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EAC
GROWSRegional bloc opens the doorfor Rwanda and Burundi
April-June, 2007 http://www.kenyarwandabiz.org Edition 01
GOING WILDTourists ock in despite
travel advisories -Pg 20
ECONOMYChina woos Africa-Pg 30
SCIENCERwanda shows the way
to boost funding - Pg 28
NVESTORS BET ON RWANDA - Pg 12
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CONGRATULATORYMESSAGE
Ernst & Young congratulates the Kenya-Rwanda Business Association
KRBA) on the o cial launch of its East Africa Business Focus Magazine
e are proud to be associated with KRBA in promoting investment in
East and Central Africa.
The Ernst & Young ofces ment oned above are all members of Ernst & Young Global.
en a an a wan a anzan a
Kenya-ReTowers Upperhil Ernst & Young House Rugigana House Ernst & Young
agat oad 1 ement oad venue de a a x u d ng, oors
ox 44 Shimoni Ofce Village ox Azikiwe Street
00100 Nairobi, G.P.O P O Box 7215 Kigali, Rwanda P O Box 2475
Tel: +254-20-2715300 Kampala, Uganda el: +250-572634 Dar es Salaam, Tanzania
Fax: +254-20-2716271 el: +256-41-343524 +250-572528 Tel: +255-022-2667368
o :+ 4- - ax: + -41- 1 ax: + ax: + - - 4
Mob: +256-752760082 Mob: +254735994400 Mob: +255-0784780334
www.ey.com
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East Africa Business Focus April - June, 2007
Contents
enyas Export
Promotion Council forms
crucial link between
exporters in Kenya and
he available business
opportunities
17 Exporting ideas
Kenya Rwanda Business
Association opens new chapter
The land-locked nation is a virgin territory with high potential for growth
Investors bet on Rwanda
Since Narc took over power
in 2002, it has embarked on
o c es t at ocus on econom c
eve opment, u ng an
rehabilitating infrastructure and
creating employment.
resi ent u iantao
30 China woos Africa
6 Cover StoryPartnering for the future
9 FeatureRwandese delight
10 Agriculture
Mumias stirs sugarmarket
Investment
36 Taking Stocks
14 ConstructionKenyas changing skyline
16 ManagementTips on building a successful team
Trade
23 Trade ties that bind
30 China woos Africa
20 TourismGoing Wild
26 CharityGiving a home and a
future
28 Science & TechnologyTime for experiments
32 TaxKRA tightens noose on tax
cheats
34 CounterfeitAll that gliters ...
38 Life SkillsSix Business Blunders
25
12
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April - June, 2007 ast Africa Business Focus
Editorial
s er
nya-Rwanda Business Association
itor
rence Mukiebe
nsu t ng tor
p en rma
vise Editor
er Sibomana
ntr utors
ques amaz , on o ur a, ranco s a asrceline Nyambala and Kimani Chege andwton utuma
o uct on ss stante a t
e- ress erv ces
vid Mwangi
otos
S Kenya, Douglas Otieno
vert s ng a es
orkomm Media Servicesntact person: Clifford Nturibi. ox -ro , enya
: +254 20 2733209 / 2734484ail: [email protected]
tr ut on
nya
ian MuliRBA Kenya Ofce
. ox -irobi, Kenya: +254 20 607154
wan a
wan a ce. Box 6627
gali, Rwanda: +250 08302001
t Africa Business Focusis published quarterly by
or omm e a erv ceson behalf of the enya
an a us ness ssoc at on. Views expressed in
pu cat on are t ose o t e aut ors an o not
essar y re ect t e pos t on o t e pu s ers.
pyright 2007East Africa Business Focus.
rights reserved. Material may be reproduced if prior
ngement is sought and with acknowledgement of
t Africa Business Focusmagazine.
I
n Africa, the birth of a chil
the family in which it is bo
soc ety. s s t e oy we ee
Business Association (KRB
aunch the Kenya Chapter oft the same time unveil the ina
magazine,East Africa Business
The magazine, to be publi
times every year, will highlight
ect ng us nesses n t e re
w t a v ew to e p ng promot
best practices in business and
promote growth of trade in the
region.
A new-born child is easily
ntegrated into the society
n which it is born. It is our
ope t at usiness ocusn , w e accepte y t e us ness commun ty an pro ess ona s n t e
region. The magazine and the association present a forum for members and the larger
business community to learn from each other for the better management of their
respective businesses and overall growth of economies of our nations.
For us to realise growth in our businesses, there must be good governance, a
principle that has been a focus of our governments in the region, hence the visible
growth of our economies.
wou e to c a enge us nessmen to ta e a vantage o t e con uc ve
nvestment env ronment an exp ore t e var ous us ness opportun t es n t e reg on
to further expand our horizons.
