOPMENT: THE WAY FORWARD Mentioned earlier, the case of Gikondo has become a crucial test government resolve to preserve the environment as prescribed by the law, yet ensure sustainable economic development. Whether or not environmental protection is happening is mixed. With sewer water, for example, the standard is to recycle it and use it for other purposes such as fire fighting. Wachira told The Accelerator, that storm water is drained away through canalisation, making the Special Economic Zone an all-weather facility. Yet our field visit observations revealed few alternative renewable energy sources or lighting that most documents by REMA and Kigali City portray. There are also fears that factory processes in the Special Economic Zone will contribute to the rise in greenhouse gases and other noxious emissions harmful to plant, animal, and human health. Is this an opportunity for REMA and FONERWA to work together more closely to support businesses in efficiently complying with environmental regulation, and could a closer collaboration with RDB help to bridge the gap between environmental preservation and economic development? How this will all play out remains to be seen. But in the meantime, the example of the Gikondo wetlands illustrates that it is not easy to balance an ambitious environmental policy with robust economic development; fostering a regulatory environment that is conducive both to environmental preservation and private sector growth is evidently not an easy task.

The case of Gikondo has become a crucial test of government resolve in preserving the environment as prescribed by the law, while simultaneously ensuring that economic development continues, as the Gikondo wetland was also an industrial hub.

“SUCCESSFUL’’CHAN TOURNEY LEAVES MORE QUESTIONS THAN ANSWERS

COMMENTARY BY STEVE NZARAMBA

ports shows are all the rage in Rwanda nowadays. It’s all you’ll hear for most of the day on most (if not all) private radio stations gracing our airwaves. Talking points typically range from heavy, unrelenting criticism of Rwanda’s football governing body, FERWAFA, to detailed coverage of European football leagues, often down to every minutiae of what’s going on there (which often leaves me wondering how/why it affects my life in any way that Arsenal manager Arsene Wenger refused to buy a certain striker and how his team is now (yet again) faltering in the race for the Barclays Premier League). A heated debate on one such sports show, however, recently did pique my interest. The commentators were (as usual) criticising FERWAFA and wondering why the level of organisation and general professionalism displayed during CHAN cannot be replicated on a weekly basis during local league matches. The commentators also questioned why there wasn’t more advertising seen during pre-game, halftime, and post-match breaks. This leads us to the point of this article. Information from sources within the various committees convened to organise CHAN confirmed that not a single Rwandan company took up the offer to advertise during the competition, mostly due to a hefty $500,000 asking price. This raises an interesting question: on the one hand, $500,000 is certainly a lot of money, and well out of range for most Rwandan – even regional – advertisers. (For the sake of comparison, the average cost for a spot during the 2015 Super Bowl was $4.5 million, though that spot also reached an average of 114.4 million viewers compared to the potential 8 million or so that Supersport’s parent company, DStv, would reach). But on the other hand, it is also troubling that there seems to have been little discussion THE ACCELERATOR MAGAZINE

Photography Isaac Rudakubana

between Supersport and Rwandan businesses, making it seem as though Supersport certainly did not approach Rwanda – a country whose businesses claim to be thriving, and that claims to be one of the most business friendly destinations in the world – as a viable business opportunity. Another question that arose over the course of the recently held CHAN: infrastructure development. Rwanda has ambitions of tapping into MICE (Meetings, Incentives, Conferences, and Events) tourism and becoming a prime destination for international conferences, competitions, and events. That the African Nations’ Championships, a second-tier competition, left the country’s hotels, restaurants and transport network overstretched, shows that much remains to be done in order to meet the logistical requirements of hosting a truly top-level, international event. To be fair, save for a few glitches such as the now infamous blackouts at Huye Stadium and a largely underwhelming opening ceremony, Rwanda undoubtedly took a step forward in presenting herself as a viable option to successfully host high-level events. Still, more can be done. Next time a sports competition or any other sort of continental or international event rolls around, “Made in Rwanda” should be at the forefront of what our visitors see. Preparation should be stepped up well in advance, and hopefully, larger scale industry, transport, and accommodation facilities will be more favourably placed to adequately meet the demands of such tournaments. As I write this, Rwanda’s leaders from all echelons of government are set to convene at Gabiro in Eastern Rwanda for the 13th annual National Leadership Retreat. Top on the agenda, apparently, is how to promote “Brand Rwanda.” Seems I’m not the only one taking notice that this issue needs immediate review. 19

STATE INTERVENTION POLICY: FOR A BETTER MARKET

RWANDA’S INDUSTRIAL

BY ANDERS ALLEGAARD JACOBSEN

How does the Rwandan Government support the development of more valueadded production and investments into the national economy? Rwanda’s industrial policy and positive results imply that an active state is indeed a possible way to secure attractive conditions for the private sector and local industries to develop.

or many years, industrial policy, characterised by public organisations being involved in and investing in developing local industrial sectors, was perceived as a radical approach that would obstruct economic growth through free market forces. However, the successful transformation of Asian economies such as those of Japan, South Korea, and Singapore, which was to a large extent orchestrated by government institutions, has inspired many developing countries in recent years. In these globalised times where countries adhere to legislation from international organisations and have signed free trade agreements, the space for alternative government intervention and legislation has definitely narrowed. However, well-developed support measures are playing an

increasingly important role regardless, as countries compete on a global scale to supply local and international markets with products. In short, industrial policies are an important weapon when countries are battling for national economic growth, profit for locally based producers, and jobs for the population. All this can sound very theoretical, but the Rwandan case offers many examples of how public institutions at many different levels contributed to a stable economic growth of around 7 per cent over the past five years and has been relatively successful in attracting private investments. The current results and targets have their roots in Vision 2020 and the ambition of being a knowledge-based middle-income economy. In the past five years, domestic industry has grown THE ACCELERATOR MAGAZINE

at 10 per cent per year, and a recently published World Bank report states that 30 per cent of the population had their main job outside of agriculture in 2011, which was an increase from 23 per cent in 2006. While job creation and youth unemployment remains a challenge there has definitely been real progress. With Rwanda being a relatively small market and a landlocked country, it is not an obvious choice for the private sector to invest heavily and establish production sites. So what is it more specifically that makes the country an attractive destination for local and international investments, and what is the Government of Rwanda’s role in attracting and facilitating these investments?

THE RWANDAN APPROACH The Ministry of Trade and Industry (MINICOM) is in charge of developing Rwanda’s industrial policies. When asked about the government’s approach for establishing more value-added production in the country, the Director General for Industry and Entrepreneurship Development, Alex Ruzibukira, explained that “We believe in an economy that is driven by the private sector in a knowledge-based society. The government’s main role in achieving this is advocacy and facilitation.” This very broad description makes more sense when looking at how different government entities are engaged in the process of preparing and starting up a project. The targets that have been defined in policy papers such as Vision 2020, EDPRS I and II, and the National Employment Plan are translated into more in-depth strategies within relevant ministries. MINICOM, in close dialogue with the private sector, identifies sectors with high potential and what can be done to support companies to actually start-up these projects.

