African Reflections | The New Face(s) Of Business in East Africa

For a country that recently went through its own Holocaust, life in Rwanda is, on the surface, surprisingly normal. Or is it?

When the idea of a trip to Rwanda first came up a few weeks ago, I was a bit ambivalent. Business duty may call, but Rwanda is, after all, the heart of Africa, the site of a recent genocide, ground zero for HIV/AIDS, 10 time zones, and 30 hours of transit time away — assuming the flight connections all work. And then there’s the matter of $1,000 in immunization shots

I wasn’t entirely sure what I brought to the table. In the era of globalized free-flow of capital, I felt everything that was relevant about Rwanda was well known to the financial markets; that capital would flow at a price — or not at all — based on information that was already “baked into the market.” So there didn’t seem much point in my going. Leave it to the marketing guys to develop the deal, I thought; then bring me in to work the numbers. But the project team was convinced my presence would add something, so off I went, full of shots, plus malaria pills & mosquito repellent at the ready.

I will skip the intermediate stops (which, incidentally, confirmed my thinking on efficient capital markets). It was the last leg of the transit that formed my first memorable impression. Our itinerary took us from Dubai — the most extravagant airport in the world — to Addis Ababa (a major step down in efficiency, luxury & amenities, playing 7-11 to Dubai’s Neiman Marcus), and finally, via a packed coach class seat on Ethiopian Airways, to Kigali International Airport. Along the way the contrast between senseless wealth and chronic poverty grew stark.

africa1.pngThe first surprise about Kigali was the cool climate. There, in the heart of Africa and at 3 degrees south latitude, sits a lush green country of rolling hills and pleasant, cool breezes. Hardly material for an Edgar Rice Burroughs novel!

At the airport, we were met by a driver who whisked us away to the Bourbon Street Café, a cyber-bar just a block from our hotel. Driving from the airport we passed through a mix of neighborhoods – some poor, some more affluent, all of them spotlessly clean. The Rwandan’s set aside every Saturday for “public works,” meaning the public all get out and work together cleaning streets, painting roads & billboards, trimming trees & mowing public lawns. I never saw a piece of blown trash or graffiti anywhere (we resident Los Angelinos could take a lesson here).

The café sits on the second floor of a modern concrete and steel building. It is beautifully appointed with native wood paneling, artwork, africa2.pngcomfortable lounge chairs and tables, served by a well equipped bar dispensing non-alcoholic drinks, and offering gift packages of locally grown coffee beans and T-shirts made of fine cotton. The place was reasonably well occupied with mostly native Africans — businesspeople, students, and others — plus a few foreigners. Most worked on laptops, enjoying café-latte while connecting to the Internet via Wi-Fi. The view to the surrounding hills was unobstructed. A gentle breeze completed the perception: This place is really civilized. It could have been downtown Seattle.

africa3.pngMy second African impression was of people walking. Everywhere I looked from before sunrise till dusk, I found people walking, walking, walking.

Of course, most do not have cars or even motorcycles. (The local taxi is a motorcyclist with two green helmets – one for the driver and one for the passenger who perches on the back seat as the bike careens through Kigali’s hills and streets.) So people walk. One of the initiatives our team set up was a bicycle import business (appropriate technology, noted my economist brain). Not just any bicycle, though. The team included a French national bicycle racing champion and a bike designer. africa4.pngTogether they studied the local conditions and designed a sturdy, 10-geared bicycle, featuring a long platform on the back to enable farmers and businessmen to stack products on the back and get them to market. The bikes are being manufactured in India for something under $100 C.I.F. to Kigali. They sell at a positive markup in-country, with the proceeds going back into the business. A native Rwandan by the name of Alain is in charge of the business (how Alain came to be the local rep is astonishing, but that, as Kipling would say, is another story).

africa5.pngWe were in Kigali to meet government officials gathered for the first East African Conference on Investment. The event was hosted at the Hotel Des Milles Colines (the now famous “Hotel Rwanda”). It is no accident that the conference was held in Kigali. For one thing, the climate is very attractive compared with other choices in East Africa. More importantly, President Kagame has made foreign capital investment a top national priority and the Rwandan’s were major promoters and speakers at the event.

