Tar67 rwanda by The Africa Report

rwanda Kagame faced with stark choices

africa-asia Go East, young man!

nigEria polls The men behind the money

N ° 6 7 • f e b r u a r y 2 015

w w w.t he a f r ic a r ep or t .c om

TOP

500 companies Corporate boom falters as commodity woes bite Energy, tourism and agribusiness stay robust

groupe jeune afrique East africa Edition

Algeria 550 DA • Angola 600 Kwanza • Austria 4.90 € • Belgium 4.90 € • Canada 6.95 CAN$ • Denmark 60 DK • Ethiopia 75 Birr • France 4.90 € • Germany 4.90 € • Ghana 7 GH¢ • Italy 4.90 € • Kenya 410 shillings • Liberia $LD 300 • Morocco 50 DH • Netherlands 4.90 € • Nigeria 600 naira Norway 60 NK • Portugal 4.90 € • Sierra Leone LE 12,000 • South Africa 35 rand (tax incl.) • Spain 4.90 € • Switzerland 9.90 FS • Tanzania 9,000 shillings • Tunisia 8 DT • Uganda 9,000 shillings • UK £ 4.50 • United States US$ 6.95 • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA

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SOUTH AFRICA Birth pains of a new left

AFRICA-ASIA Go East, young man!

w w w.the af ric arepor t.com

NIGERIA POLLS The men behind the money

N ° 67 • FE BR UA RY 2015

TOP 500 companies

AFRICA-ASIA Go East, young man!

EXCLUSIVE

RANKING

w w w.the af ric arepor t.com

CONTENTS

RWANDA Kagame faced with stark choices

N ° 67 • FE BR UA RY 2015

Nigeria The

men behind the money

TOP

500

The inside story on the shadowy campaign funders who spend billions on their candidate in the hope of post-electoral rewards

companies Corporate boom falters as commodity woes bite Energy, tourism and agribusiness stay robust

THE AFRICA REPORT # 67 - FEBRUARY 2015

GROUPE JEUNE AFRIQUE

COVER CREDITS: INTERNATIONAL & WEST AFRICA: AP/SIPA - EAST & SOUTHERN AFRICA: FOTOLIA; SVEN TORFINN/PANOS/REA; AIRBUS; DUFOUR MARCO/TOTAL; GWENN DUBOURTHOUMIEU FOR JA; JACQUES TORREGANO FOR JA; SUNDAY ALAMBA/AP/SIPA

GROUPE JEUNE AFRIQUE SOUTHERN AFRICA EDITION

INTERNATIONAL & WEST AFRICA EDITION

COUNTRY FOCUS

04 EDITORIAL Paris-Africa rally 06 LETTERS

47 RWANDA The job crunch The government is betting on services, but can it deliver jobs?

08 THE QUESTION

BRIEFING

52 PEOPLE TO WATCH Movers and shakers

10 SIGNPOSTS 12 INTERNATIONAL

54 AGRICULTURE Harvest of thorns

16 PEOPLE 18 CALENDAR

56 TELECOMS The government’s 4G push 58 NIGERIA IN RWANDA From Lagos to Kigali

FRONTLINE

62 INTERVIEW Francis Gatare, CEO, Rwanda Dev. Board

20 AFRICA-ASIA Go East, young man! The eastern exodus of Africans to China and beyond is creating new opportunities. In the process, it is changing both the Africans who stay and the Chinese who host them

BUSINESS 64 TOP 500 COMPANIES An exclusive ranking Africa’s corporate titans battle it out in our annual list by turnover

26 OPINION Yoon Jung Park, Convenor, Chinese in Africa/Africans in China Research Network

68 RANKINGS Top 500 companies 80 TELECOMS Voice-to-data revolution

POLITICS

82 AGRIBUSINESS Hard side to soft commodities

28 NIGERIA The men behind the money Elections demand big bucks, and many in industry stand to gain. But despite the televised giving sprees, Jonathan may still find he’s scraping the bottom of the (oil) barrel

84 TRANSPORT A smoother ride beckons

34 SOUTH AFRICA The birth of a new left 36 INTERVIEW Zwelinzima Vavi, Cosatu general secretary 38 INTERVIEW Rached Ghannouchi, head of Tunisia’s Ennahdha party 42 OPINION East Africa’s Faustian counter-terrorism pact 44 OBITUARY An homage to KB Mensah, our former Ghana correspondent THE AFRICA REPORT

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86 MINING Digging for a silver lining 88 OIL AND GAS The price rollercoaster

ART & LIFE TOP

500 companies

90 LITERATURE Artists of the floating word The freedom to write beyond the national audience 94 BRIEFS Angolan death metal; Tunisian art 96 TRAVEL More bang for your baa! 98 A DAY IN THE LIFE Aim high, then fly

EDITORIAL

THE AFRICA REPORT A Groupe Jeune Afrique publication

BY PATRICK SMITH

57-BIS, RUE D’AUTEUIL – 75016 PARIS – FRANCE TEL: (33) 1 44 30 19 60 – FAX: (33) 1 44 30 19 30 www.theafricareport.com

The Paris-Africa rally

mid the billions of bytes expended on the Charlie Hebdo assassinations and the subsequent mass demonstrations in January, one of the most succinct yet powerful statements came from a lone banner waver outside the French embassy in Abidjan. Joining the throng of those showing solidarity with the French people and 17 victims of three days of attacks, he held aloft a banner: “Je suis Charlie – N’oubliez pas les victimes de Boko Haram”. If the murders in Paris can prompt national unity demonstrations of four million across France, what should follow from the death of more than 10,000 people caught up in the insurgency in northern Nigeria over the past three years? Five African presidents – Senegal’s Macky Sall, Mali’s Ibrahim Boubacar Keïta, Gabon’s Ali Bongo Ondimba, Togo’s Faure Gnassingbé and Benin’s Thomas Boni Yayi – marched in solidarity alongside France’s François Hollande. Where then is the solidarity with the victims of atrocities in Nigeria or indeed in Kenya, Sudan, South Sudan, Somalia or the Central African Republic? Of equal importance, where is the campaign to promote unity above the claims of ethnic and religious identity? As the demonstrators in France headed homewards, world-weary cynics were forecasting that such shows of support would be short-lived. That may be, but that doesn’t negate the value of people of all faiths and ethnicities coming together. It should help counter extremists trying to deepen social division. The extreme right in Europe – the inaptly named Party for Freedom in Holland, Golden Dawn in Greece and Front National in

CHA I R M A N A ND F O UND E R BÉCHIR BEN YAHMED P UB L I S HE R DANIELLE BEN YAHMED publisher@theafricareport.com E X E CUT I VE P UB L I S HE R JÉRÔME MILLAN

France – are already mobilising support. In Africa, militias and politicians are turning up the volume of ethnic and religious recruitment. If ever there was a time for a unity march against terror, it is now in Nigeria in the election season. One of the first post-independent states in Africa to explode into civil war, Nigeria had a peace settlement of ‘no victor, no vanquished’ that became a model across the continent. Similarly, Nigeria’s religious pluralism that sees so many families coming together from Islam and myriad Christian faiths has set If ever there a pattern. Tragically, the insurgency in the was a time north and much of the for a unity political reaction to it is march undermining all that. Brave voices – such against as Emir of Kano Lamido terror, Sanusi and Bishop of Sokoto Matthew it is now Hassan Kukah – callin Nigeria ing for the marginalisation of the insurgents should be amplified a thousandfold. Why should they not lead a march with African leaders and activists of all faiths joining them in a call for unity? And in Kenya, the need for a united response is becoming more pressing,too. With the historical foundation of the African humanist philosophy of ubuntu – ‘I am because we are’ – such initiatives could develop a much stronger social base. If four million Europeans can brave a northern-hemisphere winter to march for unity, the possibilities for change in the continent that produced Nelson Mandela should give us all pause for thought. ●

M A R K E T I NG & D E VE L O P M E NT ALISON KINGSLEY-HALL E D I T O R I N CHI E F PATRICK SMITH M A NA G I NG E D I T O R NICHOLAS NORBROOK editorial@theafricareport.com A S S I S TA NT E D I T O R CHARLIE HAMILTON E D I T O R I A L A S S I S TA NT OHENEBA AMA NTI OSEI R E G I O NA L E D I T O R PARSELELO KANTAI (East Africa) A RT & L I F E E D I T O R ROSE SKELTON S UB - E D I T O R S ALISON CULLIFORD MARSHALL VAN VALEN P R O O F R E A D I NG KATHLEEN GRAY A RT D I R E CT O R MARC TRENSON DESIGN VALÉRIE OLIVIER CHRISTOPHE CHAUVIN JEAN-PHILIPPE GAUTHIER P R O D UCT I O N PHILIPPE MARTIN CHRISTIAN KASONGO R E S E A R CH SYLVIE FOURNIER P HO T O G R A P HY CLAIRE VATTEBLED O NL I NE PRINCE OFORI-ATTA SALES SANDRA DROUET SOLÈNE DEFRANCQ Tel: (33) 1 44 30 18 07 – Fax: (33) 1 45 20 09 67 sales@theafricareport.com CONTACT FOR SUBSCRIPTION: Webscribe Ltd Unit 8 The Old Silk Mill Brook Street, Tring Hertfordshire HP23 5EF United Kingdom Tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 Email: subs@webscribe.co.uk 1 year subscription (10 issues): All destinations: €39 - $60 - £35 TO ORDER ONLINE: www.theafricareportstore.com D I F CO M INTERNATIONAL ADVERTISING AND COMMUNICATION AGENCY 57-BIS, RUE D’AUTEUIL 75016 PARIS - FRANCE Tel: (33) 1 44 30 19-60 – Fax: (33) 1 44 30 18 34 advertising@theafricareport.com A D VE RT I S I NG D I R E CT O R NATHALIE GUILLERY WITH JEANNY CHABON R E G I O NA L M A NA G E R S FADOUA YAQOBI LILIA BENACEUR ELODIE BOUSSONNIERE US R E P R E S E NTATI VE AZIZA ALBOU a.albou@groupeja.com

editorial@theafricareport.com THE AFRICA REPORT

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PRINTER: SIEP 77 - FRANCE N° DE COMMISSION PARITAIRE : 0715 I 86885 Dépôt légal à parution / ISSN 1950-4810 THE AFRICA REPORT is published by GROUPE JEUNE AFRIQUE

I am A. Kabato Bentu Barley Farmer Beriti Ethiopia

We have learnt that Africa can help us. GROWING TOGETHER.