Recently, the Special Economic Zone has been developed and there are plans to set up eight Industrial Parks around the country to secure “service land” for companies and thereby space for industrial growth to take off. Also, support measures for specific sectors, e.g. textiles and leather, have been introduced to make it easy and convenient for these industries to start production. Ruzibukira is optimistic that such an “advanced factory units” initiative can attract investors. “We are setting up ‘advanced factory units’ that are ready for investors to just bring their equipment, so they can start production immediately. Often investors have to spend time and money by looking for land and build the facilities according to the requirements of the sector. We believe this is an important selling point,” he added. The government is aware that it needs to actively look for and approach potential investors for the value-adding production projects – free market forces do not come uninvited to a small, landlocked country! More than the business-friendly reputation Rwanda has developed, there are several ways to reach out to relevant partners and make them interested. 21

Most often “transaction advisors” with knowledge of particular industries are used to contact strategic investors. Also, President Kagame arranges “side line meetings” with potential investors when he travels, just as Rwandan Embassies across the world present projects within their network. The Rwanda Development Board (RDB) organises tours for visiting “strategic missions” for investors that have shown interest in the Rwandan market. And by using the expertise and networks from organisations such as TradeMark East Africa and Tradelinks, local companies are introduced to potential international partners. As Ruzibukira highlights, it is equally important to live up to the expectations and promises that have been presented to potential investors once they arrive. Further, it is generally acknowledged that there is a need to react to the challenges faced by actors in Rwanda’s private sector; improving tax regulation, minimising long processes with public institutions, and learning from previous experience is a must. This is also the case when it comes to developing Rwanda’s agro-processing industry.

GETTING IT RIGHT IN AGRO-PROCESSING Rwanda’s agricultural sector is of great importance to the economy and the transition from subsistence farming to a more commercial-oriented agriculture sector is well under way. World Bank Senior Poverty Economist for Rwanda, Tom Bunderwoet, writes in the latest update on the Rwandan economy that, “Given that 70 per cent of the workforce remains employed in agriculture, increasing earnings from agriculture remains the most direct way to improve economic conditions for the bulk of the population.” It is natural that the government has an ambition to contribute to developing set-ups that make it interesting for the private sector to become further involved in agro-processing projects. Until now it has proven challenging for agro-processors to develop a value chain where cooperatives and farmers deliver a sufficient quantity of high quality raw materials. It was previously reported that the cassava processer The Kinazi Cassava Plant and soybean processer Mount Meru SoyCo Ltd. – where a group of five investment companies injected an initial investment of around Rwf 10 billion – have both faced difficulties in getting a consistent supply of raw materials and therefore are not even close to realising their production capacity. According to Ruzibukira, agro-processing companies are underutilised throughout the country for this reason. The numbers suggest that there is a need to develop better practices in agro-processing, including an appropriate set up to develop value chains. While the annual average growth for the industry over the past five years has been 10.2 per cent, led by growth in construction and mining, the growth for the agro-processing sector has only been 2.7 per cent. Agro-processing contributes 70 per cent of the inputs to the total manufacturing production. The government works at many levels to find solutions to this issue and according to Ruzibukira more focus needs to be given to develop the cooperatives that supply the raw material to the agro-processors. “We need to strengthen the cooperatives movement, so they are run like profit-driven companies with professional corporate governance. This will ensure that the cooperative members

trust the leaders and that the agro-processors trust the cooperatives once they have signed a contract. That the supply will come at the right time, in the right quality as agreed. We still have a challenge here,” he says. Until better practices from the cooperatives are implemented, Ruzibukira mentions two practices he believes agro-processing companies can benefit from when setting up their production.

INVESTING IN A BETTER MARKET One option is for agro-processors to enter earlier in the value chain themselves and take responsibility for producing a certain quantity of the raw material, to assure that the factory will always be running and that the company has products available to sell. This is a model that the local producer of maize flour MiniMex has introduced successfully. Another model that deals with the issue is to include the supplying cooperatives as among the shareholders, so they are empowered from being included in the decision-making processes and have the right incentives to regularly supply quality raw materials. There are several projects in MINICOM’s pipeline that intend to apply this set-up. The potential impact from continued transformation of Rwanda’s agricultural sector and improvement of the value chains for Rwanda’s agro-processing industry cannot be under-estimated. Government support and initiatives are playing an important role in catalyzing this process.

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Obviously not all government interventions have led to successful projects and the development of industrial sectors. If that were the case, then free market/companies would have taken it upon themselves to invest and develop profitable businesses. Government interventions work best where the long-term potential for growth and job creation from private investment makes it worthwhile to allocate short-term public investments to cover the costs and risks that make it unattractive for the private sector to invest initially. Industrial policies are expensive. Just think of the millions of dollars spent on acquiring land, machinery and equipment, staff, tax incentives, and subsidies. There is an obvious need to make sure that funds are used responsibly and that all stakeholders are on board and working toward the same outcome. However, there are enough success stories to argue that Rwanda is doing right by investing heavily in developing their markets to make them interesting for the private sector.

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CURBING CLIMATE CHANGE: IS THERE A ROLE FOR RWANDAN ICT INNOVATORS TO PLAY? COMMENTARY BY AKI AKANYANGE

n December 2015, Rwanda was signatory to the Paris Climate Change Agreement. Lauded as one of the world’s greatest diplomatic successes, the agreement did not fully address or reflect the challenges faced by developing countries – like Rwanda – of curbing climate change whilst driving the equally important but at times conflicting tag of economic development. Rwanda is renown on the continent for its investment and strategic focus on the use of ICT across all sectors for development. In the context of monitoring and managing the environment, however, investments generally need to be large scale and have therefore been out of reach for most small-to-medium sized enterprises. Additionally, there has been little focus on or incentive for local innovation; when it comes to environment and ICTs, attention has been paid mostly to the management of ICT waste, as opposed to ICT as a tool to monitor and manage environmental issues. That being said, there is an enormous opportunity to leverage ICTs to protect, monitor, educate, and plan for environmental challenges here in Rwanda. Admittedly not a new concept, this is a call for more home grown solutions to address these challenges. Whether technology solutions or policy solutions – or better still a combination of both – it is critical that Rwanda’s agenda for climate change focuses on innovation.

A few examples to illustrate the need for this: First, with the national agenda to focus on energy expansion, including energy imports from Ethiopia, it is imperative that efficiency is maximised in production, transmission, and use. The limitations of electricity generation, grid transmission, and distribution losses mean that Rwandan engineers and planners should embrace the opportunity to design a smart grid and efficient energy applications to increase efficiency – especially given the current bubble of new real estate developments that could allow for new home-grown developments in the design of energy efficient buildings. And speaking of real estate, given the near viral proliferation of high-rise buildings in Kigali, are there eco-standards put in place by the City Office to manage energy consumption, especially in commercial buildings? Energy consumption at all stages of the cycle – starting at design, construction, use, and demolition – accounts for a significant portion of the country’s energy load annually, and only promises to increase. Using various software systems and applications to design energy models for use throughout the building life cycle and to track energy efficiency presents an opportunity: one that would best be leveraged by city authorities who put in place standards and regulations that encourage accountability for energy consumption.

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And finally, we cannot speak of energy and environment and say nothing about water. Our dependence on agriculture as an economic driver (80 per cent of the country’s workforce relies on agriculture), the rate of deforestation (Rwanda has lost over 30 per cent of its forests since the 1960s), and the growing Rwandan population is cause for concern: what can be said of Rwanda’s water security and the outlook for the next century, given the pivotal role that water plays in driving the country’s economy? As Rwanda takes steps to transition to a knowledge-based economy, given that ICT is expected to act as a main enabler to this shift, and paired with the Government of Rwanda’s additional focus on transitioning from a basis in subsistence agriculture to value addition and manufacturing, there is significant opportunity to leverage technology solutions to identify new and innovative approaches to protect Rwanda’s environment whilst maximising the economic returns on agriculture. The above are merely examples meant to highlight the need for data collection, management, and analysis to chart a Rwandan course to address climate change and ensure environmental sustainability – something that innovation in ICT can contribute to significantly. Numerous initiatives are underway, funded and run by a host of donors that, in my opinion, are unsustainable because they usually rely on international human resources with minimal knowledge transfer to locals. It is critical that Rwandan innovators play a role in developing and shaping how we manage our environment sustainably, and drawing from a Rwandan perspective. In response to the obvious concerns about skills of said innovators and lack of tools: actions and investments have to be made now – through enforced transfer of knowledge where both regional and international skills are utilised, capacity building of local talent, incentivising development of solutions, and tapping into the existing ICT ecosystem.