I would also like to invite those who havent joined the Kenya Rwanda Business
Association to do so because as the saying goes, there is strength in numbers. We
need to form a strong team of business people that can lobby regional governments
on issues affecting business development, a function we hold dear.
For the members of the association, this has been a long journey ever since the idea
o a us ness c u was oate . rom recru t ng new mem ers to t e ga aunc o
t e wan a apter o n cto er ast year, mem ers ave put so muc e ort
to make this association a success.
And their efforts are bearing fruits. From the point at which KRBA was just an
dea, the association has grown to a level where there are members from various
professions and businesses represented either as individual or corporate entities.
What remains for these members is to actively be involved in various activities that
the association hopes to engage in, including workshops, training and interactions
w t ot er us ness assoc at ons n or er to mprove our ways o o ng us ness.
s an assoc at on, we prom se to prov e t me y an accurate n ormat on geare
towards promoting ideal business opportunities in the best interests of our members.
And in what other better forum than through our magazine!Let us all support this initiative and let us know your views by writing to us.
Explore!
Chairman KRBA
Expanding New Horizons
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East Africa Business Focus April - June, 2007
By EABF Correspondent
When Rwanda and Burundi joined
the East African Community last
November, the region crossed
a major milestone. The move
now expanded the community
to ve nations. This substantially increased
prospects of trade and opened more investment
opportunities for citizens in the region.
he inclusion of the two countries was
endorsed at the EAC heads of State summit
chaired by Kenyas President Mwai Kibak
wanda and Burundi, which neighbour eacother, had been seeking to join the bloc sinc
ts relaunch in 1999.
This decision opens a new chapter in ou
cooperation, Tanzanian President Jakay
ikwete told an EAC summit in Arusha.
congratulate Rwanda and Burundi for joinin
our family of EAC members.
It was President Kikwete who broke th
news to members during a plenary sessio
at the summit, which was also attended b
Partneringfor the
C
The expanded East
African Community
leaders move to tighten
ties to increase prospects
of trade and open
investment opportunities
for their citizens
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April - June, 2007 ast Africa Business Focus
he presidents of Rwanda, Burundi, Uganda
and the semi-autonomous Tanzanian island ofanzibar.
You have joined a vibrant community with
a lot of prospects, President Kibaki said at the
end of the one-day summit.
Size mattersor President Yoweri Museveni of Uganda,
he large size of the regional body matters a
ot. According to him, it will make its market
attractive to the world. A functional common
arket is currently emerging in the region
backed by agreements on tariffs across thecountries borders.
Rwandas President Paul Kagame expressed
his countrys readiness to play an active role in
he development of the regional economic and
political bloc.
Initially, EAC had only Kenya, Uganda and
anzania as members. Over the last one year,
he three countries have been campaigning to
ransform the region into a political federation.
he community agreed on a customs union last
year and plans to launch a common market for
ts population of about 90 million by 2010.hey also plan to have a monetary union by
009 and a common president and parliament
by 2010. At present, its most active institutions
are its secretariat and customs union, but it also
has a regional court and Parliament.
Divergent viewshe rst attempt at East African Cooperation
ended in 1977 because of the three partners
idely divergent political and economic
From Left to Right:
President Amani Karume of Zanzibar,
President Paul Kagame of Rwanda, Ugandan
President Yoweri Museveni,
Kenyan President Mwai Kibaki,
Tanzanian President Jakaya Kikwete and
President Pierre Nkurunziza of Burundi in a
past EAC summit in
Arusha, Tanzania
ory
future
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East Africa Business Focus April - June, 2007
hinking. The predecessor of the current
economic bloc was formed soon afterndependence from Britain in the early 1960s.
Leaders of the three countries agreed that the
egion would be stronger operating as a single
economic unit and ultimately a political
ederation.
The three founder member states of the re-
aunched bloc had earlier said that Burundi
ould not qualify for membership unless it
eld democratic elections and tackled the
nsecurity that had plagued it during a civil war
hat killed 300,000 people.
Rwanda and Burundi had applied to join
he economic community to boost regional
rade. Their applications had not been acted
on for several years as the original members
orked to get the ve-year-old organisation
on its feet and set up a customs union that sets
common duty rates for imported goods among
he countries.
Things have since changed for the better.
Had Rwanda and Burundi not maintained
peace and stability, Kenya, Uganda and
anzania would have automatically turned
down their application to join the bloc. But
hen they were admitted to the fold, the two
countries became the rst French speakingEAC members, making the bloc bilingual.
