Rwanda’s capital Kigali is fast becoming East Africa’s communications hub. Foreign investment and a culture of anti-corruption are behind the boom. Monocle watches a city log on.
It is mid-morning and the Bourbon Coffee House in Kigali is packed. At a table on the veranda overlooking the city, two government ministers drink cappuccinos. Nearby, a group of businessmen gather round a large table for a meeting, while inside the tables are taken by young Rwandans and expatriates tapping away on their laptops, using the wireless internet and ordering macchiatos.
It is a scene that would not have been imaginable three years ago, let alone 10 when the tiny, landlocked country of 9.9 million people was still trying to recover from the effects of the killing fields of 1994. An estimated 800,000 Tutsis and politically moderate Hutus were slaughtered in just 100 days by the genocidal Hutu regime, while the world stood by and watched.
But Rwanda is changing, and while Hollywood films such as Hotel Rwanda focus on the horrors of the genocide, the country is beginning to show signs that it could be the newest business hub for sub-Saharan Africa.
Corruption, which blights so many African governments, is almost non-existent here. The major roads are smooth and wide. And internet access, which is patchy at best throughout the continent, has been transformed with a high-speed fibre-optic cable network installed throughout the country.
A well-trained, and relatively well-paid, police force provides a far higher level of security than that found in Johannesburg or Nairobi. But perhaps most importantly, Rwanda’s government has in its own words “rolled out the red carpet” to foreign investors. Entrepreneurs and investors from across Africa, India and the Middle East are flocking to Kigali, with the largest investments coming from US and British companies.
IT giants such as Qualcomm and Google are said to be considering setting up offices here. E-Tools, a US software firm, has set up a branch in Kigali; a British company, Lab International acquired Rwanda’s largest tea factory; while US investors Opportunity Bank International has also opened a base here.
Banking has become one of the most profitable industries with UK private equity investor, Actis, acquiring one of Rwanda’s largest banks, BCR. In total, Rwanda has had more than €550m of foreign direct investment in the past seven years – and the figure has been increasing annually.
Rwanda likes to brand itself as the “land of a thousand hills”. It may be an underestimate. Everywhere in Kigali is somewhere on a hill – for good measure the city is surrounded by hills – rising up towards the clouds. It makes cycling difficult, but bicycles are the favoured form of transport for many Kigali residents.
Bourbon Coffee, situated at the top of a hill, is not just a place where Kigali’s great and good meet up – it is also a prime example of the city’s thriving economy. Standing a good foot taller than any of his customers, Arthur Karuletwa, Bourbon’s owner, left Rwanda as a teenager in 1994 on a basketball scholarship to the US. His decision to return in 2002 was as much moral as business-minded: “There was a calling to come back and play a role in reconciliation,” he says.
The coffee house, which opened in February, would not look out of place in Paris or Palma. Indeed, Karuletwa hopes it won’t be long before that is exactly where it’s found. He says he gets several requests a day to open a new branch somewhere outside Rwanda.
His story is not unusual. Rwanda’s large diaspora is returning home, driven by a desire like Karuletwa’s to help rebuild a broken country and by the business opportunities that Rwanda now provides.
“There are people returning from all over the world and they are full of all kinds of ideas,” he says. “Someone has been in Germany and takes a great idea from there, someone else has been in Britain, someone else in the States. What we used to see as a plight – being a refugee – has become a positive.”
The driver for so much of the new investment is the Rwanda Investment and Export Promotion Agency (RIEPA). The agency acts as a one-stop shop for new investors, where investment certificates and land rights, customs issues and immigration can all be sorted in the same building. Clare Akamanzi, the agency’s deputy director general, claims it takes just one hour to get a work permit and three days to register a company.
“The first decade following the genocide we concentrated more on reconstruction of the country,” she says in her modern second-floor office. “To grow it was clear we had to concentrate on private-sector development.”
Rwanda’s economy has long relied on agriculture. Outside the capital there is little development. To switch from a largely agrarian to a knowledge-based economy, investment in information and communications technology (ICT) became a priority, says Akamanzi.
“ICT” is Kigali’s favourite abbreviation. It peppers conversations with government ministers, city officials and investors. Kigali’s ICT park is, at first glance, an unassuming set of low-rise buildings. But some 15 companies, including Rwanda’s first mobile-phone assembly plant, have moved in, attracted by state-subsidised utilities and wireless internet access.