CARBON CREDITS,

MARKETS, ANDTRADING

BY GLORIA IRIBAGIZA

Since the Industrial Revolution, a lot has been said about the damning effects of climate change. But it is only last year, at the November 2015 COP21 talks held in Paris, France, that the world saw the playing field levelled, after decades of inaction from some of the worst polluting global economies. For the first time in history, under the Paris Agreement, all 189 countries across the globe were brought to commit to climate change. Illustrations whoiamdoesnotmatter

his came as a relief, seeing as numerous diplomatic efforts had fruitlessly attempted to circle the climate change arenas, but for over 20 years, had failed to enforce the terms of the Kyoto Protocol – terms that would promote carbon emission reduction through carbon trade between the developed and developing countries. Rwanda became party to the Kyoto Protocol in 2004. It accepted the terms of the Carbon Credits trade that limits industrialised countries from exceeding their carbon emissions. In practice, this means that for every tonne of carbon dioxide (CO2) emissions that are avoided or removed by a clean energy company or project in a developing or developed country, a dollar is earned by that company or project. By way of background, it is estimated that 41 of the world’s most polluting countries are responsible for 84 per cent of the world’s carbon emissions from energy alone. While these economic giants benefit from steady economic growth and prosperity, the developing world suffers disproportionally from the gaseous carbon emissions. Unpredictable heavy rains and flooding, and unprecedented and prolonged dry seasons that affect the planting and harvesting seasons in the developing world are a result of global warming. The causes are attributed to carbon emissions also known as greenhouse gases. According to scientists, an accumulation of greenhouse gases is responsible for the continuous state of depletion of the earth’s ozone layer, which has led to record highs in atmospheric temperatures. As a result, the foreseeable future effects of global warming include but are not limited to: more severe floods and droughts, food and water shortages, rising sea levels as the Arctic and Antarctic poles melt, and fewer but more intensely destructive storms.

While this paints a doomsday picture, climate and environment analysts have conclusively stated that a cut in global greenhouse gas emissions by half is necessary if a decrease in atmospheric temperatures of 2 degrees Celsius (or 3.6 degrees Fahrenheit) is to be attained. While this figure seems minute relative to the contentious debates it has created at climate change conventions, reducing this number is a much more complex task than it might seem. Yet hope remains for environmental advocates and scientists who do not relent against the slack policies that high carbon emission economies tend to get away with. The debate on global warming rages on and has become a contentious economic debate between the developed and developing worlds. Still there are several unexploited benefits that carbon credits present for the developing world. While many industrialised countries are happy to publicly comply with commitments, and vow to cut down on their carbon emissions, developing countries’ efforts to reduce the effects of carbon emissions are challenged by industrialised countries’ reluctance to implement policies that actively ensure that emissions are reduced – and are further hindered by polluting economies’ low taxation or tax evasion associated with carbon pricing. According to a 2015 report, Taxing Energy Use 2015-OECD and Selected Partner Economies, that compares energy taxes among the 41 economies that use 84 per cent of global energy, “Energy taxes are poorly aligned with the negative side effects of energy use, and are having limited impact on efforts to reduce energy use, improve energy efficiency and drive a shift towards less harmful forms of energy..

Yet taxes are one of the key policy instruments that would ensure environmental compliance among top carbon emission culprit countries, like the United States, China, Russia, and India. This new and insightful research conducted by the Organization for Economic Co-operation and Development (OECD), highlights the fact that “taxes on energy use provide a transparent policy signal and are one of the most effective tools governments have for reducing the negative side effects of energy use.” However, the question that still stands is whether or not developing countries are relevant when it comes to determining whether carbon pricing can effectively avert the devastation that climate change leaves in its wake. Probably yes, if sustainable renewable energy policies are employed in short to medium-term investments. This would be complementary to providing economically lucrative incentives for industries and economies to transition away from fossil fuel use in developed economies. But according to a report from Sanford C. Bernstein & Company, the reality is that whilst sources of renewable energy are growing quickly globally, “They still account for about only 10 per cent of total energy supply, with most of that coming from hydroelectric power. Solar and wind account for 1.6 per cent of total energy.” There has always been a business angle to carbon trading that the private sector in the developing world – including Rwanda – can tap into. That is, companies that invest in renewable energy like solar, wind and nuclear power, and that employ cleaner and smarter energy technologies with low to zero-carbon footprints, are more likely to benefit from carbon credits.

Taking the example of Rwanda, simply put, there are provisions within the Rwanda Environment Management Authority (REMA) that allow for venture capitalists and clean energy innovators in the private sector to profit from carbon credits. Under the Clean Development Mechanism (CDM) that was established under the Kyoto Protocol, a significant amount of carbon credits can be generated from renewable energy projects alone. The World Bank confirms that developing economies can annually generate $25 billion from trading on the carbon market alone. Yet African nations have less than 2 per cent beneficial involvement in the global carbon market, which is estimated to be worth $30 billion in investment capital. Rwanda is four years away from confronting its national development blueprint goals in the famous Vision 2020 and second Economic Development and Poverty Reduction Strategy (EDPRSII). While climate change and environment are high on the updated EDPRS II agenda, the onus lies on whether the private sector in partnership with the Government of Rwanda will take advantage of the opportunities presented in trading in the global carbon market. It is by enacting viable and comprehensive environmental policies that carbon emissions will be curbed for the greater good of all humanity. These policies would ensure that carbon reduction is actively pursued, that more jobs are created, alternative clean energy sources like solar and wind energy are pursued and that tax revenue in the form of foreign direct investments is generated through carbon pricing.

Though achieving these carbon reduction steps feels distant, if countries maintain steady compliance to the expectations of both the Kyoto Protocol and the Paris Agreement, then and only then will the carbon market trade usher in a milestone shift in determining some of the key global economic policies that could reduce the earthâ&#x20AC;&#x2122;s temperatures. Otherwise, carbon credits will remain an obsolete concept in solving the global warming paradox.

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THE

HUMAN COST BY DARLA RUDAKUBANA

rouched on the side of a cobblestone road, Claire, 27 years old, sits head down, concentrated on trying to uproot the little weeds that have stubbornly grown in the cracks. Armed with a butter knife like tool, she scrapes the spaces between the bricks, tracing her way from KG 647 Street to KG 643 Street with the diligence of an employee new to her job. If it wasn’t for her reflective vest, worn over her dilapidated green work coat, and her bright orange beanie, her quiet, unimposing nature would make her invisible to any inattentive passer-by.

THE CLEANERS’ CASE Claire Ibiringirwa and her workmates work 15-hour days each week to clean the streets of Kacyiru, as all street cleaners do to maintain the cleanliness of Kigali. It is not a job that she trained for or dreamt of, but it is one that she readily settled for, given her background as an uneducated mother of three with a handicapped husband. It is a job taken to help her stay afloat – yet her family is barely surviving. As an ordinary cleaning staff of one of the 22 cleaning companies servicing Gasabo District (six of which focus on cleaning the main streets), Claire and her workmates get paid Rwf 25,000 (USD$34) every month when cash flow is good for their employers. Otherwise, they are given enough for a meal and a ticket home after days of waiting and pestering their employers. “It depends on our boss’s contractors,” she explains. “It depends on the deal he has made and if he gets paid on time.” Rwf 25,000 can help a little but cannot solve all the problems at home, Claire admits. “It mainly helps me to shop for my children.” She has had to quickly learn to stretch her salary to pay for school fees, clothing, and food for her household.