Donors now support the government of
Burundian President Pierre Nkurunziza, who
as elected in 2005. The new administration
has been trying to boost the countrys fragile
economy after 12 years of conict.
Rwanda, too has been struggling to rebuild
its economy which was shattered after the 1994
genocide in which 800,000 people were killed
in three months.
The small landlocked country in the Central
Africa borders Uganda in the north, Burundi
in the south, Tanzania in the East, and the
Democratic Republic of Congo in the west. It
is the most densely populated country in Africa
ith a population of eight million people and a
total area of 26,338 square miles. More than 90
per cent of the population lives in rural areas.
More womenThe country has more women than men. Women
account for 54.3 per cent of the population,
ith 34 per cent of them heading homes and 92
per cent involved in subsistence farming.
wanda is a land of great diversity an
beauty. Popularly known as the land of thousand hills, it has six volcanoes, 23 lake
and numerous rivers, some forming the sourc
of the great River Nile.
BeautyLandscapes in this green country ar
breathtaking. Many a visitor to Rwand
has remarked that the physical beauty o
the country is without equal on the Africa
continent. Spectacular volcanoes and dens
tropical forests dominate the north of th
country, while gentle hills and valleys, calm
lakes and turbulent rivers dominate the rest o
the country.
urundi on the other hand, occupies a hig
plateau divided by several deep valleys. It
rich in natural resources that include a variet
of minerals. However, the society is large
agricultural. Besides the EAC, Burundi, Keny
Rwanda, and Uganda are members of th
Community of East and Southern African Stat
(Comesa). Formed in 1994, the Comesa blo
has 20 members but Tanzania withdrew in 200
citing trade imbalances with member states.n
Over 18 million consumers join East African Community as Rwanda and Burundi are admitted
Regionalmarket expands
Cover Story
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April - June, 2007 ast Africa Business Focus
Rwanda is fondly
referred to as the land
of a thousand hills
t an s to ts eaut u
mounta ns an t e
world-famous mountain gorillas
that attract thousands of tourists
into the country every year.
Mine was not a tourist expedition
but it turned out to be.
As a delegate from Kenya to
w tness t e aunc o t e enyawan a us ness ssoc at on,
Rwanda Chapter, I was
overwhelmed by the hospitality
of the Rwandese. I must say I
was a bit apprehensive before the
safari because the only stories I
had heard or read about this tiny
r can country was t e
genoc e an won ere w at
to expect upon arrival. To my
surprise, the people of Rwanda
turned out to be so welcoming
to visitors.
No sooner had we disembarked
from the Rwandair Express ight
t an we were su en y azz e y
t e eauty o t e y an . n
as it turned out, the hospitality
we had experienced on board
the ight to Kigali was not just a
professional courtesy. It reected
the warmth and friendliness of
the Rwandese.
ec ng n was sw t an
efcient. We were promptly
informed that we would not need
to buy local network sim cards,since our hosts, KRBA-Rwanda
Chapter, had some ready for
us at the hotel. What a pleasant
surpr se
ur rooms at t e ote es
Mille Collines were beautiful
and clean. But this was not just
another hotel. It was the Hotel
Des Mille Collines which starred
Rwandese delightCathy Kamauwas a delegate to the KRBA launch but ended up as a part-time tourist.
Here is her take on life in Kigali
recently in a box ofce hit movie,
Hotel Rwanda.
Soon after settling in, our hosts
were threatening us with a hectic
agen a o un- e act v t es
start ng w t a coc ta oste y
the Kenyan ambassador to Rwanda,
Amb. Alex Keter, and his gracious
wife.
The ambassador and his wife
made us all feel quite at home, with
some Kenyan business people with
us nesses n ga a so present
at t e party. etween moments
of bonding and laughter, we were
introduced to various Rwandesebusiness people.
ater that evening, we ended up
at a nyama choma joint eating
Kenyas favourite dish with an
assortment o con ments. t sure y
e t e ome. en o to s eep we
went, preparing for Day Two.
Two winks and it was sunrise!
Time for breakfast and the
business presentations. The
presenters knew their stuff and
took us through the paces painlessly
before we took off for a round of
go n t e a ternoon. e o ers
an non-go ers too qu c y got
into their vans and off we went to
yarutarama.
The golfers could hardly wait
to tee off with their Rwanda
counterparts. As for the non-golfers,
we had all the time in the world.
e sat an ate ms a s s ewere
meat an got to now eac ot er.