EINEKEN has had a close relationship with Africa for more than one hundred years. In this time, weâ&#x20AC;&#x2122;ve learnt the importance of partnering for growth. To this end, we are committed to sourcing 60% of our agricultural raw materials from farmers in Africa by 2020. Today, collaborative projects are flourishing in the Democratic Republic of Congo (DRC), Nigeria, Sierra-Leone, Egypt, Rwanda, Burundi, South Africa and Ethiopia. We launched our barley project in Ethiopia in 2013 together with the Dutch Government, our NGO partner Eucord, Ethiopiaâ&#x20AC;&#x2122;s Agricultural Transformation Agency (ATA) and the Ethiopian Institute of Agricultural Research (EIAR). An extensive programme has been put in place: from testing, then selecting the most appropriate barley varieties for the

Ethiopian soil and climate to training smallholder barley farmers. Today, improved seeds are already being used to deliver better quality barley, higher yields and increased household income. So far more than 6,000 farmers have reaped the benefits of our project; we aim to reach 20,000 by 2017. This successful collaboration between community and our company is also beneficial for us. It is helping to create a sustainable source of raw materials, a shorter supply chain, a reduction in transport and importation costs and a lower carbon footprint. We are truly growing together. Many people still believe that Africa needs help. We have learnt that Africa can help us.

LETTERS For all your comments, suggestions and queries, please write to: The Editor, The Africa Report, 57bis Rue d’Auteuil - Paris 75016 - France. or editorial@theafricareport.com

QUIZ

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IS GUELLEH READY TO STAND DOWN? Is a succession crisis really brewing in Djibouti [‘Djibouti: Playing the great game’, TAR66 Dec-Jan 2015]? President Guelleh has promised to stand down before, but any suggestion he is ready to leave should be treated with scepticism. It is also unlikely, too, that domestic pressure on his regime in 2016 will mount to the levels of 2011, during the Arab Spring. It is necessary to distinguish between the interests of states with military bases in Djibouti – focused on piracy, terrorism and access to strategic waterways – and Ethiopia, which is heavily reliant on Djibouti for its imports and exports. It cannot afford any instability in Djibouti. Aly Verjee Rift Valley Institute, London & Nairobi via email

A DICTATOR WITH HIS BACK AGAINST THE WALL

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Africa’s erground a air-conditi his Nka President rooms did oned Jaco a) 1 roo ndla residen b Zum South a add ce? to b) 5 roo m c) 10 rooms ms

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Thanks to everyone who entered our quiz in the Dec 2014-Jan 2015 issue. The winners of a free one-year digital subscription to The Africa Report are: Simon Mwaniki, Pieter Roos, Ayenew Wolde.

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FILLING THE TEACHER GAP I read with great interest your article on the excellent efforts of South Africa and other countries to fill the teacher gap by using e-learning [‘Teacher training ramps up’, TAR64 October 2014]. As founder of the annual eLearning Africa conference, I am very familiar with the consequences the shortage of qualified educators poses to education. Whilst ICTs are a powerful tool, qualified teachers still form the essential core of successful education. eLearning Africa aims to create a “network of individuals who continue to make a difference in the world and support the learners they meet”, and ICT is the enabling factor that binds this network together. Rebecca Stromeyer Founder, eLearning Africa via email

After the official position taken by France and the US on the issue of respecting the constitution, [in the Republic of Congo] you would have to be blind to believe that Denis Sassou Nguesso would risk announcing a change in the constitution [‘Country profiles,’ TAR66 Dec-Jan 2015]. Denis Sassou Nguesso is a dictator but that does not mean he is foolish. His back is against the wall and he knows it. That is why he’s trying desperately to find a consensus that will allow him to pull the wool over everyone’s eyes. To agree to begin a dialogue or to accept a consensus with him now would be absolute nonsense. He has to complete his term of office in 2016 and leave. Bienvenu Mabilemono via email

Correction A graphic on p.105 of TAR66 [Dec 2014-Jan 2015] contained errors in its listing of the Fitch long-term foreign currency creditworthiness of Morocco and Namibia as BBB. The correct rating is BBB-. The graphic should also have made clear that the ratings are an assessment of a sovereign’s capacity and willingness to honour its existing and future long-term foreign currency obligations. We apologise for these mistakes.

HOW TO GET YOUR COPY OF THE AFRICA REPORT On sale at your usual outlet. If you experience problems obtaining your copy, please contact your local distributor, as shown below. GHANA: GTM HUDU ENTERPRISE, Tia Mohammed Hudu, +233 (0)209 007, tiahudu@yahoo.com – KENYA: NATION MEDIA GROUP, Antony Mutunga, +254 (0)72 15, amutunga@ke.nationmedia.com – NIGERIA: NEWSSTAND AGENCIES LTD, Solomon Otinwa, +234 (0)709 8123 459, newsstand2008@gmail. com – SIERRA LEONE: RAI GERB ENTERPRISES, Mohammad Gerber, +232 (0)336 72 469, raigerbenterprise@gmail.com – SOUTHERN AFRICA: RNA DISTRIBUTION, Butch Courtney, +27 (0)11 602 9800 • butchc@mad.co.za – TANZANIA: MWANANCHI COMMUNICATIONS, Emmanuel J Lyimo, +255 716 500 500, elyimo@tz.nationmedia.com – UGANDA: MONITOR PUBLICATIONS LTD, Stephen Eselu, +256 (0)702 178 198, seselu@ug.nationmedia.com – UNITED KINGDOM: COMAG, Mark Swan, +44 (0)1895 433791, Mark.Swan@comag.co.uk – UNITED STATES & CANADA: LMPI, Sylvain Fournier, +1 514 355 5610, lmpi@lmpi.com – ZIMBABWE: MUNN MARKETING (PVT) LTD, Nick Ncube, +263 (0)4 662755, nickncube@munnmarketing.co.zw For other regions go to www.theafricareport.com

ADVERTISERS’ INDEX MCB Group p 2; HEINEKEN p 5; VODACOM p 7; SAHAM INSURANCE p 9; FITCH RATINGS p 13; NESTLÉ CWA p 15; THE AFRICA CEO FORUM p 19; AFRICAN UNION p 25; MIX TELEMATICS p 25; ADEXEN p 33; CWC - NOG 2015 p 33; SUN INTERNATIONAL p 37; AFRICA CONFIDENTIAL p 40; BLOOMBERG TV AFRICA p 41; FANAF p 45; EMRC AGRIBUSINESS p 45; ESRI p 46; RSSB p 50; RDB p 53; IFDC p 55; CALDAS p 56; GPO PARTNERS p 56; AKAGERA AVIATION p 57; SP SOCIETE PETROLIERE p 59; KBS p 61; NIGERIA INFO p 63; TAR SUBSCRIPTION p 63; GROUPEMENT INFORMATIQUE p 75; FEXTON AIF 2015 p 77; TERRAPINN - PEWA p 77; GLOBAL MEDIA ALLIANCE p 83; IMAGE & STRATEGIE p 83; EKO HOTELS & SUITES p 85; AMNESTY INTERNATIONAL p 89; C2I EASYHALLS p 89; IPSASB p 89; WHARTON CLUB OF AFRICA p 89; LIQUID TELECOM p 99; NECOTRANS p 100 THE AFRICA REPORT

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THE QUESTION To respond to this month’s Question, visit www.theafricareport.com. You can also find The Africa Report on Facebook and on Twitter @theafricareport. Comments, suggestions and queries can also be sent to: The Editor, The Africa Report, 57bis Rue d’Auteuil, Paris 75016, France or editorial@theafricareport.com

YOUR VIEWS:

The Ebola crisis has led to difficult decisions for Africa’s footballing elite. Some players were advised to miss the tournament while others face quarantine from their teammates on their return to their home clubs.

Should players abandon their national teams over Ebola?