OF OUR

CLEAN

CITY

“Already the money I need is too much. I have to pay Rwf 20,000 [USD$27] in school fees for only one child, so I pay Rwf 10,000 [USD$13] for my second born and use the rest to maintain my household. I can only top up his school fees when I get paid. My elder son goes to a cheaper school in the village in Gitarama and my youngest doesn’t go to school.” Claire’s workmate, Stephania Nzamukesha, 67 years old, thinks low salaries are the least of her problems. A veteran in her job, Stephania has many experiences, both good and bad, that tell the tale of the life of street cleaners in the country. “Some people disrespect us because they mistake us for mad people when they see us walking around picking up litter and cleaning the dirt off the streets. It really depends on the hearts of the people you meet. Some hearts are made to love and some hearts are made to hate,” Stephania explains. In her time working as a street cleaner, Stephania has had to sleep in hedges during her breaks, beg for water from passers-by, and has had her right arm run over by a car while she worked. “We may need all these things and may not be able to get them because of the capacity of our employers to provide them,” Stephania says of water, health insurance, and appropriate tools to ease their work and life. Like Claire, she attributes the limited facilities to limited funds paid to her employer by contractors. “He can only give us what he is able to provide from the money he makes from his contracts,” Stephania reiterates.

Photography Isaacâ&#x20AC;&#x2C6; Rudakubana

THE CITY’S ROLE The world over, Kigali is hailed as one of the cleanest cities along side cities in developed countries such as Japan, Germany, Sweden, and Singapore. In 2008 the City of Kigali became the first African city to be awarded the Habitat Scroll of Honour Award by the United Nations Human Settlement Programme for its zero tolerance of plastic bags, improved garbage collection system, and crime reduction. Come 2016, Kigali is yet to relinquish its crown. Rwanda’s efforts in realising a goal such as cleanliness is a testament to the country’s ability to achieve its bigger goal – mapped out in its Vision 2020 strategy – of becoming a middle-income country by the year 2020. Although seen as a small component, street cleaners like Claire and Stephania make up part of the turbine that drives all efforts towards achieving this common goal, and more specifically, of increasing the quality of life for all Rwandans. “We work everyday to ensure that our city is clean. If we skipped even just a day of work, the streets would get filthy and people would complain,” says Stephania. Through the Rwanda Utilities Regulatory Authority (RURA), the government – in recognition of the contribution of these cleaning services and the rapid growth of this industry – put in place regulations to not only monitor the quality of services provided by cleaning companies, but to protect the many, often vulnerable, Rwandans employed by them. These regulations were put in place three years ago and have, on one hand managed to maintain Kigali’s cleanliness, but seem to have, on the other hand, slackened on protecting the very people behind this cleanliness, as more and more street cleaners admit to facing the same conditions as Claire and Stephania.

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THE CLEANING COMPANIES’ DILEMMA Gakuru Sada, General Manager of the Haki Cleaning Company, believes change cannot be achieved until government regulators push for it. Tender requirements do not specify the minimum pay for a street cleaner, which in turn force service providers to make do with whatever contract they can negotiate by cutting down on salaries and providing few tools. In the case of government clients, the company that takes the job is often the one that offers its services at the lowest cost. Sada, along with other cleaning company owners and managers, have held several meetings with authorities from the City of Kigali to discuss and map out ways to improve the quality of services provided by cleaning companies and, most of all, improve the conditions of its employees. However, despite their continuous meetings and agreements, their plea to specify and limit the minimum salary of street cleaners (and cleaning staff in general) is yet to be heeded. Sada, whose company employs 54 cleaners (38 of whom are women), says that ideally, her cleaners should get paid at least Rwf 40,000 (USD$54) because she believes that life, especially in Kigali, cannot be managed with anything less.

POSSIBLE SOLUTIONS According to the officer in charge of sanitation and hygiene in Gasabo District, contracts with cleaning companies have been reviewed and amended to ensure that cleaning staff are paid a minimum of Rwf 40,000, have access to health insurance, and appropriate cleaning tools. These long awaited contracts are to be adopted in April this year. With a new mayor in town promising to transform Kigali beyond what it currently is, the hope is that promises such as those made to cleaning companies and street cleaners are not ignored or postponed any longer. The existence of situations such as those of Claire and Stephania, from a global perspective, undermines development. The City of Kigali, for example, cannot achieve its goal outlined in the City of Kigali Development Plan (KCDP) of reducing its average poverty level to below 10 per cent by 2018, if it does not respond to the cries of the very people that have played a role in putting it on the map. In one of his speeches on equality for all, President Paul Kagame urged Rwandans, especially leaders, not to be complacent with Rwanda’s achievements but to remain focused on their goal of ensuring a quality life for all Rwandans. In this case, oblivious to the street cleaners’ existence or not, their wellbeing is essential to Kigali’s development. If the City of Kigali is to realise its KCDP development goals, especially with regard to social protection, measures to improve the conditions of street cleaners such as Claire and Stephania should be featured on the agenda and prioritised.

The existence of situations such as those of Claire and Stephania, from a global perspective, undermines development. The City of Kigali, for example, cannot achieve its goal outlined in the City of Kigali Development Plan (KCDP) of reducing its average poverty level to below 10 per cent by 2018, if it does not respond to the cries of the very people that have played a role in putting it on the map.

HEARING THE VOICE OF THE EARTH COMMENTARY BY IFE PIANKHI

he civilisation of the Nile Valley – at 10,000 years old, the oldest African civilization – had an intimate connection with the Nile, studied the stars for thousands of years, and created the first calendar known to humankind. But now it seems that we have lost our connection to nature. There is a growing separation between our people and the land as more of our populations move to urban centres. I see a stark departure from the African relationship with nature; the value in our land and its ability to provide food, shelter, medicine, and clothing, is being lost in modernity. In the 2nd presidential debate President Museveni described Uganda when he came to power as “an enclave of subsistence farmers” that under his leadership has moved away from primitive agriculture to agro business providing tons of maize and milk for local and international consumption. This is progress in a political and economic sense, but in an environmental sense modern civilisation is threatening our ecological wellbeing, creating mass extinctions, deforestation, and soil erosion, reduction of diversity, and ultimately environmental pollution that irreversibly damages the resources that are imperative to our survival. This is not to say that economic development isn’t important. Rather, the question is: how can true economic development be balanced with respect for the environment? And similarly, how can we make sure that African resources aren’t exploited for the gain of others? These, for me, are questions that must be answered. In his essay on species arrogance, John E Mack, professor of psychiatry at Cambridge Hospital in Massachusetts, explains how the environment is regarded as a thing: an object to be owned, mined, guarded, stripped, built upon, dammed, ploughed, burned, blasted, bulldozed, and melted to serve the material needs and desires of the human species at the expense – if necessary – of all other species which we feel at liberty to kill, paralyse, or domesticate for our own

use. This shift of mind set away from interconnectedness has been informed by the Judeo Christian theology (read: The Bible) that promotes the idea of superiority which underlies the thought that humans exist to watch over nature. In the context of the continent, this view was popularised when colonial and religious visitors first encountered the indigenous populations and regarded their respect for the natural world as pagan, nature worship, or animism. This was the beginning of a conflict that stemmed from opposing ideologies (or rather, the belief that one was superior), and continued with the advent of private land ownership during colonialism as Maasai herders were pitted against Kikuyu farmers, who after obtaining deeds to their land for the first time began to erect fences to mark boundaries. Currently, most of the conflicts on the continent are due to competition over the resources of our environment. There’s no easy answer to how to balance economic development and the environment. We need a holistic approach to environmental management that considers the essential components of a stable society and environment. Think of the traditional African stool, whose legs are chiselled at the same time to create balance, and represent sustainable environmental management, democratic governance, and a culture of peace – with the seat representing society and its prospects for development. We need a definite reassessment of how our businesses impact the environment. I am not advocating for the turning back of the clock or deindustrialisation, but our practices need to have a social and environmental component. Any “holistic” business or government policy needs to conduct environmental impact assessments that explore the environmental consequences and issues, with consultation of public opinion, and exploration of alternatives. Economic growth is certainly important, but we cannot be concerned with economic growth alone; we must also answer the ethical questions of how we use the resources of the planet.

