What Emerging Economies Can Learn from Rwanda

Editor’s Note: This is part three in an ongoing series on Rwanda’s rise. Follow the series here.

Rwanda's emerging reputation as a “rising star of Sub-Saharan Africa” is embodied by its extraordinary economic growth trajectory. One cannot deny the government’s instrumental role in crafting a public policy designed to cater to entrepreneurial growth. Rwanda continues its climb in the World Bank’s Doing Business 2014 Report, up to 32^nd from 54^th in 2013 (it now takes less than 3 days to start a business).

While government support cannot be understated, it can hardly begin to explain Rwanda’s burgeoning private sector. Having worked closely alongside many of Rwanda’s most talented entrepreneurs, I’d like to highlight several other factors that I believe have helped fuel Rwanda’s economic progress. While economic environments vary drastically across the world, the following are all characteristics which can be replicated to some degree by any developing country or community.

Entrepreneurial Initiative

This generation’s success is perhaps best illustrated by stories of entrepreneurs like Greg Bakunzi, Founder of Amahoro Tours, a company that has pioneered community-based tourism in Rwanda. Like many of his peers, Greg received very limited education, living in a UN refugee camp in Uganda until the age of 18. Greg returned to the land of his family in the weeks following the genocide with little else but the desire help rebuild his country and make something of his life. Entering Rwanda as a driver shuttling foreigners between Kigali and the Western province of Musanze, Greg is transforming Rwanda’s tourism industry by offering fun, impact-generating activities for tourists who want to experience more than the famed mountain gorilla of the Virunga volcano range. It is this sort of raw-but-scrappy assertiveness that has jumpstarted most Rwandan-owned enterprises.

These days, Rwanda has established a rich infrastructure to supplement the innate drive of entrepreneurs like Greg. Collaborative workspaces like Kigali’s kLab and The Office offer stimulating and affordable office alternatives and additional support for early stage companies and enterprising individuals determined to bring their dreams to life.

Willingness to embrace outside expertise

While they seem relentlessly confident in their own abilities, Rwanda’s most successful business leaders recognize where they need help and they aren’t afraid to seek it. Rwandan companies have enthusiastically engaged in partnerships with a range of foreign organizations. Beyond some of the world’s most effective global NGOs, Rwanda is home to local initiatives like the Babson-Rwanda Entrepreneurship Center and Bridge 2 Rwanda, an immensely accomplished network of young Americans and Rwandans who are improving opportunities for young Rwandan entrepreneurs. Even Deloitte has recently opened a consulting office in Kigali to provide services like assurance, consulting financial operations, and tax and risk advisory service in both private and public sectors.

But it’s hard to find a more powerful blend of business talent and commitment to private enterprise development in all of Sub-Saharan Africa than Karisimbi Business Partners, a local, self-sustaining management consulting firm. Nearly five years ago, a team of business executives from companies including Microsoft and AT&T moved their families to Rwanda to help build local companies across a diverse range of promising sectors. In this short span of time, Karisimbi’s expertise has helped build management capacity for 62 high-impact companies across more than 20 key sectors.

“I remember the day Karisimbi Partners came to my office,” says Eugene Nyagahene, CEO, Tele-10 Holding Group and one of Rwanda’s most accomplished businessmen. “I said these are the people we’ve been looking for. We need to set up this partnership.” Eugene’s mentality represents an openness, and even craving, for collaboration.

Appeal for responsible investment

Rwanda has also captured the attention of foreign investors that are interested in much more than simple financial gain. Each year, Rwanda’s most promising sectors attract investments designed to create positive and sustainable impact.

One great example is the story of Roger Shaw, who saw the potential for high-end aquaculture in Rwanda. Leveraging his deep background in the industry, Shaw left his home in the USA and arrived in Rwanda in 2011 to launch a commercial, environmentally sustainable fish farm. Having raised over $5 million from family, friends and other investors, Lakeside Fish Farm now offers year-round supply of fresh fish products to the domestic market, employing hundreds of poor Rwandans in the process.

Another even more recent example commenced in 2012, when Karisimbi Partners and a team of international investors recognized an opportunity where most saw great failure. Roughly ten years ago, thousands of poor farming families were promised large increases in incomes from planting Moringa Oleifera. The moringa seed can be cold pressed to produce specialty oils that have tremendous potential for cosmetics and food applications. However, due to supply chain issues and other challenges, the failed program left thousands of acres of uncultivated trees and families worse off than they were before. In response, Karisimbi convened a community of socially motivated international investors to start Rwanda’s first oilseed processing company – Asili Natural Oils. The result can be summed up by the words of one moringa farmer: “As long as Asili continues keeping its promises, moringa is going to change our lives.”