Before we could say the 19th
hole, it was evening and time togo back to our hotel to spruce up for
the KRBA launch dinner. We were
shown to our respective tables, and
conversation was soon humming
roun t e a room. s was t e
us ness t at roug t us to wan a
in the rst place, but there was much
more besides. But that is a story for
nother day. n
Checking in
was swift and
efcient. We
were promptly
informed that we
would not need to
buy local network
sim cards, since
our hosts, KRBA-
Rwanda Chapter,
had some ready
for us at the
hotel. What a
pleasant surprise!
Feature
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T
he year was 1967 and the
Government of Kenya was exploring
the possibility of growing cane in
Mumias area ruled by a king before
t e co on a era.o ac eve ts goa , t comm ss one
Booker Agriculture and Technical Services
now Booker Tate) to carry out a feasibility
study.
At the time, the area was underdeveloped.
Land was not being put to good use as
farmers grew food crops on small portions
w e t e rest o t e r an was e.
e re at ve remoteness o t e area an
poor communication network prevented
the growth of a vibrant market economy.
However, land in the area had been sub-
divided and farmers given freehold titledeeds, which favoured the proposed
sugarcane project.
ter oo er experts comp ete t e r
stu es, t ey a one ver ct: e propose
project could take off.
According to them, it was possible to set
up a viable sugar scheme. The factory would
be supplied with cane from its nucleus estate
and the outgrower farmers from nearby
areas.
The Government accepted these ndings
an on u y , , t e um as ugarompany was ncorporate . e overnment
was to hold majority shares (71 per cent)
while the Commonwealth Development
Corporation had 17 per cent. The Kenya
Commercial Finance Company had a ve per
cent stake while Booker McConnell had four
per cent and the East African Development
an t ree per cent.
ome o t e ey o ect ves o sett ng up
the company were to provide income for
farmers and create job opportunities since
there was no major industrial undertaking
in the area at the time. This was expectedto prevent rural-urban migration, reduce
overdependence on importation and aim
or se -su c ency n sugar pro uct on. e
company was a so expecte to operate on a
commercial basis and make prots.
The rst bag
The original factory had a milling capacity
of 80 tons of cane per hour (tch), which
translated to 45,000 tons of sugar per year.
e rst ag o sugar ro e rom t e
conveyor ne on u y , , ust a year
after the factory was built.
The factory had a provision for expandingits crushing capacity to 75,000 tons of sugar
per year.
It was originally intended to implement
this expansion during the 1978/79 nancial
year ut ow ng to ts goo per ormance, t e
Government brought forward the programme
to 1975/76. Milling at 125 tch rate began in
July, 1976.
Improved performance encouraged the
Mumias stirs sugarmarketLeading miller has come a long way. Besides trying
its hand in energy production, it is also seeking to
become king of the sweetening industry. But how
did it all start? Njonjo Kihuriatraces the roots of the
rms success
Government to consider further expansio
to etween tc an tc . o ow na ec s on to expan to tc , t ere wa
need to build a new factory to meet the new
demand.
In August, 1976 contracts for the suppl
of equipment and construction of the factor
were signed and government approv
obtained during the 1979/80 nancial year.
or on t e new actory was comp ete
n ear y g v ng um as a potent
capacity of 210,000 tons of sugar per year.
The construction was nanced mainly b
loans from the Commonwealth Developmen
Corporation amounting to 3.25 milliosterling pounds and a further 19,720,00
million sterling pounds from the Nation
estm nster an .
The new factory design capacity wa
reached and surpassed for the rst time i
1986/87. From then on, production stabilise
at between 210,000 and 220,000 tons of can
per year.
roduction increased every year save fo
a r e nterrupt on n w en ow can
The relative remoteness
of the area and poor
communication network
prevented the growth of avibrant market economy.
However, land in the area
had been sub-divided and
farmers given freehold title
deeds, which favoured the
proposed sugarcane project
Agriculture
Mumias Sugar MD, Evans Kidero
East Africa Business Focus April - June, 2007
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ields affected supply until 1986/87 when
he situation improved. During the rst
ear of sugar production in 1973, Mumias
produced 20,891 tons from 194,217 tons of
ill cane.
In 1993, the Government signed the
COMESA Treaty, which allowed free trade
mong mem er countr es, an t s opene a
oodgate for imported sugar affecting local
sales, which then were being carried out by
he Kenya National Trading Corporation.
The move immediately sent the
government to the drawing board and it came
up with a privatisation programme that saw
um as ugar so to t e pu c n .
urrent y, t e company s ste on
he Nairobi Stock Exchange (NSE). In
ecember 2006, it stirred up the stock
arket when it sold more shares to the public
hrough a second share offering. The sharesere gobbled up but the prices have been
declining from about Sh50 at the time to
n e ruary an arc , .
ur ng t e nanc a year,
umias Sugar posted an after-tax prot of
Sh1.52 billion compared to the previous year
hen it posted Sh1.28 billion. This reected
n increase of 18.3 per cent over the previous
ear.