Yes SAMMY FRIMPONG Editor, Goal.com Ghana

There is a reason why the Africa Cup of Nations is CAF’s flagship football event, and part of that appeal lies in the ability of the competition to draw the continent’s best footballers from around the globe. Already, there have been indications that not all players flying in for the showpiece from outside Africa are comfortable with CAF’s refusal to place the tournament on hold. Football is a contact sport, with lots of tight exchanges, shirt-swapping, handshakes and hugging between players right from before kick-off till they retire to their hotel suites. During a competition that lasts all of three weeks, who is to tell who might be carrying what? Should CAF’s precautionary measures even succeed in offering some protection, there remains a challenge that the players would have to deal with even after the AFCON ends. Take, for instance, Alhassane Bangoura, Spanish outfit Rayo Vallecano’s Guinean winger who begged off one of his country’s AFCON 2015 qualifiers simply because, in his own words, ‘his [club] colleagues were scared’ that he might contract the deadly hemorrhagic fever while on international duty. CAF, by overriding such genuine concerns are, in effect, biting the very hand that butters the AFCON’s bread. Perhaps it is time that hand – namely, Africa’s foreign-based stars – struck back. ●

No KAY SARPONG FIFAlicensed football agent

It is more than reasonable that foreign-based players don’t want to put themselves at risk with a disease that has claimed the lives of thousands. Equally, football clubs have every right to protect the prized assets that they have expended resources on. However the situation has become bigger than the disease itself and threatens to deface the continent as a whole. The Africa Cup of Nations presents a prime opportunity for Africa to stand united against Ebola. The treatment of Africans by Africans has been deplorable in some cases. Africans being subjected to chants of “Ebola” by fellow Africans is never okay. European-based players can offer a very powerful message about the need to stick together. From a safety perspective government bodies have done extremely well to raise awareness and implement preventative measures to contain the disease. Security and safety is surely a priority for Equatorial Guinea and all CAF delegates – with security of players being the top priority. An AFCON tournament without the stars of Europe would be considered a failure. They are the players that many come to see and for many offer hope. This tournament will be the first time West Africa has opened its doors to the world since the Ebola outbreak first began. A tournament without these players would be more of a submission to Ebola rather than a fight against it. ●

No matter what, you should not turn your back on your country. It is high time that African footballers recognise the need and importance of patriotism! Ebola should not be a reason to abandon your country. Yolanda Okiere This is a tough one for the players. But imagine going back to your club and being quarantined for 21 days? It’s embarrassing and downright humiliating. Halima Gelete I would play for my club and earn a better pay and come back to my country later when the Ebola menace is no more. Clement Loshangole The big loyalty must be to the country but we should know that it [their club] is how players earn their money. Majed Mohmed Your club will look after you in hard times. Your country will not. Kehinde Oduntan That’s discriminating. I would pay full allegiance to my country of birth, irrespective of my club’s sentiments. After all, there are millions of clubs in the world that I can play for but I am only eligible to play for my own country at international level! Pho Gimith Njie

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BRIEFING | INTERNATIONAL

BRAZIL

AFRICAN ANGLES

Petrobras payouts The colossal probe into corruption at state oil company Petrobras – the largest in the country’s history – is threatening Brazil’s credit rating as the fallout spirals. Investigators are looking into payouts from Petrobras to senior politicians. Construction firm OAS, which is being investigated as part of the inquiry, was unable to access financial markets, leading it to miss debt repayments in January. Analysts fear other firms could be similarly affected. The economy is already reeling from slowing growth and a falling oil price. ●

GADO Cartoonist, Kenya

The pencil and the sword The deaths of Charlie Hebdo satirists have sent shockwaves through the cartooning community 7

CHINA

What will China do with its $4trn in foreign exchange reserves? Optimists say it will slowly let the yuan appreciate to help a transition to a consumer-oriented economy. The country now controls one third of global reserves excluding gold.

ISRAEL/PALESTINE

Court conflict On 31 December, Palestine’s President Mahmoud Abbas announced the Palestinian Authority (PA) had applied to join the International Criminal Court (ICC). The move is a first step towards bringing charges of war crimes against Israel. The announcement followed the PA’s attempt to get the UN Security Council to adopt a resolution demanding Israel withdraw from Palestinian territories by the end of 2017. Israel and the US, neither of which have joined the ICC, criticised the PA’s action. ●

was shocked just like anybody else. Nobody expected this. When I reached home on the evening of the attacks, I switched on my television. I hadn’t realised that Tignous [a cartoonist at Charlie Hebdo] was one of the guys who died. As it happened I was on a short break, but felt I should also do something in solidarity with our fallen friends and show my disgust with these acts. I felt angry – knowing Tignous, who was a very bubbly, lively character, who came to visit me in Nairobi in the early 2000s … we had such a lovely time – nothing could justify these attacks. For my own work in Kenya, I have been threatened. There have been emails, phone calls. Of course, there are the angry letters of complaint about cartoons, and I think that is fair. But never could I think that it could reach what we saw in Paris. Way before the Danish paper published those cartoons of the prophet, I did a cartoon of suicide bombers which created quite a storm here in Nairobi. I had quite a strong reaction here from

Muslims, so I’m aware of how people can react to such things. There may well be a level of self-censorship now. I can imagine this has been shocking. For a lot of my colleagues, including myself, it is of huge concern. And yes, it is OK to get scared. But I don’t think I am going to change my views on what I need to draw. I think it can be dangerous if you are cowed into submission and we stop doing what we are doing. If we give in to this, then who is next? I didn’t agree with a lot of cartoons I saw out there, but I would never stand up and justify the kind of attacks we have seen or any kind of attacks. It’s unthinkable. If I could get any message to the staff of Charlie Hebdo, it would be, first of all, that it is amazing that they are going to keep the newspaper going. To have the strength to go on is truly impressive after such a horrific act. We are all behind you during this time of grief. We support you. You are the one publication that has stood up for freedom of expression in a really strong way, and it is something to be applauded. ●

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VINCENT FOURNIER/JA

COUNTRY FOCUS Rwanda

Despite service sector growth, many employees remain stuck in low-paid jobs

The job crunch In a landlocked country without natural resources, pushing the service sector and investing in technology is a fine idea. One snag: the strategy has produced too few skilled jobs. Many are now questioning whether the focus should shift to agribusiness and manufacturing By Honoré Banda in Kigali

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gnes Umutoni, 25, wakes up every morning to report to work. By 6.30am at the latest, she is at the premises of a new hotel on the outskirts of Kigali to prepare the counter for yet another hectic day. She works at the hotel as a receptionist for six days a week until 10pm. For the 15 hours a day she works, Umutoni takes home a net salary of RWF100,000 ($145) per month. “It is better than sitting home all day. For that amount, I pay my rent and afford basic needs but I cannot pay my

COUNTRY FOCUS | RWANDA

UGANDA

DEM. REP. OF Lake CONGO Kivu

TANZANIA

KIGALI

R WANDA

BURUNDI

50 km

STARK CHOICES

RWANDA IN NUMBERS POPULATION

12.1 million (2014)

SOURCE: WORLD BANK 2013, AFRICAN ECONOMIC OUTLOOK 2014

URBAN POPULATION (% of total)

28% (2014)

LIFE EXPECTANCY AT BIRTH

64.1

INFANT MORTALITY (per 1,000 births)

48.4

FDI (current US$)

$110.8bn

GDP (current US$)

$7.521bn

INFLATION, CONSUMER PRICES (annual %) TOTAL RESERVES (includes gold, current US$)

4.2%

$1.08 billion

INTERNET USERS (per 100 people)

8.7

MOBILE CELLULAR SUBSCRIPTIONS (per 100 people)

REAL GDP GROWTH (%) 10 9 SOURCE: IMF (RWANDA COUNTRY REPORT, DECEMBER 2014)

8 7 6 5 4 3

Burundi Tanzania Rwanda

2 1 0 2009

2010

Kenya Uganda 2011

2012

2013

NEW FIRM DENSIT Y 1.2 New firm density = the number of newly registered limited liability companies per 1,000 working-age people (ages 15-64).

SOURCE: WORLD BANK GROUP, ENTREPRENEURSHIP DATABASE

1 0.8 0.6 0.4

Start-up reforms

0.2 0

2004

university tuition yet. I want to go back to school,” she says. She already holds a diploma in public administration. “It is insufficient because the cost of living in Kigali is very high. I’m still looking out for better-paying jobs, but it is very difficult to find a job in Kigali. I know so many people who are unemployed, yet they completed university.” Umutoni is among the thousands of Rwandans employed in the country’s much-vaunted service sector who live hand to mouth despite having work.