“We have made a deliberate decision to build an ICT hub for the region and ultimately the continent,” says Patrick Nyirishema, deputy executive director of the Rwanda Information Technology Authority. “How do you turn a Third World economy like Rwanda’s, with no natural resources and landlocked, into a hub? You invest in ICT.”
But for all Rwanda’s investment in fibre- optic cables and high-speed internet, it means nothing without a proper external link to the global broadband network. East and central Africa is the only region in the world without such a link. There are currently three separate schemes to create a series of underwater cables linking the region to the rest of the world but none are expected to be completed before 2009 at the earliest.
“One of the biggest challenges we have is the awfully high cost of communication here,” says Nyirishema. Currently Rwanda relies heavily on satellite connectivity. “It is way too expensive,” he says.
Not everyone is happy to sing the government’s praises. President Paul Kagame is accused by the opposition of running an autocratic regime and few people are prepared to speak out. One businessman criticised RIEPA (“they say they roll out the red carpet, but they quickly roll it back in again”), but refused to speak on the record. “You don’t want to make enemies in Kigali,” he said.
The investors keep coming though. The city is buzzing with rumours that Macy’s will be the next global company to set up a base here. New buildings are springing up all over Kigali. When complete, Kigali City Tower will be the tallest building in the country. First though, the owner needs to find a new architect. The second group of designers has just been sacked and work on the building site has pretty much ground to a halt.
The man in charge of its construction, a South African called Pat Fransman who has worked on building projects across Africa, is desperate to get going again. “Normally it takes me three months to build a good team of local guys. Here it took six because they have very little experience. But these guys know what they’re doing now. I know they will make me happy.” Standing at the top of the tower’s newly finished car park, Fransman has a perfect view of the hills surrounding Kigali. “There’s a lot happening here. Every day you see new buildings and houses going up. Ten years from now you won’t know this place.”
A new international airport is being built 30km outside the city to cope with the expected increase in flights. Kenya Airways, South African Airways and the national carrier, Rwandair, provide daily flights to Johannesburg, Entebbe and Nairobi, as well as regular links to Dubai and Bangkok. Via Johannesburg and Nairobi there are daily connections to major European cities. Brussels Airlines has just announced that it is increasing its services between Brussels and Kigali to three times a week and that it is in talks to take over Rwandair. Once in Kigali, metered taxis are abundant, while the moto-taxis (motorbike taxis) are registered, the drivers wear uniforms and even provide passengers with helmets.
Marija Kovacevic had a comfortable life, working as an art director in California for the software giant Oracle. Along with her husband she left the US to work for an NGO in Rwanda before deciding to start their own company here – an advertising agency.
“The opportunities are excellent here,” she says. “We have seen the place grow and grow and grow before our eyes. It is a fresh market, with no corruption. Anybody coming here with a good idea is bound to have success.”
Kigali has also, she says, tried to keep some of its character. “They have learnt the mistakes of developed countries caused by uncontrolled progress. There are no plastic bags and there are restrictions on cutting down trees. It is so clean and pristine and has managed to avoid the chaos going on next door.”
Rent in Kigali for a three-bedroom house can cost anywhere between €300 and €600 a month. As the city grows new areas are being built on the outskirts of the city, known to locals as New Kigali. While the number of expats is growing, most of the new houses are being taken by Rwandans. Estate agents are rare. Most people find houses through word of mouth or by seeing the signs outside new apartment blocks.
In the new shopping centre the owners of Excel Italian Lights are benefiting from the rise in Rwanda’s middle class. Josee Unkunda’s shop sells imported lamps and chandeliers. “Excel is short for excellent,” she says. Since they opened six months ago sales have exceeded their expectations.
“This is no longer considered a luxury,” she says, of lamps that generally cost between €20 and €75. “People understand taste now. They have travelled. People are seeing what’s good, what’s modern.”
There are a handful of good restaurants, from Italian to Chinese, and the number is growing. The owner of the Indian Khazana, Gary Verma, thought he got the short straw when he moved to Kigali three years ago. The family also owns restaurants in Kampala and Nairobi. “I didn’t think we’d do well here. The spending power seemed very little.”
In three years though, much has changed. “So many people have moved here to start up businesses – it has made a huge difference.” Many of the city’s movers and shakers can be found in Republika, a bar and restaurant in Kiyovu. On the night Monocle had a bottle of Primus, the Belgian ambassador was holding court at a large table in the corner. The major nightclubs, Cadillac and Planet, tend to stay open until the sun rises.