Closer to customers
e company s supp e w t cane rom
ts nucleus estate and local farmers whoave contracts with the company under the
umias Outgrowers Company (MOCO).
The company provides contracted farmers
ith inputs on loan, supervision and
extension services.
um as ugar a so accepts raw cane rom
armers. o ensure t at t e cane s o t e
ighest quality, the company recruits farmers,
supplies inputs and services on loan, for
nstance ploughing, harrowing, furrowing,
provision of seed cane and fertiliser.
It also provides supervision and extension
services, besides harvesting and transporting
e cane once t matures. o e ucate cane
farmers, the company organises educational
programmes, public meetings, seminars,
eld days, farmers education days and
eld demonstrations in collaboration with
elevant government ministries and other
elevant service providers such as the
enya Sugar Research Foundation, the
n stry o gr cu ture an t e rov nc a
dministration.
Brown sugar
um as ugar prov es per cent o
enyas sugar through appointed distributors
countrywide. The company also exports
some of its sugar to international markets
ainly in the European Union. Last year, it
exported 20,000 metric tons of brown sugar.
Mumias aims to live on as the market
ea er. s s a r ve t at can on y e
chieved by giving its customers what they
want the way they want it. The rm has
lso introduced brown and white sugar tocarter for emerging preferences among tea
consumers in the region.
The sugar is sold in varying quantities
o t the pockets of both the rich and the
poor. es es sugar pro uct on, um as
has ventured into other avenues including
generation of energy. It is investing 35
illion in the project.
Once completed, Mumias will have
he capacity to produce 35 megawatts of
electricity, of which 20 megawatts will
be sold to the Kenya Power and Lighting
ompany.
Other areas under consideration include
power alcohol through production of ethanol
from sugarcane for the motor industry.
Besides, it has a bursary scheme through
which the 20 top KCPE candidates 10
of whom must be children of company
emp oyees an ten o armers contracte
to t e company are awar e our-year
bursaries to study in secondary schools.Mumias is also involved in environmental
conservation. Last year, it distributed six
million seedlings to cane farmers, women
nd youth groups, schools and other public
nstitutions.
e company s p ot ng t e zo a ver
as n anagement n t at ve a me at
conserving Nzoia River, which is the lifeline
of the area residents - from Cherengani Hills
to Budalangi in Busia District.n
Agriculture
pril - June, 2007 East Africa Business Focus
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East Africa Business Focus April - June, 2007
By Florence Mukiebe
The World Banks revelation that it is
easier and faster to start a business
n wan a t an n ne g our ng
countr es m g t ave attracte t e
attention of hawk-eyed Kenyan
nvestors. Many of them travelled to Kigali
to witness the grand launch of the Rwanda
chapter of the Kenya-Rwanda Business
Association (KRBA) last October.
But why did Rwanda receive this verdict
rom t e or an
nce t e en genoc e, t e an -
ocked nation has been attracting goodwill
from the international community and has
much going for it. According to World
Bank ratings, the country tops the region on
good governance and has the lowest level
of corruption. It has a strong leadership
committed to encouraging the businesses to
thrive. It also gives various incentives to lure
investors. These include free residence and
work permits and duty free importation of
raw materials and machinery among others.
ere are ot er econom c m estones suc
as g econom c growt - w t an average
rate of six per cent; single digit ination
and a stable currency operating in a free
exchange rate regime. All these are bound to
attract investors.
Investment opportunities are to be found
in exports, large-scale farming, industrial
process ng, u ng o green ouses an co
storage ac t es, pro uct on o pac ag ng
materials and farm inputs such as fertilisers
and pesticides.
According to Clare Akamanzi, the
deputy director of Investment at the Rwand
Investment Promotion Authority (RIEPA
almost all sectors of the economy hav
been growing steadily over the last v
years. Fruit and vegetable production ha
increased tremendously, creating potenti
or export. s s a goo s gn cons er n
t at agr cu ture comman s per cent o t
countrys GDP, with the main exports bein
tea and coffee.