When hammering out Rwanda’s national business plan, the drafters at the top of the ruling party are faced with stark choices. The country is landlocked and lacks natural resources. Manufacturing and trade in goods is difficult even with perfect infrastructure. The government’s Vision 2020 strategy is focused on Rwanda transforming itself from an agricultural to a knowledge-based economy. “Technology is increasingly becoming part of the daily life of every citizen,” insisted President Paul Kagame in his December 2014 state of the nation address. The government wants Kigali to be a regional hub for high-value services in sectors such as technology, finance, tourism and real estate. But will it work? Can the country gain enough critical mass to displace or complement other regional hubs like Nairobi? One sceptical airline chief executive who prefers to stay nameless points to the several regional hops that planes take to pick up passengers before heading on intercontinental flights. “There just aren’t enough people transiting in and out of Kigali,” he says. It may only be a question of time. Rwanda’s service sector has been among the most dynamic over the 2007-2013 period, with wholesale and retail trade, education, finance and insurance, and transport, storage and communications all growing at average rates in excess of 10% per year since 2007, figures from the UN Economic Commission for Africa (UNECA) show. The sector now accounts for half of Rwanda’s gross domestic product. “The Rwandan case study shows the difficulties of achieving structural transformation for low-income landlocked countries, even when the country possesses, by all accounts, a fairly efficient government bureaucracy and a policy

environment which is generally amenable to private sector development” argues Andrew Mold, a Kigali-based economist with UNECA. “But with bold policy initiatives, and by adopting a pragmatic, and where necessary heterodox, approach, it is possible to overcome the supply-side constraints,” he explains. International trade has been a key factor in expanding the Rwandan economy far beyond national markets, as exports of goods and services increased from $70m in 1995 to more than $859m in 2011. Services increased as a share of total exports from 24 to 46% over that period, with a peak at 64% in 2009, according to the UN Conference on Trade and Development. But Rwanda continues to run a large trade deficit, with the current account deficit expected to deteriorate to $803.2m in 2014 from $537.5m in 2013. Despite the recent surge in service exports, agricultural commodities – in particular coffee and tea – remain an important source of export growth. Critics ask if there are enough jobs in services to warrant a focus on the sector. Growth in the sector has been THE AFRICA REPORT

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RWANDA | COUNTRY FOCUS

very complex in any market,” says Francis Gatare, the RDB’s chief executive, adding that more productive jobs will be created in the long run with more investment in technology and education. Others say that quantity rather than quality is the issue. “We have already made the transition from agriculture to mainly services and industry. There’s still a lot that needs to be done,” says Yusuf Murangwa, the director general of Rwanda’s National Institute of Statistics. “We still need to see a transition in terms of jobs: though the output is already big in terms of service compared to agriculture and industry, jobs are still less [productive].”

SAYYID AZIM/AP/SIPA

SOCIAL INEQUALITY

led by wholesale and retail trade businesses, real estate, telecommunications and financial services. This has largely been driven by rapid urbanisation, though Rwanda remains among the lowest urbanised countries in the world. Projections indicate that about 35% of the population will be living in cities by 2020. FEW NEW POSITIONS

New companies in Rwanda’s service sector have not delivered many jobs. The East Africa Exchange, a commodities exchange founded in 2012, employs 19 people directly. Crane Bank Rwanda, a subsidiary of Uganda’s fourth-largest bank, began operations in June 2014. It has two branches in Kigali and employs about 30 people. Given Rwanda’s rising population density – 416 people/km2 – which is among the highest in Africa, creating off-farm jobs is imperative. The Kigali Conceptual Master Plan lies at the centre of Rwanda’s aspiration to reposition itself regionally and globally as a sophisticated service economy. Kigali’s Central Business District includes the neighbourhoods of THE AFRICA REPORT

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President Paul Kagame dreams of making Rwanda number one in the region in technology, finance, tourism and real estate

Muhima, Nyarugenge and Kimicanga. It is envisaged that these areas be redeveloped as the financial, business and entertainment centres for both Rwanda and the region. The soon-tobe glitzy Kigali Convention Centre by the KG2 roundabout in Kimihurura is currently an inelegant sphere erupting from the ground but should provide the centrepiece for the government’s business tourism strategy. The Rwanda Development Board (RDB) argues that more than 70% of the jobs created in Kigali over the past decade have been in the services sector, particularly in sub-sectors such as telecommunications, finance and tourism. However, a high proportion of this workforce is employed in lowproductivity and poorly paid jobs on a casual basis and without access to the benefits of social security. “The trend shows that we are heading towards our ambition. The issues of productivity and labour are always

And should the country be focusing on more job-intensive sectors instead? Some experts argue that as high-tech services demand specialised skills and create few jobs, their contribution to aggregate employment is bound to remain limited. Manufacturing, on the other hand, can absorb large numbers of workers with moderate skills, providing them with stable jobs and good benefits. For Dickson Malunda, a senior research fellow at the Institute of Policy Analysis and Research– Rwanda, the government has to do more to attract investment in manufacturing and agro-processing in order to address inequality. The failure to create decent jobs in the service sector has contributed to the uneven distribution of income and other benefits of growth, making Rwanda one of the most unequal countries in the region. Statistics from the World Bank for 2011, the most recent year available, show that the top 10% of the population took 43.2% of national income while the bottom 10% took 2.1%. “In just one decade, most East African economies reduced the share of agriculture in the economy and substantially increased that of the service sector. While there is no problem with this, the ability of the service sector to provide decent employment opportunities for rural migrants is weak,” observes a 2014 Millennium Development Goals report, pointing out that less than 10% of the working population in most East African countries is formally employed. That matters in every country. But in a country where the trade-off for curtailed civil liberties is enhanced economic progress, it may matter more. ●

Rwanda Social Security Board

Sowing the seeds for Rwanda’s socio-economic transformation

r. Daniel Ufitikirezi is the Director General of Rwanda Social Security Board since February 2014, bringing vast expertise and valuable experience in asset management and Finance.

Dr. Ufitikirezi was the Deputy Director General of RSSB in charge of Funds Management after heading the Assets and Investments Management Department at the Rwanda Development Board. He possesses commendable knowledge of the private sector having worked as Director of Business Planning, Investments and Incubation Services at Horizon Limited Group of Companies and Acting General Manager of Horizon Logistics.

Dr. Ufitikirezi shares below his strategy in managing a leading institution at forefront of socioeconomic transformation.

He is a celebrated academician who continues to occasionally lecture management subjects and conduct seminars in Rwandan universities. His expensive experience gives Dr. Ufitikirezi a better understanding of the country’s operations and implementing an efficient social security regime.

What is RSSB’S strategy to overcome the housing challenge that faces the country’s urban dwelling? Dr. Daniel Ufitikirezi : RSSB adopted a commercial and residential housing construction strategy by building several high commercial buildings in Kigali and urban centres across Rwanda; our structures are icons of development and seeds of economic transformation for the surrounding communities. RSSB invests in low, medium and high cost residential houses to accommodate all classes of people. Our real estate commitment is an opportunity to invest our surplus funds and meet RSSB’s corporate responsibility which requires investing in vital areas to Rwanda’s development by reducing the gap between demand and supply of houses.

ADVERTORIAL

To what extent is your finance expertise helpful in reshaping RSSB’s model? Dr. D. U. : We use the funds of the institution with due diligence by paying contributor’s benefits and investing the surplus in diversified asset classes to maintain our members’ funds future value. We assess investment risks to protect principal value of portfolio, implement the investment policy and periodically carry out performance evaluations for each asset. Having a good understanding of asset management and finance is vital and hopefully by joining my experience to RSSB’s skilled staff body, we will succeed in securing sustainable social security schemes to Rwanda’s present and future generations.

KINYINYA (MIDDLE INCOME HOUSING)

What are 2015 major projects and your message to RSSB’s members for 2015? Dr. D. U. : In addition to continuous efforts to improve our main 3 schemes; pension, medical and occupational hazards, we are rolling out and completing running housing projects in low, medium and high cost housing. 2015 main infrastructure projects are: - BATSINDA Phase II (construction of 300 low cost houses)

- Muhanga Mixed Use Building

- RSSB TOWER III

- Completing VISION City

- Public Parking in town center

- KICUKIRO and NYARUGENGE

- Mixed Use Complex

- KINYINYA project My message is addressed to the entire Rwandan community. I wish everyone a blissful 2015 and assure them high standard management to ensure proper administration of the funds we are entrusted with. Also, our focus on offering efficient and seamless services has seen us invest strongly in new technologies, like revamping our website to ensure all time availability, navigability, and interactivity for our customers hence now a customer can easily interact with their account and ask various questions through our online platforms and mobile phone based channels.

VISION CITY (HIGH END HOUSING)

Rwanda Social Security Board

About RSSB Rwanda Social Security Board (RSSB) was established by the law No.45/2010 of 14/12/2010 that determines its mission, organization and functioning. It was established after the merger of Social Security Fund of Rwanda (SSFR) with Rwanda Medical Insurance (RAMA) to administer social security in the country. The branches currently managed include; pension, occupational risks and health insurance. The benefits offered under the different branches are; old age, invalidity, survivorship, work injuries and work related diseases and health insurance. Vision

Mission statement To provide high quality social security services, ensure efficient collection, benefits provision, management and investment of members’ funds. Corporate values Integrity - Collaboration - Accountability Respect and Excellence Main responsibilities: • Monitoring and promoting pension, insurance on occupational hazards and maternity leave, anticipated old age pension and other necessary branches; • Collecting and management of contributions as provided by laws; • Paying social security benefits to beneficiaries; • Guaranteeing health insurance services; • Paying healthcare costs to RSSB medical beneficiaries; • Managing the contributions fund; • Prudently investing surplus funds; • Giving advice on social security policy issues; • Establishing relations with other similar regional / international institutions. Funding RSSB is financed by employees’ and employers’ contributions. The pension and occupational hazard scheme total contribution is 8% of employees’ gross salary, of which 5% is paid by employer, 2% goes to occupational hazards and 3% to pension. The total contribution rate under Medical scheme is 15% of employees’ basic salary, of which 7.5% is paid by employer and 7.5 % by employee.