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As the Native American proverb states: When the last tree is cut, when the last river has been poisoned, when the last fish has been caught, only then will we find out that we can’t eat money.

Illustration Mariusâ&#x20AC;&#x2C6; Kamugisha

Ife Piankhi is a social entrepreneur and creative facilitator living in Kampala. www.ifepiankhi.com

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THE DOMINO EFFECT OF CHILD’S PLAY ON ECONOMIC DEVELOPMENT BY GLORIA IRIBAGIZA

While play is hardly considered an important form of learning in many Rwandan schools, investing in school readiness ventures has the potential to boost the economy while at the same time, repurposing the direction of the country’s already struggling education system. How? The answer comes in the form of early childhood education that when accessed by children from all echelons of society, will propel the economy of the country in the long run. Photography Rebecca Ume Crook

BRAIN SCIENCE

ccording to a World Bank study, Investing in Young Children, investments in early childhood development translate into considerable cost savings and efficiency gains in the health and education sectors. According to the report, this leads to “socially well-adjusted and productive adults who contribute to a country ‘s economic growth and help break the intergenerational cycle of poverty as demonstrated by higher wages, lower dependence on social assistance programs, greater asset accumulation, and healthier.” However, for this concept to succeed there are a number of approaches that must be taken into consideration. These include providing integrated services

that help children develop to their full potential in health and nutrition, education, and psychosocial wellbeing. Carol Dusabe, the early childhood education (ECD) Program Manager at Save the Children, Rwanda, says that through their organisation’s interventions for children from birth to six years, they have had to collaborate with a number of stakeholders both in the communities and pre-primary schools all the way to the national level. “The ECD age is the most crucial in providing a foundation for future. Brain science teaches us that more than 80 per cent of the child’s brain develops by the age of three years and 95 per cent by the age of six years,” Dusabe says, adding

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that, “There is a small window in which a child can learn so much as their brain grows and matures. If you miss that window, then the child’s potential for learning is greatly reduced.” Recent data from the Ministry of Education (MINEDUC) states that only 13 per cent of children aged four to six years have access to ECD services. (The specifics of those children who are up to three years are yet to be investigated.) The goal is to increase that number to at least 30 per cent between 2016 and 2017. “The interventions available are mostly in health, like immunisation and nutrition initiatives, but are very limited in coverage when it comes to education. Because at zero to three years, children

ACCESSING A VALIDATED EDC POLICY need a more holistic approach to care that includes cognitive learning and socio-emotional input,” she states. Save the Children has piloted a project and done a study that trains parents on home-based activities to help their children gain emergent literacy and math skills for school readiness. Even without going through a formal pre-primary school education, they are ready for the first year of primary school. “At this moment we need a combination of approaches, where children have access to ECD centres that either provide all three years or a year of pre-primary education, and for those who are not part of these, parenting education can be used to reach them,” she explained.

Currently, there are no minimum standards for certified ECD centres. However, a revised ECD policy by the Ministry of Gender and Family Promotion (MIGEPROF) is in the pipeline. Set to be implemented between 20162021, the new strategic plan will improve access to ECD education and streamline its quality across all early childhood service providers. Immaculee Kayitare, the Technical Assistant to MIGEPROF in ECD policy implementation, said the policy provides a framework for the execution of ECD guidelines to implementing partners. Kayitare said, “It will also make provisions for children to benefit from similar services across all strata of society so that they can fully achieve their potential.”

While urban areas have access to more ECD services through nursery schools and crèches, the rural areas have less and are presented in the form of community-based services. But the trend is changing. “These services do not necessarily have monetary implications for the rural parents,” said Kayitare. With free services made available to rural parents, the only condition is their involvement. They are also trained to care for the children on a rotational basis in a way that allows them to fulfil their various job responsibilities.

“The private sector is well equipped to invest in this new area, there is a high market demand for day cares, and any service dedicated to children will always be beneficial. You can never fail to find children to fill these places,” she said. The policy presents private sector investors with opportunities to implement, scale up, and act on ECD provisions while the government raises awareness on its importance. “The government has provided a framework for the private sector to work within. We can’t do everything alone. We create awareness, roll out services, and provide direction through policy support,” Kayitare explained. Investments in early childhood interventions that encourage the well-being and development of young children can result in one of the highest returns on investment by the government and for the private sector. But, these returns are indirect, and happen in the long term. Still, this has led to a business trend across Kigali that takes the burden off working parents – albeit at a costly exchange. These are in the form of crèches and day care centres that are equipped differently so as to introduce children to early literacy and math skills. However, bare minimum standards for the operation of all ECD centres are yet to be established in the ECD policy. And because there remain many socioeconomic issues that render investing in ECD programs more complex than simply injecting capital, a holistic approach that accounts for this – especially from a policy standpoint – must be deployed. If not executed properly, ECD programs have the potential to perpetuate disparities in wealth on a long term basis; if quality ECD programs remain accessible to only the wealthiest families, these families will continue on their economically mobile route at the top, while the majority of the population sees little change – potentially robbing the country’s future economy of valuable talent.

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INVESTMENT AND QUALITY Kids Land, a crèche located in Remera, takes in children aged three months to three years. With programs offered in English and French, at the choice of the parents, they also teach Kinyarwanda as a part of their early literacy strategy for young learners. Jeanne Musabimana is the proprietor of Kids Land who said that when she launched her crèche on March 2016, her motivation was based on the vast challenges of working parents in Kigali. With every new crèche business, the economy is boosted through job creation, tax payment, and increased demand for products from other industries such as toys and books. This is in addition to improving the quality of services provided at these centres. “Parents would have more choices; competition would increase as well as quality of services and innovation,” Musabimana said. When it comes to the costs incurred for working parents Musabimana says, “There is a perception that day care centres are expensive for most parents. We should not just look at the cost but at the benefits. And I believe in many ways, the benefits outweigh the costs.” Furthermore, Save the Children’s ECD Dusabe affirms that parents must be the first people to contribute to their child’s emotional and cognitive development. “No amount of nanny or crèche time can replace the contribution that the parents make by simply spending time with their children,” she says. Another working parent, Keisha Irene, says finding the right school for pre-primary is very challenging in Kigali. “There are very few crèches and the few you find are very expensive,” she said. “The crèche we found is over Rwf 500,000 (USD$660) per quarter, which isn’t

cheap. We were not mainly looking at the cost; we wanted a good child friendly environment, an all-inclusive curriculum, and trust that comes with trained and skilled ECD personnel.” Busy career parents who get home late, carry work home or even work weekends have found asylum in a system that works to indulge their parenting needs. It is also practical to get the same quality of education across various ECD centres once companies invest in childcare facilities at the work place at affordable rates, because the returns there are significant as well. Additionally, the strategic plan for the implementation of the National Gender Policy (2010) indicates that men occupy the majority of key positions in all sectors – something can be attributed to the social constructs that determine men’s and women’s expectations in the workforce. Where men are mostly viewed as decision makers, women are socially expected to be involved in domestic activities, and this hinders a large percentage of the country’s potential labour force. “Women comprise a large percentage of the productive world, and if they are relieved for the briefest moment, they can contribute significantly,” Mrs Irene said, adding that, “With this system in place, there is no excuse for the parent to not to be able to perform at the workplace while also remaining able to spend quality time with their children.” While investment potential is key in ECD, these examples show that there is also a significant socio-economic divide, as well as a gender divide that in effect, positively or negatively contributes to holistic ECD program implementation. Rwf 500,000, for example, is prohibitively expensive for the majority of the country’s population, so while the benefits are certainly valid, they are benefits that few can actually enjoy.