Addressing KRBA members at th
Rwanda Chapter launch, Ms Akamanzi als
stressed her governments commitment t
develop its information communicatio
tec no ogy . owever, access to t
nternet an ot er e s o commun cat o
is still low. But for investors, this is
ripe opportunity as they are encourage
to tap into this fairly underdeveloped bu
Investors bet on RwandaThe land-locked nation is a virgin territory with high potential for growth,
says investment chief
Investment
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April - June, 2007 East Africa Business Focus
Hass
ext to aya entre renc c oo rgwngs o e oaP.O. Box 8342-00100Nairobi, Kenya TEL: +254 20 3864364 / 3877144 / 3878173
: +
: + - , + -ma : [email protected], [email protected]
Rwanda Ofce
KBC - (KACYIRU)
BP 7159 KIGALI, RWANDA: +: +
Email:[email protected]
Uganda Ofce
FOUNTAIN HOUSEo , u ruma oa oxe : + 31
Tel/Fax: +256 41 250655Email: [email protected]
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the 1994 genocide. Because this perceptionof the civil war is still strong, the goodn the Rwandese people and the suitable
environment for investment offered by thecountry can easily go unnoticed. However,the country has made signicant progress
n re u ng ts economy an soc a
n rastructure.Organisations like RIEPA were set up to
speed up Rwandas economic growth. Thegency is the agship of Rwandas investment
nd export promotion programmes and a keycog in the economic development wheel.
Apart from facilitating the approval and
icensing of new investment projects andanag ng t e ncent ves g ven to nvestors,
a so n t ates nvestment promot on
ctivities and seminars to sensitise thenternational business community on the
opportunities available in Rwanda.
According to RIEPAs Director General,illiam Nkurunziza, Rwandas uniqueness
nd attractiveness lies in the fact that it
s a v rg n economy, untappe an u o
potent a .For the discerning investor, Rwanda
epresents the virgin territoryeverysector from agriculture to Information
Communication Technology, from tourismto manufacturing, from mining to nancialservices abounds with opportunity because
little has happened in all of them, saysurunz za.n ee , n areas e t e nanc a sector,
only seven per cent of the eight millionRwandese have opened bank accounts.Firms in the insurance industry also lack
the capacity to cover large projects. Thisleaves a large segment of the populationand businesses unattended and the market
unexp o te . ut w t t e attract ve
nvestment ncent ves an t e grow ngspirit of the regional cooperation, perhapsinvestors should consider casting their netswider as Rwanda beckons. n
Rwandas untapped resourses
Investment
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East Africa Business Focus April - June, 2007
y ewton utuma
enya is on its way to becoming a
concrete jungle, thanks to the boom
n t e construct on n ustry.
ne ar y passes t roug any
own or shopping centre without
noticing commercial and residential
buildings going up as though reaching for
the sun.
Economic experts had predicted a growth
rate of 5.2 per cent in this nancial year but
his can even be higher considering the high
ate of the upcoming constructions in the
ousing sector and the huge allocations in
he roads sector, says Victor Musumba, an
economist in Nairobi.
However, a surprise increase in the cost of
construct on mater a s towar s t e en o ast
ear caused jitters within the industry.
Kenyas construction industry offers great
prospect particularly for manufacturers of
building material and low-cost building
ethods.
It is also good news for cemen
manufacturers and suppliers since th
demand for the primary product i
construction has gone up.
eal estate agents in Nairobi say that mo
entrepreneurs are cashing in on the boom
more t an ever e ore.
Ready marketWe have been doing well especially from
2004 and getting better. I believe there
more to come our way since there is a read
Growing economy sparks construction boom across the country
Kenyas changingskyline
Construction
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April - June, 2007 East Africa Business Focus
arket either for purchase of houses or
entals, says Barnabas Njaga, a real
estate developer in Nairobi.
And Erastus Mbakigane adds: This
growt s an n cat on o t e econom c
oom e ng exper ence n t e reg on.
bakigane is a Ugandan civil engineer
orking for a major construction
company in Upper Hill, Nairobi.
Records from the Central Bureau
of Statistics (CBS) indicate that the
ndustry experienced tremendous
growt n , w t cement
consumpt on r s ng rom . m ononnes in the previous year to 1.6
illion tonnes, representing an increase
of 10.9 per cent.
Consumption in June 2006 rose by a
further 8.1 per cent to 654,565 metric
onnes from 605,571 metric tones over
e same per o n .
ere as a so een an ncrease
budgetary allocation to the road sub-
sector and tax incentives contained in
he 2006/2007 Budget. The incentives
nclude making cost of constructing selected
buildings income tax deductable andndustrial building allowance of 10 per cent
or e ucat ona u ngs.
remar a e econom c upsurge as een
ecorded on the continent and particularly in
astern Africa.
In Rwanda, building and construction
pundits say growth has been spurred by an
urge to rebuild the country that is recovering
from a genocide that claimed almost a million
peop e rom ts popu at on an roug t t e
economy to a complete standstill.
Rwandas real estate sub-sector is
skyrocketing with many investors ockingnto the country especially from the East
frican region, says an ofcial at the
enyan Embassy in Kigali, Rwanda.