VISION CITY (HIGH END HOUSING)

RSSB achievement figures RSSB’s investment portfolio has recorded notable increase from Rwf 371,365,182,453(approx. $542.5 million) in June 2013 to 466,754,609,364 (approx. 681.9 million) in June 2014. RSSB achievement figures as at June 2012 till 30th/June /2014 Asset type Real estate projects Bank term deposits Corporate bonds/loans Treasury bills/bonds Foreign/local equity Mortgage

Proportional percentages 19.8% 41.0% 1.2% 15.6% 22.1% 0.4

RSSB is working in tandem with the realization of Rwanda broader development programs. 1. VISION CITY (HIGH END HOUSING) The biggest residential housing project in Rwanda to-date, set on a prime 158 hectare tract of land in Gaculiro, Kinyinya Sector of Ga¬sabo district, adjacent to RSSB constructed Vision 2020 Estate and approximately 3 km from the pro¬posed Central Business District at Muhima and 6 km from Kigali International Airport. It consists of over 4,500 units in dif¬ferent configurations from luxury villas to apartments to be built in 4 phases over 7-8 years. Phase 1 includes 504 units on 33 hectares. Construction started in November 2013 and shall last 21 months. Funding is only through equity finance. The provisional completion date for phase 1 is August 2015. Phase 1 will feature a town center of retail shopping space, leisure spots and 3 stars hotel, office block and a convention centre with a capacity of 1000 people. 2. KINYINYA (MIDDLE INCOME HOUSING)

The scheme is mandated to cover all employees in both private and public sectors. An individual may voluntarily register and save with RSSB under the Pension scheme. For private companies to be registered in Medical scheme, a minimum of 7 employees is required.

The second biggest residential housing project consisting of 3,700 units of 2-4 bedrooms set out in four storey apartment buildings. This layout will maximize the available 100 hectares marked out for development of the estate, resulting in a housing density of approximately 60 units per hectare. Kinyinya will have commercial, entertainment, recreational and public transport amenities. It will be built in three phases over 7-8 years. The units will cater mostly to middle income buyers. The expected cost of phase 1 is $ 57 million financed through equity.

Benefits

3. LOW COST HOUSING

If any of the contingencies occurs, RSSB members or their dependents are entitled to receive benefits as provided by the law. Members aged at least 60 are entitled to pension benefits. Policy and military servants aged at least 40 and 50 can apply for pension benefits.

RSSB is in the final stages of acquiring plots of land on the outskirts of Kigali to construct low cost housing units. Several technologies are being considered to provide cost effective, but efficient modular solutions, which can be replicated at other sites to tackle low cost housing issues.

Coverage

RSSB - Plot 1003, Ubumwe Cell, African Union Boulevard Kiyovu, Nyarugenge - PO Box 250/6655, Kigali - Tel: +250 598400 - Fax : +250 584445 - info@rssb.rw - www.rssb.rw

DIFCOM/FC - Photos : DR

To envision a comprehensive social security system that addresses the social security needs of all Rwandans.

CYRIL NDEGEYA

PHOTO NEWS/PANORAMIC

COUNTRY FOCUS | RWANDA

PEOPLE TO WATCH

Breaking ranks and winning races While the old guard is ensuring party discipline and minding the tills, young faces from sports, the media and business are making waves

hen youthful Fred Muvunyi (1) took office in September 2013 as the chairman of the newly formed Rwanda Media Commission (RMC), a media selfregulatory body, most people expected him to toe the ruling party’s line. But after about a year on the job, Muvunyi openly disagreed with the government over its decision to suspend the BBC’s Kinyarwanda-language broadcasts on 25 October due to a controversial documentary, Rwanda’s Untold Story, aired on the BBC Two channel in Britain. Muvunyi argues that the Rwanda Utilities Regulatory Authority, which announced the decision to suspend the BBC’s Rwandan operations, does not have the authority to rule on content without consulting the RMC. Muvunyi’s move prompted threats and questions from pro-government voices not only about the legality of RMC’s mandate but also the powers of its chairman. The government has launched an investigation to determine if the documentary denied the 1994 genocide of the Tutsis, which is a crime in Rwanda. While cycling has been gaining popularity over the years, it was a 2014 triumph for Team Karisimbi’s 20-year-old Valens Ndayisenga (2) that is likely to be a turning point for the sport. He was the first Rwandan national to win the annual Tour de Rwanda cycling com-

petition since it became an international competition in 2009. Ndayisenga’s victory on 23 November not only earned him a presidential handshake but also international recognition. He faces intense pressure to inspire Team Rwanda to win upcoming major cycling events in Egypt and Gabon. Rwandan youth are starting to gain a foothold in business, too. Better known for organising the Rwanda Mountain Gorilla Rally in 2013 as president of the Rwanda Automobile Club, Christian Gakwaya is emerging as a young and successful entrepreneur in the service industry.He currentlyruns RwandaEvents. It has organised large conferences, including the 6th East African Business Summit and the African Leadership Network Annual Gathering in 2014. OLD GUARD, NEW BANK

Nonetheless, power still largely remains with the old guard. In the financial sector, Konde Bugingo is settling in as chief executive officer of the recently incorporated BRD Commercial Bank. Atlas Mara Co-Nvest, founded by banker Bob Diamond and entrepreneur Ashish Thakkar, acquired the Development Bank of Rwanda’s commercial banking arm in October 2014 and set up the new bank. Bugingo is faced with the daunting task of turning it into a viable business. Bugingo

previously served as chief executive of Rwanda’s national payments switch, RSwitch, which enables the settlement of electronic payments. Before working at RSwitch, he was chief operating officer at Banque Populaire du Rwanda, Rwanda’s second-largest bank. Others are also concerning themselves with efficiency and rigour. Before her appointment as minister of gender and family promotion in February 2013, Oda Gasinzigwa (3) was well known for advancing women’s rights, reconciliation and peace. She served as head of the government’s Gender Monitoring Office from 2008 until 2013. From 2005 to 2009, she worked on the government’s National Unity and Reconciliation Commission, which coordinates activities such as tolerance and forgiveness programmes in communities and schools. Gasinzigwa, who is one of the commissioners of the ruling Rwanda Patriotic Front, is asserting her political prowess, sending signals that she is ready to take on more responsibilities in the party. In September, she caught party members off guard when she publicly called out mainly female members engaging in ‘undesirable acts’, including conspiracy against the state and tarnishing the image of the government. She warned that the party will do whatever is in its power to stop dissidents in their tracks. ● Honoré Banda in Kigali THE AFRICA REPORT

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The government and local partners hope the Rwandan flower industry can bloom again

MARTIN ROEMERS/COSMOS

AGRICULTURE

A harvest of thorns

Nsenga, is helping investors to venture into coloured lily production. He plans to distribute plants to smallholder farmers who will help him meet minimum export quantities of at least 2tn per week. As part of a market survey, Nsenga visited several small gardens, purchased flowers and exported them to the Netherlands as samples. “These are artisan farmers who sort the flowers on the bare ground, tie them in bundles and balance them on their heads to get to the market,” he explains. “It took me five days [to get] the 700kg of lilies I bought from smallholder farmers to the auction market. Only half of the consignment of flowers passed the quality test,” says Nsenga. HOPPING PLANES