EDUCATION COMES IN MANY SHAPES Benon Talemwa, the Policy Analyst at MIGEPROF in charge of Gender Mainstreaming and Family Promotion, played a major part in developing the ECD Policy for Rwanda. He says, “People need to distinguish between the ECD and the mainstream education. It goes beyond building infrastructures, it primarily starts with the parents’ involvement in the child’s life, especially from birth to three years,” Talemwa said. Because children undergo different stages of early childhood development that includes physical, emotional, psychosocial, and cognitive language development, Talemwa says “There is not an issue of access as long as parents are trained; ECD goes beyond the facilities.” “[The parents] are the primary educators of their children. This is the fundamental and highest possible role of parents towards their children.” However, the challenges associated with working parents who face conflicting loyalties between providing foundational care for their infants and keeping their jobs remains. “To ensure their productivity at the work place, the success of ECD is not

solely the governments. Corporate organisations and institutions need to provide childcare incentives in the form of facilities to enable employees to perform their duties,” explained Talemwa. He added, “This is not something the government can enforce in a policy for the private sector. We can’t force private firms to make provisions for child care, but we can create awareness and encourage them to support their employees out of their own initiative and will.” Additionally, there is culturally challenge of where there is value in education. Terry Van den Akker is an expert in Early Year Education from the Netherlands who has worked with children in Ruhango District and started a toy making business called Chameleon Resources that specializes in early childhood education in the Rwandan context. As the Creative Director, Akker says that all children learn best through play but many people do not fully understand its link to a child’s brain development.

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THE EQUITY DIVIDE Irrespective of the need to find alternative ways to educate young learners, the equity gap needs to be bridged, and ECD can help decrease the gap between the rich and the poor. A survey by Save the Children, Public Awareness of Emergent and Early Literacy in Rwanda, indicates that “Households with higher socio-economic status were more likely to engage in literacy promotion activities.” The research attributed this to different attitudes associated with the promotion of emergent and early literacy. The survey covered 84.7 per cent rural and 15.3 per cent urban areas and took into account the education, literacy, and the socio-economic status of parents. “Families with educated and financially stable parents will provide more support to their children’s literacy and numeracy skills through buying books and toys that enable them to become critical thinkers, while the poor whose parents are illiterate and struggle financially will not be able to do the same,” Dusabe said. “To be school ready, children need to learn through play. Critical thinking starts early in childhood in a language of instruction that enables clear communication between the child and their parents,” Akker said. Yet, there are limitations to this in many Rwandan schools, where according to Terry, “play is not considered an important form of learning,” a challenge that their toy making business grapples with. “Many parents complained about play saying the teachers were not doing enough teaching and were wasting time playing with the children,” she said. With Athanase Ntibazimana, the business Managing Director, mentions that they find it challenging to make and supply their products due to a lack of awareness among both parents and schools. Making educational materials seems like a no-brainer, but businesses that invest in Early Childhood Education are still finding it difficult to launch in Rwanda. “Good quality toys are expensive to produce and these educational tools are supposed to be tax free, but we are still taxed because people do not see the different approach to education that we are taking. It’s an EDC curriculum support approach that would help change the direction of our education system,” Ntibazimana said. Thus, mind-set change requires that investors look to the vast new opportunities presented by ECD because the demand is high. They can make locally made toys, books and other play material that fit within the Rwandan context.

According to research done by Yale University and UNICEF, Economic Crises and Early Childhood, an investment in the early years reaps high dividends when it comes to social and economic development. The research confirms that the “indications are almost a sevenfold dividend per dollar invested in early childhood programs” and that the greater profits in terms of improved educational outcomes are for the most vulnerable children. Additionally, while an effective and holistic ECD approach would predict greater gains in later educational achievement and learning, it also helps bridge a society’s equity gap and thus leads to poverty mitigation. But how can this be put into practice? “This needs to start at policy level, where we are hearing a lot of theories, but nothing practical. We need the collaboration of all stakeholders where leaders can intervene and initiate change within the pre-primary education level. There is no need for Rwandans to escape from their education system, but rather, we have what it takes to change it,” Athanase Ntibazimana said. Ultimately, it is through investment in the education of young learners (zero to six years) that provides an early opportunity to confront the wealth gap and propel greater educational and economic achievements for later years. While EDC may not be a panacea, laying a foundation that ensures full implementation of effective ECD programs across geographic areas and socioeconomic levels can help Rwanda achieve equity – whether social or economic – for the benefit of the entire country.

Fighting Against Genocide Ideology

Commemorating the Genocide against the Tutsi in Rwanda

ACHIEVING BYMIKHAILKUTSOVSKY

CRITICAL MASS IN THE

wanda’s Vision 2020 emphasises the move from an agrarian economy to an information-rich knowledge-based one. A major driving force to meet the requirements of the country’s policy is through leveraging Information & Communication Technology (ICT). ICT has been recognised by many African leaders (including Paul Kagame, who has been called the “digital president”) as a key driver for Africa’s economic devel-

opment. Rwanda can adopt and then innovate on the latest ICT technologies from high-income countries, which are oftentimes inappropriate, unaffordable, and unsustainable for the African context. This concept, commonly known as leapfrogging, creates new business opportunities and improves operational efficiency by applying innovations in IT to various critical sectors. By creating an attractive environment for an efficient

PRIVATE SECTOR

private sector to function along with promoting access to technologies critical to sustaining IT, Rwanda can become a hub for technical innovation in Africa. This is driven by the consolidation and growth of SMEs and start-ups in Rwanda which can operate under proper conditions to create and leverage IT solutions specifically made for the unique socioeconomic and geographic Sub-Saharan African context.

PRE-REQUISITES FOR AN ENABLING ENVIRONMENT The environment in which IT innovation can flourish relies on a couple of key factors that are pertinent to the development of the IT private sector in Rwanda. The global ICT climate is rapidly changing due to the emergence of new technologies, which in turn enable new ways of doing business. But to take advantage of this, the local economy must be prepared to support IT consumption, innovation, and growth through the careful execution of government policies which capitalise on technological trends and establish the building blocks for IT innovation. As Rwanda seeks to become an IT hub, the following environmental factors are key to support an efficient private sector.

1. Efficient government processes: The Rwandan government has made it a top priority to improve the effectiveness and efficiency of the government’s internal processes to create a business-conducive legal and regulatory environment from which companies can operate. Through migrating every government service to an online platform by 2018, Rwanda will be able to minimise the time and money needed for many of the factors which can inhibit the establishment and running of a company. Rwanda boasts a strong stand against corruption, massive government support for ICT, and a quick and simple business registration process. And by making investments in companies like RwandaOnline (which provides e-government services through the Irembo platform), and by leveraging ICT to establish a more efficient legal system through Tele-Justice (which enables remote rulings by judges), the Rwandan government has established a frictionless environment for the formation and growth of private sector organizations.