Another market opened up is the Southern
u an a ter t e s gn ng o t e peace accor
between the South and the Khartoum
government. The Comprehensive Peace
greement restored peace in the oil rich
egion, paving the way for construction
ctivities that are now in full gear. A
spot check at the major towns of Juba
n um e areas revea s a g rate oconstruct on espec a y n t e ous ng an
roads sub-sectors.
Most of the roads, which were either non-
existent or dilapidated are being nanced by
donors such as the European Union and their
completion is underway. Companies working
on these projects are mainly from Kenya and
gan a.
However, the cost of housing is still high
since most rental establishments are privately
owned. Currently, accommodation in
Southern Sudan is a nightmare. Visitors in the
now relatively calm region are either forced
to pay dearly for the few existing lodgings or
have to hire tents, which cost up to 150 per
n g t, exc u ng mea s.
Renewed growthThe renewed growth of Kenyan cement
factories attest to growing regional
construction industry. One such beneciary
s East Africa Portland Cement which has
exper ence a turn-aroun rom a oss-
making state corporation to a prot-making
enterpr se.ter arc too over government, ts
leaders vowed to revamp moribund state
corporations or to close them down altogether
if they failed to perform efciently. One
beneciary of revival was East Africa
Portland Cement.
The rm attest to how State corporations
can e va ua e c anne s o spurr ng
growth as it managed to trade in the gown
of mismanagement for one of efciency,
excellence and achievement.
Portlands growth has been spurred by the
opening up of new markets in the region. It
was among the rst cement manufacturer to
p tc camp n out ern u an, compet ng or
t e mar et s are w t ot ers rom gypt an
Uganda.
The company has established a warehouse
in Juba and Rumbek, which has contributed to
a fast and effective supply of the commodity.
It is now seeking to venture into new markets
in the region such as Yei, another upcoming
ma or town.n
Construction boom
Construction
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6 East Africa Business Focus April - June, 2007
Management
For tailor-made insurance products please contact us either at the Head Ofce,Madison Insurance House, Upper Hill Road P.O.Box 47382 - 00100 Nairobi
Telephone: 2721970/1, 2864000 Fax: 2723344Email: [email protected]
Website: www.madison.co.ke
or any of our fourteen branches countrywide.Nairobi: Moi Avenue, Industrial Area, City Square, Westlands
Mombasa, Kisumu, Nyeri, Nakuru, Eldoret, Kisii, Kakamega, Meru, Thika, Machakos
Tips on building a successful team
Many peop e won er ow us ness
powerhouses like that of Donald
Trump or Warren Buffet havemade it. The fact is they just do
what you dont. One of the important skills
for leaders to master is the ability to recruit
high-potential talent into the organization.
ecru t ng s ou n t e react ve
per orme on y w en you ave an open ng
on your team. t s ou e an ongo ng
ctivity so that your pipeline of candidates
s full and you can start interviewing shortlyfter a need has been established. Follow
these tips to make the most of your efforts:
l Look to your existing employees for a
promotional opportunity, rst. You should
ways oo w t n t e organ zat on e ore
you cons er externa can ates. ewar
emp oyees w o are act ve y eve op n
their skills and are loyal to the company.
there someone who is ready to take on neresponsibilities?
l If you are an active member of you
professional community, start buildin
a rapport with prospective candidate
ecru t ng s a ot e mar et ng t e mor
pos t ve contact you ave w t prospects, t
more receptive they will be to talking to yo
about making a move to your organizatio
Keep in contact with those you would like t
have on your team one day.
l Build a reputation as a strong leade
This is one of those times when you wan
your reputat on to prece e you. you a
nown or e ng a great ea er, can ate
will want to work for you. Year after yea
lack of opportunity is cited as one o
the main reasons for employee turnove
Judicious candidates know that their manage
can make or break that opportunity and the
make their decisions accordingly.
l on t e nt m ate y ynam c, g
potential candidates. Instead of worryin
about someone taking over your job, thin
about who could potentially replace yo
when you move on to a bigger role.
l Avoid the temptation of hiring someon
just like you. It is great when you hava connect on w t a can ate, ut try t
remem er t at you aren t r ng someon
to be your friend. Instead, look for someon
who will complement your teams strength
and weaknesses.
l Select candidates who are passiona
about their work. Passion is difcult t
ascertain during an interview. Howeve
t ere are s gns you can oo or an quest on
you can as to etter eterm ne t s
someone who is passionate about their wor
Stop settling for mediocrity. Dont b
afraid to hold off on making a selectiodecision until you have the right candidat
Get creative in the way you manage you
employee shortage. Consider redistributin
t e ut es on your team an r ng
temporary a m n strat ve emp oyee to ta
up the slack. This is a great time for you
employees to gain additional experience. n
Adapted from Jill Franks book, To
7 Skills of Building a Successful Busines
Team
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April - June, 2007 East Africa Business Focus
enya s essent a y an agr cu tura
economy mainly driven by horticulture
and cash crops such as coffee and tea.