Transport is a major obstacle to the industry’s development. The management of Rwanda Flora complained about A new flower park holds promise for the commercial Rwanda’s poor flight connectivity, which adds to production costs and compromfloriculture business, but logistics remain a major ises the quality of flowers as shipments impediment, as a consultant’s experiment showed wait at Kigali International Airport’s cold room. Kigali airport has never sustained a he government and its partners large throughput of passengers or freight, useful in demonstrating the country’s in the floriculture sector hope forcing airlines to hop to larger airports potential.” Government statistics show in the region before departing on interthat Rwanda produced 1.4m stems of to learn from failure and benefit continental trips. The low volumes of from East Africa’s blossoming flower summer flowers on 15ha scattered in high-altitude areas in Northern, Western export business. A private-public partflowers produced also make the exports lesscompetitive.Nsengaexplainsthatthe and Southern provinces in 2013. nership between the government and firstairlineheapproachedturneddown Kenya’s Shalimar Flowers offers a chance Lacking the necessary a request to transport his flowers to build up an industry that is the livelifunds, infrastructure and because the small consignment hood of many small-scale producers and expertise, other prowould not be very profitable. is plagued with substantial problems. jects have faced diffiIn September 2014, Shalimar bought Nsenga’s flowers went to culties. Rwanda Flora’s a 25% stake in the government-owned Entebbe International Airport once neat rows of roseGishari Flower Park located 60km east of in Uganda and Jomo Kenyatta bushes are covered by Kigali, Rwanda’s capital. The government International Airport in tall, wild weeds. The few has already invested $8m in the 35ha proKenya before arriving in surviving roses are overject. “Shalimar is bringing in capital and the Netherlands, transgrown. Purchased in 2004 expertise,” says the National Agricultural by Beatrice Gakuba, an aglating into higher costs. Export Development Board’s deputy ribusiness entrepreneur, Whereas regional peers Rwanda's summer director general Magnifique Ndambe Rwanda Flora exported pay less than $1.5/kg, stem flower output Nzaramba. He explains that Gishari will 4-5tn of flowers to Europe Rwandan exporters pay from the Northern, initially produce 1m stems before reacheach week before it closed as much as $2/kg, deWestern and Southern provinces ing its full potential of 3m per year. its doors in 2008. The flopending on the airline. in 2013 “To reach the competitive Clare Akamanzi, chief operating ofriculture business can be flower market with fresh ficer of the Rwanda Development Board, be lucrative, but it remains SOURCE: MINISTRY OF AGRICULTURE flowers, Rwanda needs explains the national importance of the risky and requires steady direct cargo flights to Europe,” argues project: “We are looking at developflows of capital. Rwanda could break into East Africa’s ing the entire value chain for the hortiNsenga. These constraints may scare culture and floriculture industry, from high-growth horticulture sector, but away investors even as the government breeding, regulations, farming support, the competition is fierce and the chaldangles incentives, including serviced land in a country where land is scarce. ● cold chain, skills and cargo. The Gishari lenges weighty. NINAF is a new local Kabona Esiara in Kigali flower project, when completed, will be consultancy whose founder, François

1.4m

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Potatoes in Rwanda are serious business! The hilly region in the northern and western provinces of Rwanda next to the Ugandan border is surrounded by beautiful volcanoes and is blessed with relatively rich soils, creating a great potential for potato production. The region seasonally produces some 950,000 Metric tons of potatoes, equivalent to 57% of the total production of potatoes in the country. Recognizing this potential, IFDC’s regional CATALIST1&2 projects (Rwanda, Burundi and DRC) have been working, in collaboration with national governments, research institutions and other IFDC projects, in this potato value chain since 2010. The strategy of the project is to play a catalyzing role by working with partners in the field entrepreneurs, farmers, farmer organizations, cooperatives, local governments and financial institutions, to increase potato production and create active and successful markets. IFDC’s projects encourage collaboration between the different actors in the potato value chain and actively link farmers and other stakeholders to input (agro-dealers, distributors) and output markets (processors, collectors, supermarkets, consumers).

“Irish potatoes were vanishing in North Rwanda. Thanks to training in positive seed selection they’re back!”-Marie Seed Producers invest in "$-'*')(#% .(&/ 0"1"234156 support; a soil-less technology that can increase seed potato yields five-

fold!

Key intervention areas in the potato value chain are; ! "##$%% &' ()*+&%, fertilizer recommendations, ccess to fertilizers, finance and quality seeds and training in positive seed selection by farmers. ! "#$#%&'(#)* &+ strong producer organizations; capacity building regarding technical skills such as ISFM (Integrated Soil Fertility Management) and (financial) management skills for cooperatives, linking the members to financial institutions and highly profitable local and regional markets in urban areas in Rwanda, Burundi and Uganda ! Entrepreneurship development; Capacity building for entrepreneurs who need assistance in shaping their business, but also for those who want to optimize their role as leaders in the value chain Actors supported by the CATALIST-2 project formed 24 groups of seeds producers. Eleven new entrepreneurs entered the business of producing mini tubers, providing farmers with healthy plant material. Through the in 2014 initiated Shape and Lead Agri-Business challenge, 19 entrepreneurs in the potato value chain have been selected for support and capacity building. IFDC (International Fertilizer Development Center) is an international public organization working to increase agriculture food security and food security. CATALIST-2 is funded by the Netherlands Directorate-General for Development Cooperation (DGIS) and the Swiss Agency for Development and Cooperation (SDC) For more information on CATALIST-2 and IFDC visit: www.ifdc.org or follow @CATALIST_2 on Twitter For more information on the Shape & Lead initiative visit: https://shapeandlead.bidx.net/

CATALIST-2

COUNTRY FOCUS | RWANDA

TELECOMS

Smartphones and smart policy Rather than wait for companies to invest in 4G networks, the government is taking a leading role in expanding internet coverage and developing a knowledge-based economy

CYRIL NDEGEYA

t the Smart Rwanda Days organised in Kigali last October President Paul Kagame reiterated his belief that broadband should be treated “like a utility” and made “affordable to as many people as we can.” Sixteen months earlier, this viewpoint had helped seal a deal worth $140m with Korea Telecom (KT). The two parties formed a publicprivate partnership to build a high-speed internet network with 4G Long-Term Evolution (LTE) services to cover 95% of the population within three years. The government entered the partnership with KT after local operators did not respond.

Rwanda continues to favour a pragmatic approach to the line between state and market, maintaining a focus on the development trajectory of the economy. “Plan A was to involve the telecoms operators, but they were reluctant because they had invested heavily in 3G networks. They had no incentive to invest in 4G on a large scale. But we were interested in a rapid roll-out across the country, including rural areas,” says Jean Philbert Nsengimana, Rwanda’s minister of youth and ICT (information and communication technology). Rwanda launched the first commercial phase

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 The government plans to offer micro-loans to make 4G handsets more affordable

of its 4G high-speed system on 11 November 2014. The government/KT joint venture olleh Rwanda networks (oRn) acts as the wholesaler to mobile network operators and internet service providers. Despite more than 7,000km of fibre-optic cable across the country – of which 4,500km is government owned – only a quarter of Rwanda’s 11.3 million citizens can currently access the internet. The government says 4G will change this. As of June 2014, the mobile penetration rate in Rwanda was 68.1%, compared with an internet penetration rate of 25%, although internet penetration grew 10.6% from the first quarter to the second quarter of 2014, according to Rwanda Utilities Regulatory Authority. “Broadband is there to fast-track business, information exchange, information generation and consumption. It’s a foundation of a knowledge economy,” says Nsengimana, adding that the network will accelerate the country’s ambition to move from an agriculture-based to a knowledgebased economy. In the last two quarters of 2014 ICT contributed just 2% to Rwanda’s gross domestic product.

More than 98% of mobile devices in Rwanda do not support 4G

PRICEY HANDSETS

There are many obstacles to the wide adoption of 4G services. Despite government subsidies, 4G smartphones remain out of reach for the majority of Rwandans. Currently, more than 98% of the handsets and devices on the Rwandan market do not support 4G. The government is considering offering tax incentives to suppliers. It also wants banks to offer micro-loans for smart devices that would be payable in 12 monthly instalments. The government signed a deal in November 2014 with Brazilian device manufacturer Positivo Informática and its partner BGH Group to start manufacturing and assembling computers and tablets in Rwanda as a way of bringing affordable devices to the market. Positivo BGH, which will start operations in May, expects to produce more than 700,000 devices in its first year of operations. Data on 4G networks is also expensive. Currently, the average retail price for 5GB of data on 4G networks is RWF18,600 ($27.1). Operators charge an average of RWF800 per GB on 3G networks. However, at current prices, Rwanda’s LTE is the most affordable in Africa, says Ebenezer Asante, MTN Rwanda’s chief executive officer. “Over time, like all technologies, as scale is gained and affordable routes for deployment kick in, the pricing will fall for the benefit of all,” Asante says. There are other areas of progress, and the country’s implementation of 4G is running alongside programmes such as the Smart Kigali initiative. Launched in September 2013, the programme provides free Wi-Fi internet in public places across Kigali, including commercial buildings, bus stations, airports and public buses. ● Honoré Banda in Kigali THE AFRICA REPORT

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COUNTRY FOCUS | RWANDA

Nigerian businesses are rushing to connect with tech-loving Rwanda

NIGERIA Big brother, little brother One seeks to become a middle-income, ‘knowledgebased’ economy; the other to join the top 20 in the world. You scratch my back, as the saying goes…

eter Ogidi-Oke’s first official asOne Rwandan Defence Force reservsignment as Nigeria’s resident ist, a veteran of the rebellion that helped end the 1994 genocide and bring Preshigh commissioner to Rwanda ident Paul Kagame to power, recalls his was to attend a military function in Kigali. What happened when he arrived experiences with Nigerian soldiers in surprised him. “When [the Rwandan] Darfur. “The Nigerian soldiers don’t joke soldiers saw me, they started with their prayers, you know hailing me – Igwe! Igwe!” he they’re mainly Muslims. recalls. Igwe is an honorific When they put their guns for chiefs of the Igbo ethnic down to pray, we surround group in south-eastern Nithem to protect them.” Milgeria. He wanted to know itary cooperation continhow they came to know of ues apace, and a group of the word. The Rwandan Nigerian military officials soldiers told him: “We are conducted a study tour in Rwanda Rwanda in April of last year. Nigerian-trained officers!” is ranked the second Closer ties deliver beneRwandan army officers most efficient country have been receiving training fits for both countries. For in Africa in terms in Nigeria’s junior and senior Rwandans, Nigeria offers acof business regulation military colleges for deccess to Africa’s largest ecoby the World Bank’s ades. Patrick Nyamvumba, nomy, a market bigger than Doing Business index 2015 Rwanda’s current chief of the entire East African region. SOURCE: WORLD BANK For Nigerians, Rwanda – its defence staff, is a gradumodest population of just ate of the Nigerian Defence more than 12 million notwithstanding – Academy. He enrolled as a cadet in offers a foothold from which to explore the late 1980s. In 2009, he succeeded Nigeria’s General Martin Luther Agwai the region. Rwanda is one of the fastestas force commander of the UN–AU Misgrowing economies in the world, aversion in Darfur – to which Nigeria and aging8%perannumoverthepastdecade. Rwanda are two of the biggest contribBut the two have taken their time to utors of troops. strengthen their relationship. Before