2. Reliable energy sources: The electrification of the country has been a priority for the government due to the massive productivity increases that come with having access to light and appliances, the ability to charge and power mobile devices, as well as enabling SMEs to reliably benefit from internet-based applications. Due to most of the population living in rural locations, the development and deployment of smart grids has created a more reliable and on-demand energy system which is also more technically advanced than the legacy energy grids in the developed world. Smart grids are energy systems that can run independently when disconnected from the main grid and can simultaneously monitor power consumption at every point, using that data to regulate the flow of power.High mobile penetration rates: In Africa, mobile is king. The development and pervasiveness of mobile technologies has leapfrogged over the non-existent fixed-line telephone network to become the way people communicate and do business. Partially driven by the exponential decrease in the cost of mobile devices, such access to lower cost and more capable devices has had an immediate and direct impact on people’s lives, opening up access to a variety of significantly more affordable services that are as feature rich as traditional IT. 3. Fast and affordable Internet: Broadband internet has become a 21st century necessity for doing business anywhere in the world and by harnessing this technology, countries can effectively pass on a broad range of socioeconomic benefits to their citizens. In the pursuit of establishing a world-class telecom infrastructure offering high-speed broadband across the country, the Rwandan government established a unique public-private partnership with Korea Telecoms in the form of Olleh Rwanda Networks, a wholesaler for 4G internet in the country. By rolling out over 3000 kilometres of high-speed fibre optic cable and covering 95 per cent of the country with 4G by 2017, Rwanda has advanced the timeline on the countries high-speed bandwidth capabilities by years.

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4. Access to cloud computing: Cloud Technologies are the key enabler for Software as a Service (SaaS) products, providing massive benefits over traditional in-house IT, which is too expensive and slow for many SMEs. By utilising server resources that are managed in an external datacentre, developers are able to build applications where they only pay for what resources they use, don’t need operational expertise, and are able to reach a far greater number of users through web applications with trial periods for their product. With an internet enabled mobile device, consumers of cloud applications get the same functionality as enterprise deployments but move their capital expenditures to operational ones by needing less computing resources. This dramatically reduces the on boarding time for new applications, and significantly reduces the cost on a recurring basis. Rwanda has established its own national data centre to boost access to these public cloud services, which in turn will promote development, employment, and facilitate economic growth.

RWANDA AS AN IT INNOVATION HUB As Rwanda seeks to position itself as an IT hub in Africa, it is necessary to distinguish between the two types of IT markets: retail and innovation. The retail market is a reseller’s business, where large corporations with fancy sales offices deliver computers, mainframes, and custom software solutions to business. These are distributed geographically across the massive markets in Egypt, Kenya, Nigeria, and South Africa, but due to Rwanda’s tiny market size, it needs to focus on innovation. This is achieved through being a frictionless stage environment where the creation and iteration of innovative IT solutions takes place before expanding to the rest of the region and continent. Although the IT private sector in Rwanda is still small, there have been many exciting stories, like using mobile money for payment, on-demand airtime plans for mobile data, drone based blood delivery for rural areas, and cash power for pay as you go electricity. These innovations are forms of leapfrogging and are accomplished by capturing the frugal innovation needs of the region. Frugal innovation asks: in the face of nothing, can one create something? To be a sustainable ICT hub, Rwanda must foster innovation from Africans, for Africans – all of whom are capable of understanding the culture, consumer needs, technologies, and available resources of the region. Unlike a developed country where energy, bandwidth, data storage, access to funding, technical talent, and customers are ubiquitous, uninterrupted, and in unlimited supply, the solutions developed in Rwanda will have to work around the fact that those same things are either severely limited, intermittent, or non-existent. To really succeed at being a centre for innovation and experience faster growth in the IT private sector, Rwanda needs to overcome the following factors:

5. Talent: The most pressing issue that Rwanda needs to address is a massive skills shortage in local IT talent. The education system in Rwanda is lagging far behind in producing creative problem solvers who can build out solutions to real world problems. The quality of students in Rwanda is the product of a weak secondary education system, and the lack of strong universities not only locally but also in Sub-Saharan Africa (with no university ranking in the top 500 worldwide). Rwanda can tackle the human capital development problem with a two pronged approach: promotion of domestic learning institutions focusing on nurturing aptitude and with industry skills development and training programs so employees can continue acquiring skills once they enter the private sector. Additionally, Rwanda needs to develop the entrepreneurial spirit among all ages through accelerators, start-up competitions, and with innovation centres such as K-Lab. Even though the median age in Rwanda is 18.4 years old, most people don’t grow up with any exposure to IT or have the same level of comfort and understanding that comes with years of using mobile devices and computers. As a result, many SMEs and individuals simply do not have the awareness of what applications or tools they could be leveraging or what capabilities of ICT they can use to improve their businesses and lives. The lack of African Unicorns (companies valued over $1 billion) causes an absence of household names and role models who can demonstrate the benefits of leveraging IT to the masses. Finally, East Africa experiences a serious problem with talent flow between countries, with many companies having policies to only hire local citizens which Rwanda must address by looking for talent both globally and from neighbouring countries.

6. Culture: Entrepreneurship is difficult, with over 90 per cent of startsups failing and often requiring multiple attempts before achieving success. There is a cultural tendency towards securing a steady job in Rwanda, with most people spending time in innovation labs focusing on building up their resume and skills in addition to taking their chance at being an entrepreneur. Upon receiving a job offer from a local tech company when one is professionally unemployed, family members oftentimes pressure individuals into accepting these jobs to start earning a steady pay check and supporting the family. When combined with the fear of failure, it can be difficult to follow the entrepreneurial dream. By promoting a multi-layered support structure to entrepreneurs in progress, that involves family, private sector, and government, entrepreneurs are more likely to have the tools to execute their ideas.

7. Critical Mass: The final piece lies in critical mass: how can Rwanda get enough talented people, access to venture funding, and companies in the same area to reap the rewards of the network effect? Rwanda does not have the benefit of a large market within its borders, but it offers a frictionless environment, which is alluring to corporations for development and initial testing of products. Through the development of the Kigali Innovation City, Rwanda can consolidate all of innovationâ&#x20AC;&#x2122;s various stakeholders into one physical space.

Mikhail Kutsovsky is a masterâ&#x20AC;&#x2122;s student from Carnegie Mellon University in Pittsburgh, completing his studies at the Rwanda campus.

This space can become an ecosystem driven by a dense population of talented individuals coming from nearby Carnegie Mellon University and other centres of excellence, local and global innovation spaces, and locally based tech companies â&#x20AC;&#x201C; and all driven by the common desire to innovate for Africa. With direct access to funding through an on premise accelerator and Rwanda Innovation Fund (which in its first closing will be a USD $100 million private equity capital fund for early to later stage investments), these individuals will get access to the necessary funding and mentorship to

grow their businesses. With the capability to train members of the digital innovation community on necessary technologies through the industry skills academy within the Innovation City, Rwanda will be aggregating and then nurturing talent to successfully enable economic growth through digital transformation. By combing the technical prerequisites for innovating in the region with a pool of talented individuals and the tools they need to succeed, Rwanda can grow its private sector and become an IT hub on a global scale.