In all the government meetings we held, the overwhelming impression was optimism and a sense of urgency. Rwandan’s are trying to raise their country from the desperate poverty that helped give rise to genocide. It seems as if they know they have only a short time to pull it off — to prove that things can get better. Our particular project is well known to the Rwandan government, agreed in advance as a priority project for the nation, so our discussions were about means to an already established end. Our host from the Ministry of Finance proved insightful and capable beyond my expectations (even though English is his third language). Perhaps it was this sense of urgency and competence that our project team wanted me to experience first hand.

Another of our team went jogging one morning. He was quickly surrounded by an enthusiastic gang of 15-20 kids who were excited and laughing as they followed this tall stranger through their neighborhood. Close to 45% of the population is under 15 years of age. In 3-10 years these kids will be ready to enter the work force. That gives the Kagame government only a short time to jump-start the economy and make a place for these up-and-comers to work. Looking at Kigali’s children I readily saw the reason for the leaders’ sense of urgency.

Another strong impression is modesty and integrity. Over the last 25 years, I have conducted business negotiations in every continent on the planet. It is not unheard of to find competent, modest and honest government officials in developing countries. But too often it’s the other kind you have to deal with. It was a pleasure doing business in Kigali.

Then there is new construction. Everywhere you look new buildings are going up – residential, commercial office, hospitality (foreign investment capital at work, I noted). While the houses look nice on the outside, the interiors would benefit from a visit to the building code section of any US city planning office: doors that open into each other, temperamental electrical circuits, plumbing that doesn’t work, sudden steps down where none is expected, etc. (Note to self: contact a good developer group and invite them in-country to improve the national building codes). I had to catch myself, though. As we stood on the veranda one evening watching the city lights twinkling across the neighboring hills, Susan (a graduate student from NY) commented that when she arrived only six months ago, there was no electricity in most of those houses.

Occasionally, I passed something that struck me as odd, like the public billboards displayed here and there around town urging each Rwandan to pay taxes. “Work hard, pay your taxes, help Rwanda,” was the message. (I can’t tell you how quaint that seems to an American who lives under constant threat of audit and harassment by our Federal and State tax authorities.)

Another oddity was the Ministry of Reconciliation and Public Healing. “Public Healing”? It’s not a mistranslation. Rwandans are still suffering the psychological effects of the genocide. The government formed a cabinet ministry dedicated to helping people heal psychologically and spiritually.

And then there were the stories. I didn’t talk to many folks in depth, but the few I spoke with all had amazing stories. There was Hercule, whose parents fled with the family to Uganda, lived in refugee camps, then parlayed a few hundred dollars into a trucking business hauling freight under the most harrowing conditions between Uganda, Burundi, Tanzania and Congo. His father eventually disappeared, and Hercule took over the business at the ripe old age of 19. I asked where he found the moxie to brave the dangers he faced for so long. His answer: “I did what I had to just to survive.”

Mike’s parents were killed in the genocide. He participated as a witness in the open hearings that were held to bring the killers to justice. I was moved to hear him explain so matter-of-factly the murder of his parents, the justice hearings, and his efforts to move on with his life.

Interestingly, every person’s story I heard included a sentence about how they are Rwandan – not Hutu or Tutsi. It’s a national commitment to ignoring the differences of race, language, & ethnicity that were so much a part of their recent national nightmare.

africa6.pngI suppose that sooner or later each visitor to Rwanda must make a pilgrimage to the Genocide Museum. It’s a small affair — too small to do justice to a civil war that resulted in a million deaths. But in its own way, it is a poignant metaphor for the whole country. The exterior is clean, modern, even elegant architecture, set on a hill so it stands out in the neighborhood. There is a sort of peacefulness about the place, of the kind that I experienced once when visiting Gettysburg. This is hallowed ground. There is no admission fee, but there is a donation box near the entrance. The tour is self-guided, with video and still pictures chronicling the national descent into hell, now just a dozen years in the past. Many westerners have read about it to the point that we are perhaps inured to its horrors. I found a small plaque in the children’s section most memorable. Amidst thousands of pictures of now dead children, this:

Farewell, our children. You were our future.