2nd

the appointment of Ogidi-Oke in 2012, the Nigerian high commissioner resident in Uganda oversaw diplomatic relations with Rwanda. Rwanda sent its first high commissioner to Nigeria in 2011: Joseph Habineza, who worked for Nigerian Breweries before going on to become sports minister in Kigali. Nigeria’sPresidentGoodluckJonathan attended President Kagame’s inauguration in September 2010, and a year later paid a two-day state visit to Rwanda, during which the two governments signed a series of bilateral agreements. Kagame attended Jonathan’s inauguration in May 2011 and the World Economic Forum on Africa in Abuja in May 2014. In between, he paid a private visit to Lagos to deliver a lecture for the Oxford and Cambridge Club of Nigeria. SPORTS, HEALTH AND BUSINESS

High commissioner Ogidi-Oke says there are regular visits by professional and sports groups. Rwanda is also one of the countries to which Nigeria sends health professionals as part of its Technical Aid Corps scheme. Lagos hosted a Nigerian-Rwandan Economic Summit in May 2012, two months after representatives of the Nigerian Economic Summit Group – a federation of Nigerian businesses – visited Rwanda. Whereas Nigerian businesses tend to set up their East African operations in Kenya, the region’s largest economy and an air transport hub, they ● ● ● THE AFRICA REPORT

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JONATHAN TORGOVNIK/REPORTAGE BY GETTY IMAGES

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COUNTRY FOCUS | RWANDA

● ● ● now are considering Kigali. The city is set to become an important transportation centre, as RwandAir now flies to more than a dozen destinations in Africa and the Middle East. It started flying to Lagos in 2011 and now offers daily flights between Kigali and Nigeria’s economic capital. Because it offers a cheaper service than competitors like Emirates, RwandAir is increasingly a popular alternative for Nigerians travelling to Dubai. The signing of a delayed bilateral air service agreement should lead to improved air transport between Nigeria and Rwanda.

ESCAPE FROM LAGOS

Kigali, only four and half hours from Lagos, is unlikely to remain a well-kept secret for holiday-seeking Nigerians. At the serene airport in Kigali a Nigerian TV journalist says: “I come here when I want to run away from the madness of Lagos. It’s my hideout.” Another element of the strengthening relationship is Rwanda’s receptiveness to business and investment. The World Bank’s Doing Business index for 2015 lists it as the second most efficient country in terms of business regulation in Africa. Its 55th place on Transparency International’s Corruption Perceptions Index in 2014 puts it well ahead of Nigeria, which took 136th place. “A lot of Nigerians are coming here. It’s one of the places in which it is easiest to do business,” says high commissioner Opening an office in Kigali was plain sailing, says iROKO’s CEO Jason Njoku

Ogidi-Oke. Airline Services & Logistregion. Nollywood star Ramsey Nouah ics, a Nigerian company that provides is a regular face in Rwanda, attending catering services at the international the annual gorilla-naming ceremony airports in Lagos and Abuja, announced and teaching acting workshops. He is the launch of its operations in Kigali in currently shooting a film, Love Brewed December 2013. Nigeria’s Access Bank in a Rwandan Pot, in the country. The same goes for music. Nightclubs and GTBank have also opened shop in in Nairobi, Kampala and Kigali are thrivthe city, and others plan to follow suit. ing on hits from Nigerian superstars like The East Africa Exchange (EAX) is Davido, Flavour and P-Square. Davido, a commodities market that operates the headlining musical act across the sub-region, as for July 2014’s Liberation Day well as in Nigeria. Launched celebrations, was received at in 2013 as a partnership Kigali airport by President between Nigerian businessman Tony Elumelu, German Kagame and his family. investor Nicolas Berggruen “There’s so much presNigeria, Africa's and former US assistant sure on me to bring Nigerian largest economy, secretary of state for African musicians and actors [to is almost 70 affairs Jendayi Frazer, EAX is Rwanda],” says Ogidi-Oke. times larger than headquartered in Kigali City “I think this is one country that of Rwanda Tower, a 20-storey high-rise that genuinely likes us. They SOURCE: WORLD BANK building that opened in the really receive Nigerians very rapidly modernising city in warmly.” At the World Ex2011. EAX country manager for Rwanda port Development Forum in Kigali Kadri Alfah says the decision to have the in September 2014, the Rwanda Deheadquarters in Kigali was not a difficult velopment Board encouraged local one. Because of its bid to become “the companies to learn from the develophub for trading financial instruments ment of Nollywood and the Nigerian in East Africa,” he explains, Rwanda service sector. has created “favourable conditions” LINGUISTIC TIES for entrepreneurs. Nigerian internet entertainment comNigeria and Rwanda also now share pany iROKO opened its East Africa office a common language. Decades before in Kigali in 2014. “Our vice-president for and after independence, Rwanda was Africa spent two hours at the Rwanda a Francophone country. The Kagame Development Board and was issued government decided, in 2008, to reputhe company certificate just six hours diate that linguistic legacy and switch after leaving. Electronically. And it was to English. The decision was in part free,” wrote iROKO founder and chief due to deepening tensions between the executive Jason Njoku in a blog post. Rwandan government and France. But Nigerian movies are popular across the it was also a hard-headed economic move, aimed at consolidating ties with the English-speaking countries – Tanzania, Uganda and Kenya – that dominate the East African Community (EAC) economic bloc. Rwanda became a full member of the EAC in 2007, and, in November 2009, formally joined the Commonwealth, making it the second country to become a Commonwealth member without historical or colonial ties to Britain. Though largely ceremonial, Rwanda’s membership has improved business connections with countries like India, Canada and Australia, not to mention African Commonwealth members. Rwandan writer Fred Mwasa says: “A lot of business has come in, which may not have come had we [remained] French-speaking.” ●

JONATHAN TORGOVNIK/REPORTAGE BY GETTY IMAGES

THE AFRICA REPORT

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using the international standard Mifare Classic Contactless Card for public transport which is operating successfully since introduction and the public have taken to the system wholeheartedly.

igali Bus Services was formed in 2006 with the aim of becoming the most modern and innovative bus transport company in Kigali.

Starting with 20 Toyota Coasters, the company soon moved to modern Urban City buses which were needed to meet demand and to allow the operations to be more profitable, since the new urban city buses would carry on average 3 times what a coaster can. With financing from a regional development bank the company purchased 20 buses new urban city buses with Euro II Emission Standards and a capacity of sitting and standing of 80+ passengers, the first of their kind in the region! A short time later, with commercial loans from ECOBANK Rwanda, twenty EURO II standard urban city buses were purchased from YUTONG, the world’s largest bus manufacturer and winner of many international awards. In 2014 we took another step in line with our “Green Policy” and opted for EURO III fully automatic computerised gearbox, buses again from YUTONG.

Kigali Bus Services wins Tender for Zone1 in Kigali City CHARLES NGARAMBE Executive Chairman

Customer Benefits >> Quicker transaction time >> Reduced cash handling >> Discounts, benefits and loyalty programs >> Increase in convenience BRENDAN M. J. MAGUIRE Managing Director

We became the first company providing support of Cleaner Air and smaller carbon footprint to help reduce the Greenhouse gases emissions. In November 2014 we added to the fleet another 30 units of smaller sized urban city buses to the fleet. The company now operates a fleet of 135 buses. Kigali Bus Services Limited is now the Authorised Service Agent for YUTONG Buses in Rwanda.

Kigali Bus Services Limited commits to less Air Pollution in Kigali! >> Reduction of Pollution Levels of CO and CO2 >> Healthier air for the citizens to breath >> Less health problems and cost to due effects of Air Pollution >> Less emission of greenhouse gases >> Less global warming >> Cleaner city >> More modern city appearance from proper public transport buses >> More safety and comfort for the passengers

Our mission: “To be the best public service transporter for passengers in the Region”

Our Vision “To be the reference of a quality passenger transport system in the whole of East Africa”

Automatic Fare Collection System In 2011 the company introduced the first Automatic Fare Collection system

www.kigalibusservices.com

Kigali Bus Services Limited now operates the main City Centre Routes as per the Concession awarded by the authorities for Zone 1.