LIGHTING UP RWANDA... BY LAMELLE SHAW

NATURALLY

oday, one in five people in the world do not have access to electricity. In Africa that figure is one in two: a staggering 600 million people. Solar energy and renewable energy in Africa have become hot topics, and investors are being pursued to help light Africa. In the meantime, Africa is lighting herself… starting with Rwanda. Rwanda has been said to have the cleanest city in Africa, is one of the most connected countries in terms of ICT and according to industry players, is now poised to become the first fully electrified country in Sub-Saharan Africa – most of which will be solar energy. Based on the Rwanda Energy Policy Plan, the country plans to reach 70 per cent access to electricity using differentiated grid and off-grid strategies by 2018. The target for grid access is 48 per cent and off grid is 22 per cent. The plan is to increase electricity generation capacity to 563 MW by 2018. The UN launched its Sustainable Energy For All (SE4All) in 2011 with the following objectives to be achieved by 2030: 1. Providing universal access to modern energy services; 2. Doubling the global rate of improvement in energy efficiency; and 3. Doubling the share of renewable energy in the global energy mix. Sustainable Energy for All has generated serious momentum since its launch. Governments from 106 countries and the European Union have partnered with SE4All to advance the three objectives on the country level. The strategy was initially very general, but the Rwanda government created its own strategy that was clear and actionable with very specific targets and deadlines. “The country aims to provide more than 22 per cent of its population with off-grid solar energy by 2018, which

represents nearly half of the off-grid population. This goal, although set by the government, will be completely private sector driven,” says, Morris Kayitare, the Director of Primary and Social Energy Development from the Rwanda Energy Group (REG). The terms of doing business have been relaxed and aim to encourage private sector investors, who are also in line with Rwanda’s strategy to support business oriented development initiatives. This will ultimately lead to a strong sustainable sector that will eventually be able to export their knowledge, experiences and capacity to the region and beyond. Recently there have been more frequent power cuts that last longer, which affect the 24 per cent of households and businesses who are on the grid – still the country is not at the level where the majority of those homes and businesses require generators. For the remaining 76 per cent of the population who are off the grid and in rural areas, and who have to rely on kerosene lamps and candles, things are looking up with the introduction of solar energy. One area that stands to benefit the most is the healthcare sector where uninterrupted power supply can literally mean the difference between life and death.

SOCIAL BENEFITS According to Sam Dargan, the Founder and CEO of Great Lakes Energy, and Co-Chair of the Solar Group, a subsidiary of Energy Private Developers, while the environmental impact has not been tremendous to date, the social implications are significant: solar energy not only saves money in the long run but significantly changes lives. Children can study in the evenings and improve grades, businesses can stay open longer and increase their incomes, and some of the 3.5 million deaths in Africa per year from fire related incidents due to kerosene lamps and other attempts to

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provide light can be reduced. This should lead to better environmental and health outcomes for all. Most solar companies offer payment through mobile money or as a microfinance loan as part of their business model providing for many the first introduction to financial services. Great Lakes Energy started ten years ago with a focus on providing solar power to health care centres across the country. Through their Solar Energy for Healthcare (SESH), they work with several health centres across the country, which benefit thousands. “One health centre impacts an average of 20,000 people,” said Dargan.

Photo graphy Great Lakes Energy

PUBLIC PRIVATE PARTNERSHIPS In addition to these benefits, M-Power County Director Anthony Mburu predicts that over the next decade the renewable energy sector will become one of the largest employers in Africa, the continent with the highest unemployment rate. Off Grid Electric, known in Rwanda as M-Power, has developed an Off Grid Academy, a unique training program designed to recruit and hire top local talent and is now attracting thousands of applicants. “We are excited to be a part of this development but the greatest impact, however, will be the realisation of a sustainable energy future for the off-grid world,” says Mburu.

The government has taken a lead role by creating a task team that targets and assists businesses by creating an enabling environment, and even teams up to provide subsidies for clients who cannot afford the initial investment. Under the umbrella of the Energy Private Developers (EPD), private sector companies in the industry meet with the Rwanda Energy Group under MININFRA several times a week to ensure that targets will be achieved with complete transparency, and that any barriers to business are rapidly addressed. According to the EPD website:

~~ The Government of Rwanda provides transmission access to all power projects at its cost. ~~ Provision of road access, water supply and all infrastructure needed to develop projects. ~~ Generous fiscal and non-fiscal incentives including tax exemptions on power equipment. ~~ The GoR acquires at its cost land for power projects or compensates private developers for land acquisition. There are almost 30 companies engaged in solar-related work in Rwanda. Some of the other key players in solar include Mobisol, BBOXX, Ignite, Waka Waka and MUNYAXECO among others.

FINANCING AND AFFORDABILITY The biggest setbacks to solar energy are upfront investment and trust. Traditionally, a customer has to buy a lifetime of energy from day one, and that requires a significant investment and trust in the company selling it: trust that the electronics, panels and batteries actually work for the years required to recoup the investment. Maintenance is also an issue. Large scale financing is usually provided from international donors through NGOs and other development partners. Dargan sees this as a missed opportunity by local banks who tend to be more risk adverse. “There has been over USD$50 million of financing that has come through over the last six months alone through foreign investment.” Solar energy is not only about those off-grid or rural markets. Homeowners and businesses in cities looking to lower electricity costs and decrease carbon footprints are also benefitting from solar energy. The Solar Water Heater Program created by the government to ease the pressure on the grid in Kigali city is gaining traction. Under the program, the government is offering subsidies up to 50 per cent of total costs. It costs the homeowner approximately $40 to subscribe then $30 per month for two years which covers them for life. This initiative is provided through the Energy Development Corporation Ltd. (EDCL). EDCL is the sister company to the Energy Utility Corporation Ltd., which both fall under the Rwanda Energy Group, previously known as EWASA. Earlier this year, a solar system developed by Centennial Generating Co. became operational at the Genocide Memorial in Kigali, Rwanda. The solar project, installed at no upfront cost to the Memorial, will meet the majority of the facility’s power needs during sunlight hours, reducing costs.

Noting that the majority of solar investment in markets throughout the African continent is currently based in rural areas for pay-as-you-go solar kits in villages and large utility scale projects that sell electricity into the national grid, Founder and Managing Director of Centennial, David John Frenkil, said, “While these rural solar projects are extremely important for the region’s development, Centennial focuses on a currently under-addressed challenge for commercial and industrial customers in and near urban centres that need a more affordable and reliable power supply.”

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All the industry stakeholders active in Rwanda can attest that the market is growing and there is a huge opportunity for businesses to enter this space. For most of these companies, Rwanda is either their first or second location in Africa due to the ease of doing business in Rwanda and the government’s cooperation. Over the last five years, the most significant development has been the increase in solar energy for household consumption. As competition increases, so do product offerings, which leads to increased affordability.

According to Mburu, “It’s not just about Off-Grid, there is a broader movement happening and the ultimate winner is going to be African consumers. They have more choices today for energy than they’ve ever had before. So many people are going to go straight to solar and in 2016 you’ll see that happening on a mass-market scale.” The hope is that once Rwanda proves to be successful in its efforts and achieves its goals that it would be able to transfer that knowledge and those skills to other African countries. Rwanda will no doubt

experience teething problems in the beginning but the targets are achievable and it can be a lesson that public private partnerships do work when all parties involved are committed to the outcomes. The opportunities for interested investors are endless and the market is large. More importantly the impact that can be created in a short space of time and the forthcoming revenues is also drawing attention. BBOXX, who only entered the market two years ago, is already making big strides with some of their new products that will connect people off the

grid to a point where their energy supply will be able to support home electronics and gadgets such as phones, tablets and televisions. Their Managing Director, Justus Mucyo, says “The market is massive, the energy problem is known to everyone, it’s about who brings the best solutions to address this.” According to him, affordability will cease to be a problem over time because the question will no longer be who can afford solar power but who can’t.

SOCIAL BENEFITS: ~~ Access to clean and affordable energy

~~ Better and more study time for children

~~ Reduced risk exposure to customers in terms of technology, performance and reliability

~~ First time access to financial services

~~ Income generation in local communities ~~ Environmental and health outcomes

~~ Emission reductions from replaced kerosene ~~ Positive impact on balance of payments from fossil fuels imports substitution

Lamelle Shaw is the General Manager of Strategic Great Lakes Communications. She can be reached at lamelle.shaw@strategicafrica.com.

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