It is that future President Kagame is trying to reclaim. I must confess the trip did something to get me off my high horse about efficient markets, rational financial analysis, and developmental economics. Maybe those marketing guys were on to something when they insisted I visit Rwanda.

On our last night in town we dined in Heaven (actually, a restaurant called Heaven). The proprietor is a young New Yorker who moved to Rwanda a few years ago with her husband who heads up the Millennium Village in Rwanda. Millennium Village brings in MBA’s, engineers, farmers and other business types and sets them loose to find startup business opportunities (the entrepreneur component of economic development).africa7.png Of course, the country needs everything. The young woman decided to start a restaurant using only locally produced resources and supplies (import substitution). The dining area is a stylish, open air setting with a high gabled roof, designed by a prominent local architect. It is obviously one of the key gathering places for the leading citizens of Kigali. Furniture, decorations, food and merchandise are locally produced. She hires and trains local help, including the chefs. Her goal is to reproduce her restaurant in other parts of the country, creating jobs and employment for local architects, craftsmen, construction workers, artists, and of course, chefs. She confided that it took every dime the couple had, plus loans from family and friends to open the first Heaven. She purposed to do all of her business “by the book,” which, it turns out, all but guarantees she will never make any money from the restaurant. She says this is okay; she is doing this for the good of the country. The food was wonderful. What made our dinner even better was the knowledge that everyone in the restaurant was there for the same cause: answering the call to lift a country out of poverty in one generation.

I met only a handful of people on my first short trip to Rwanda. The coffee farms, gorillas in the mist, volcanoes, the lakes, the game parks, the surrounding countryside and neighboring countries were left for another day. I hope that day comes soon. Each person I met seemed to have that same sense of national purpose. A great tragedy occurred in this country while the world stood by and did nothing. (You can read about it in Romeo Dallaire’s book Shake Hands with the Devil.) From the depths of genocide, a rebel army Colonel, Paul Kagame brought first cessation of hostilities, then security, and he is now trying to build a country from scratch. It is gratifying to see the world community respond at last to the country’s call for help on all levels — humanitarian, private philanthropic, developmental aid, and private investment.

And I believe it will succeed because of the people themselves. If ever there was a place where the role of each person can be showcased, Rwanda is clearly such a place. At the ministry of finance I happened to pick up an application for two experts they were trying to recruit – a lawyer and a finance guy – to help the country execute on its major infrastructure contracts. I found myself strangely attracted by the finance job description. Not only did it fit me to a tee, but – who knows? – maybe even a stodgy old project finance guy like me could find a way to be useful in the legacy phase of my career by helping out in this grand venture.

The names of nonpublic figures have been changed in this post to respect their privacy.

Posted by Geoff Finch on July 30, 2008

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Comments

  • Comment Author
    eM
    Jul 30, 2008 8:56 pm | #

    Ha haa,…couldn’t help laughing about that story,…I’m Kenyan,…in Nairobi most of the time and that’s one of the few good stories that make it to the West.
    Thanks for Doing that piece, there is so much that happens in Africa. That is,….. apart from famines, civil wars and bad leaders.

    Good Story & welcome to Kenya too! The land of hakuna Matata!

  • Comment Author
    gaf
    Jul 30, 2008 10:50 pm | #

    I haven’t been to Kenya in a while. Perhaps soon. Jambo, eM.

  • Comment Author
    Anonymous
    Aug 18, 2008 8:24 am | #

    Am Kenyan n Rwanda is a place i’d like to visit..to understand.I wish many of us Kenyans can get to hear the stories of Rwanda to understand how tribalism can scar us,and never benefit,even the victors in the war..

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