Company Benefits

>> Reduced fraud and cash handling costs >> Advanced cash flow >> Improved revenue through increased in customer throughput >> Quicker transaction time >> Zero infrastructure cost Business Model >> Increased management efficiency and flexibility >> Improved reports management >> Stable customer base

Competitive Comparison Kigali Bus Services product contains unique features: >> Lower cost of operation >> Upfront fare collection >> Low fraudulence >> Multiple ticket access and collection points >> New Urban City Buses >> Customer Service

Our Future As the company enters 2015 there is satisfaction that so much has been achieved in a relatively short time, however, there are further goals to be achieved in both our growth policy and in how the business is managed and financed. In this regard we are expanding into Bujumbura in Burundi and are now attracting investment from various international bodies that have seen the huge potential in urban mass transport systems for Africa. A present we are at the design stage for introducing BRT Bus Rapid Transport) system in Kigali in cooperation with the authorities as Kigali and other cities in the region continue their never-ending growth year after year! We are also cooperating in the Smart City Initiative and the further expansion of technology in the sector. Kigali Bus Services Ltd. PO BOX 1266 - Kigali- Rwanda info@kigalibusservices.com

DIFCOM/FC - Photos : DR

ADVERTORIAL

Kigali Bus Services limited, J ourney W ith U s

COUNTRY FOCUS | RWANDA

INTERVIEW

Francis Gatare Chief executive, Rwanda Development Board

Every inch of the economy is for private investment The Rwanda Development Board, a body tasked with coordinating government activity and encouraging investment, is paving the way for multi-sector growth through privatisation TAR: You were appointed as chief executive in July 2014. What are your immediate priorities at the Rwandan Development Board (RDB)? FRANCIS GATARE: We want to make sure that Rwanda’s tourism products continue to be attractive. We want to diversify tourism products – whether it is in terms of leisure,culturaltourism,adventure tourism – but also diversify further into meetings, conferences and business-related tourism. We also want to diversify the export base beyond tourism. We want to promote service exports including financial services, education and medical-related tourism services. We want to make sure that finance services in particular become a core export service that continues to employ many Rwandans. Despite the tremendous growth in the financial sector, there is still room for growth – growing financial services beyond retail banking to get into sophisticated financial products. The capital markets are going to be important for growing these extra services, and we are going to be seeing more businessescominginthenextfewyears, whether it is investment banking, fund management or insurance – all kinds of financial products. Despite Rwanda being ranked favourably in the World Bank’s

CYRIL NDEGEYA

Doing Business report, private investment remains low. Why? Our country is still rebuilding after a destructive past. This has made public investment into the economy necessary to bring it to a footing where private investment begins to operate. There are some sectors that purely require public investment at this level of development, in particular basic infrastructure to support private investment but also opportunities being created for the private sector. There is a huge potential for growth of our economy because every inch that is still serviced by public-sector investment is space that is very soon going to be replaced by private investment.

“More than 60% of any new investment in our country is driven by Rwandan investors” The investment code is currently under review. What are the major changes expected? As the economy evolves, priorities are evolving and becoming a lot clearer. We wanted to make sure that the investment code reflects development today. There are emerging priority sectors such asenergy,manufacturing,financial services, information technology [IT] infrastructure and IT-related services, health and education that need to be adequately supported.

But also we want to align to the realisation that we are seeing local investment play a critical role in the economy. We are seeing more domestic investment – more than 60% of any new investment in our country is always driven by Rwandan investors. We also want to make sure that this is reflected [in government policies], and to support entrepreneurship and small businesses, both domestic and international. The high cost of doing business remains a thorny issue for investors. How are you addressing this? A lot of this also has to do with the kind of facilitation that we do at the RDB. We have been reducing transaction costs. Now, you can register your business within six hours and at no cost. Regarding labour costs, there is no other country that has opened its doors for able and skilled people to come and work like Rwanda has done. I don’t agree that labour costs are high when in actual fact the mobility of labour in Rwanda is the most flexible of anywhere in Africa. We are trying to make labour more productive by increasing the skills mix, increasing training and increasing efficiency in terms of the mix of labour and capital equipment. ● Interview by Honoré Banda in Kigali

THE AFRICA REPORT

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ADVERTORIAL

Fitch Ratings’ Africa Connection ion By Fabrice Toka, Office Head, Business & Relationship Management, Sub-Saharan Africa

itch Ratings’ connection with Africa goes back over 20 years. In 1994 we were the first international credit rating agency to establish an office in Sub-Saharan Africa (SSA), in Johannesburg, and also the first to rate South Africa.

Fast forward to 2015 and our African rating universe now covers over 170 issuers with international and national scale ratings across a diverse range of sovereigns, local governments, financial institutions, corporates, project finance and structured finance. This spans 21 sovereigns including new ratings for Côte d’Ivoire and Ethiopia last year, major banks like Standard Bank, Ecobank, Attijariwafa Bank and First Bank of Nigeria, large and household corporate names such as Eskom, MTN and OCP, regional institutions such as the African Development Bank and water projects in South Africa. Africa is a fast-growing market. Attracting investment, both locally and internationally, is an essential part of Africa’s broader development strategy. Fitch’s intimate understanding of African economies provides investors with the context and insight necessary to help make credit decisions. From an investor point of view, ratings provide a commonly understood benchmark and an objective opinion on creditworthiness. Furthermore, some institutional investors have policies in place that do not allow them to invest in non-rated securities.

Fitch’s strengths in Africa are based on the local expertise and regional market knowledge we have gained in the past 20 years, combined with the global reach of an international rating agency with over 100 years of experience of rating the entire fixed income universe. Recent Africa initiatives by Fitch include us hosting our first ever ‘Fitch on South Africa’ event series in Johannesburg and Cape Town last October as well as ‘Nigeria: The Credit Picture Pre-elections’ event in Lagos last April. Also, given the global interest in Africa, we ran investor meetings in the US and an event series in London, Paris and Frankfurt last December on ‘Sub Saharan Africa: New External Challenges, Old Domestic Challenges.’ A video summary from these events by Richard Fox, our head of Middle East and Africa sovereign ratings, on the impact of lower oil prices and prospects for further eurobond issuance in the SSA region is available here or at this link: https://www.fitchratings.com/jsp/general/video_all.jsp?id=3934337287001

For further information on Fitch in Africa please contact us at: south.africa@fitchratings.com

DIFCOM/FC - Photos : DR

Credit ratings help an issuer tell their story to the global investment community and this is especially true in markets, such as in parts of Africa, where data inputs and transparency are sometimes less abundant. For example, econometric estimates published by Fitch in 2013 suggested sovereign ratings contributed to net foreign direct investment (FDI) flows in SSA between 1995 and 2011, adding on average the equivalent of 2% of GDP in FDI every year into rated countries.

DAY IN THE LIFE EXTRAORDINARY STORIES OF ORDINARY PEOPLE

PASCAL PERICH FOR TAR

aim high, then fly Jackson Mvunganyi started life in a refugee camp in Uganda. His voice is now heard across the continent as he hosts Up Front from Washington DC

y family is from Rwanda. They moved to Uganda before I was born. They walked hundreds of miles with many others to build a new life in a place they hoped would welcome them. I spent the first few years of my life in a refugee camp. We rarely had enough to eat, and there wasn’t much space to play. Still, I was with my family, and this was enough. When I was old enough to start school my parents sent me to Kampala to live with my older sister. All my life I had been told that Rwanda was the land of milk and honey, a place of endless opportunity. I missed Rwanda even though I had never been there. I finally went to Rwanda when I was 18 to go to college. This was a few years after the genocide. The Rwanda I had learned about no longer existed. No one was singing the songs my parents had taught me. The buildings and trees looked different than I expected. And of course the country was rebuilding. But there were many opportunities. I often listened to the local radio station after class, and I noticed that the newsreaders sometimes mangled certain English words. My English was very good as I had spent much of my childhood reading African literature. One day I went to the radio station and told the producer that I could read better than anyone there. He laughed at me and asked me to leave, but a few days later he invited me to try out for the newsreader position. He gave me the job.

I moved to Washington DC in 2000 to continue my education. I took a bachelor’s degree from American University, and a master’s from the University of Maryland. Shortly after graduation I applied for a job with the Voice of America. When they called me in for an interview I decided to give them my pitch as well. I had an idea for a show that would reach a younger generation of listeners. They hired me and accepted my pitch. A few months after I started, Up Front was born. I interview a variety of people each day. From prominent politicians to writers to artists to everyday Africans who simply want their voices to be heard. The reason I love my job so much is because I’m able to hear from Africans from across the continent. We reach an audience of 50 million in Africa each week, and we are influencing many policy conversations.

when we are leaders Because Up Front is devoted to the concerns of the youth of Africa, each day I hear about the things that ail us, the ways in which our leaders might improve. Each day, too, I have an opportunity to hear about what the future of Africa might be. Once we become the leaders. Because of the show, I often speak to students at universities around the US. And, as you can imagine, a lot of my work happens online, where I gather questions for the show and topics for future conversations. President Obama is one of my followers on Twitter! I hope I can use the show as a platform to continue to lobby on behalf of Africa diaspora causes. I also hope I can inspire young immigrants to aspire for more. I am very proud of the show. I love what I am doing, and I see myself doing this for a while. As for the future...who knows? Anything can happen. ● Interview by Tope Folarin THE AFRICA REPORT

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