Rwanda is considered to be one of the most attractive African countries for doing business. In a castle in Wassenaar, the Netherlands, the Dutch Rwandan Embassy and the Rwandan Chamber Foundation organised their first seminar about investment opportunities in Rwanda.
Dutch Rwandan ambassador Immaculee Uwanyiligira called Rwanda “a household name” and even the word “Un-African” was mentioned repeatedly. We took a peek into the Rwandan business community.
Upon arrival it is abundantly clear that Rwanda is investing time and effort into doing business with foreign partners. Leaflets, books, journals and optimistic research papers on business and living in Rwanda are handed out. Rwanda is still partly dependent on aid funds, and wants to be independent as soon as possible.
Investors can invest in a floral park, an airport or a railway. But the event is mainly about sharing experiences. Representatives of the largest sectors (agriculture, infrastructure, energy, finance and ICT) are invited to speak.
Some Dutch companies have already set foot on Rwandan soil, like Dutch bank Rabobank and brewer Heineken. Since the ’80s, most of the Rwandan beer and soft drink factory Bralirwa is in Heineken’s hands. According to Bralirwa Managing Director, Sven Piederiet, who is wearing a Heineken green tie, young Rwandans are responsible for a large part of the company’s success. “These youngsters buy telecom cards, soap and beer. Yes, our beer,” jokes Piederiet.
The World Bank recognises Rwanda as an improved ‘business reformer’ over the past five years. The country has jumped 12 places to 58th in the 2011 ‘Ease of Doing Business’ rankings. How come this small country became a business-friendly nation so rapidly after the genocide? “Is it magic?” asks Frans Makken, Dutch ambassador in Rwanda. “No, but people who don’t know Rwanda nowadays might need some explanation. Unfortunately, there still is a negative image of the past (the 1994 genocide, red.). It’s time for them to lose that disturbing reputation.”
However promising and encouraging this may sound, there are still some drawbacks. By building up an economy, with new enterprises and plants filling the country, the number of skilled people is running out. Piederiet explains that there is currently a shortage of skilled workers: plumbers, managers and marketing staff. An employee of the Dutch Rwandan embassy explains that special scholar programs are being organised for the future. But it will take some time before these people eventually enter the job market. It is ironic too, that the labour market cannot keep up with Rwanda’s rapid economic growth. This problem is apparent in all other sectors, as well as other aspects such as high energy and high transportation costs.
But where to invest?
Potential investors in Rwanda can consult a strategy study by IRSP to enhance investment in Rwanda. Apparently, agriculture (i.e. horticulture, floriculture, poultry and dairy) is the most attractive investment sector. This contrasts with the tourism where establishing an effective business can be challenging due to the high level of competition within the industry.
Political discussion was avoided at the seminar. Yet, Bob van der Bijl, director of the Netherlands-African Business Council (NABC) briefly mentioned that doubts over Rwanda’s democratic values are irrelevant when it comes to doing business.
Surprised by this brief statement he was asked for an explanation after his lecture. “Democracy is not an essential component for building a healthy economy” says van der Bijl. “There are some questions marks about it, but in this case there is no relation to the economic situation.”
In 2010, The Netherlands cut its aid to Rwanda because of the worrying political situation. “Rwanda is a stable country and invests a lot in building the country and society. Companies can provide help and also benefit themselves,” continues van der Bijl. But what is more important? Democracy or business? Should companies keep the government’s decisions in mind? “Well…that’s another issue altogether.”