Other prominent social enterprises including One Acre Fund, One Egg, and Nuru Energy have established early roots in Rwanda to test their promising and highly scalable models.

Even large multinational corporations are impressed and inspired by Rwanda’s potential as a place to invest for positive, sustainable impact. Visa, for example, chose Rwanda out of dozens of countries as a test ground for offering electronic payments in “frontier economies.” Additionally, Unilever has long invested in Rwanda’s tea fields to source Rainforest Alliance certified tea for its Lipton brand, while training thousands of farmers in the process.

Commitment to the roles of women & traditional heritage

For centuries, Rwandan women have woven. So what better way to create opportunity for today’s women than by empowering them to do what they’ve always done? Perhaps the most recognizable symbol of Rwanda is the peace basket, but Rwanda is now home to a slew of handicraft businesses producing everything from textiles and jewelry to premium quality home décor products. Established names like Gahaya Links, GLO Creations, and Azizi Life stock craft shops throughout the country, but the nimble-fingered craft-women of Rwanda have set their sites on international markets that are willing to pay much higher prices for their handiwork.

Indego Africa is quickly capitalizing on the potential of foreign markets in the U.S., Europe and neighboring countries in East Africa. Sourcing products from a handful of cooperatives just 5 years ago, Indego now represents 18 cooperatives across the country to take Rwandan handicrafts to the shelves of prominent retail chains like Nordstrom, Anthropologie and J. Crew. Given its success, Indego plans to scale its model from Rwanda to other countries in East and West Africa.

The promise of Rwanda’s handicraft industry has attracted the attention of other major international brands. Kate Spade & Co identified Rwanda as the springboard for its “On Purpose” initiative. Through this for-profit initiative, Kate Spade & Company partnered with Karisimbi Partners to employ over 120 local artisans in Masoro, Rwanda to help establish a new business as a profitable supplier to its retail outlets in the US and internationally.

Nearly all art, from crafts and paintings to music remains true to Rwanda’s cultural tradition, capitalizing on its people’s heritage and core-competencies.

Shift to high tech

Rwanda is a small, landlocked country with limited natural resources and a massive youth population (85 percent of Rwanda's 11 million people are under the age of 35). These youth have been awakened to the limitless potential for participating in the rapidly evolving global knowledge-based economy. Today’s most talented students are graduating from school already working on projects ranging from renewable energy distribution to mobile-based innovations.

At the intersection of alternative energy and mobile stands Henri Nyakarundi. After graduating from a computer science program in the U.S., Henri returned to his home in Rwanda to build the Mobile Solar Kiosk (MSK). As a solution to inefficient charging stations in busy urban areas and the general lack of energy in rural villages, the MSK harnesses solar power to provide a low cost means for East Africans to charge their mobile phones and access energy.

We will continue our series next week with an in-depth discussion on Rwanda's up-and-coming generation of technology-driven youth. Specifically, we will profile Clarisse Irigabeza, Founder of HeHe Labs, a Kigali-based incubator of mobile apps that is poised to help lead Rwanda's mobile sector.

Resilience in spite of great hardship

It’s easy to write with positivity, but this series would be merely a Disney fairytale if it didn’t at least mention the hardship that Rwanda’s entrepreneurs experience each day. It may be easier than ever to do business in Rwanda, but not all business comes easy in Rwanda. In fact, Rwandan business ventures are still hampered by obstacles, not least of which include a largely unskilled labor force, limited natural resources, and intense competition from superior foreign services and products.

Just ask Greg Bakunzi of Amahoro Tours: “Starting and growing a business in Rwanda certainly has its challenges. Because nothing comes easy, it’s critical to set yourself apart from the competition and stay focused on your original vision in spite of unforeseen, yet inevitable obstacles. But those who build their company with an altruistic mission and remain committed to uplift and empower their communities will find a strong support network and endless rewards.”

Working in Rwanda, I was often struck by the reality that most of these exceptional individuals could, at any moment take their talents to another country in pursuit of even greater (and easier) personal success. Yet very few seem to even entertain the possibility. Instead, they push on for their country and, in doing so, weave their own unique strands into the story of Rwanda.

What may not be so immediately obvious is their influence outside of the country. Quietly, Rwanda is evolving into the role model that many emerging regions of the world will look to for inspiration, if not aspiration. As President Kagame will attest, “If we can do it – come out of what happened 20 years ago, nobody should dispair.”

[Image Credit: karisimbipartners.com]

[Image Credit: Indego Africa partner cooperative]

[Image Credit: African Entrepreneur Collective]