However, tourism also plays a key role
n the economy and is increasingly becomingkey income earner.
Since Narc took over power in 2002, it has
em ar e on po c es t at ocus on econom c
eve opment, u ng an re a tat ng
nfrastructure and creating employment.
But even before this, the ongoing
iberalisation of the economy that was
nitiated over 10 years ago by Kanu has laid
the groundwork for an investment-friendly
environment in Kenya.
e government as a so ta en var ous
steps to create ena ng env ronment to
encourage both foreign and domesticnvestment in line with the economic
recovery s ra egy programme.
The economic recovery strategy hopes
to achieve an eight per cent growth rate
nnually and help Kenya become a newly
n ustr a se country y . s s a
ong-term vision for the economy and the
success will depend on how the current
dministration of the day handles the process.
enya is an important player in East Africa.
Council forms crucial link between
exporters in Kenya and the available
business opportunities
Exporting
ideas
The country is strategically placed with
major port, Mombasa, where goods for
the region land en route to their respective
countries, including landlocked Rwanda,
Uganda and Burundi. Kenya also has well
eve ope nanc a mar ets, ma ng t a
hub for various services including transport
banking and health.
Export promotionOne of the agencies helping the government
to speed up economic growth is the Export
romot on ounc , a prem er
nst tut on n t e eve opment an promot on
of export trade.
Established in 1992, EPCs primary
objective was to address bottlenecks that
were facing exporters and producers of
export goods and services with a view to
increasing the performance of the export
sector. The council was set up to give an
outward orientation to an economy that was
hitherto inward looking. Over time, the EPC
as em race t e man ate o co-or nat ng
and harmonising export development
and promotion activities in the countryand providing leadership to all national
export programmes. Today, the council
is the focal point for export development
and promotion activities in the country.
o ensure max mum mpact, t as structure
ts operat ons to ocus on var ous sectors o
the economy. Six priority sectors, out of the
14 prioritised in the National Export Strategy
(NES), have been identied for focus under
this approach. They include horticulture
Trade
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East Africa Business Focus April - June, 2007
nd other agricultural products, textiles and
clothing, commercial crafts and SMEs, sh
nd livestock products, and services other
t an tour sm.
ac sector as a c amp on es gnateto drive agendas affecting the sectors in
terms of product and market development,
trade information needs; capacity
enhancement and policy environment.
The councils objective is to identify export
market opportunities for Kenyan products
n to ormu ate appropr ate mar et entry
n penetrat on strateg es.
The strategies used include contact
promotion programmes, market research and
nvestigations, trade fairs and exhibitions,
buyer-seller meetings, trade missions among
others.
The main objective of producteve opment s to ac tate t e expans on
n vers cat on o enya s export
product range. This is achieved by assisting
producers/exporters develop and adapt their
products to suit specic market requirements
through quality improvement, value added
processing, improved packaging and
presentation, new product design and styling,
ent cat on o new exporta e pro ucts an
dherence to industry codes of practice.
The Council recognises that relevant,
timely and current trade and market
n ormat on s cr t ca to t e compet t veness
o export ng rms. o a ress t s ent eneed, Centre for Business Information in
Kenya (CBIK) was established with support
from the government and the European
Union.
This centre contains current and relevant
nformation from credible sources, some
o w c nc u e t e , or ra e
rgan sat on , tra e promot on
organisations such as the Japan External
Trade Organisation (JETRO), Centre for
he Promotion of Imports from Developin
Countries (CBI), among others.
Information is accessible through prin
n e ectron c mo es. n a t on,
as a rary re erence centre ,w c freely accessible to all. The Council look
t trade policy facilitation in relation to th
growth and development of the export secto
This includes facilitation of the review o
domestic and external trade policies in orde
o enhance the competitiveness of Kenya
export pro ucts.
e ounc eve ops s s an mpar
nowledge on relevant topics to the exportin
fraternity through seminars and workshop
n collaboration with development partner
such as JETRO, JICA, ITC, CBI and EU
Under this pillar frequent promotion o
public awareness of the need for an expocu ture s ssem nate t roug pr nt an
e ectron c me a, export news an re ate
fora.
The EPC provides the right connectio
between exporters, importers and th
vailable opportunities in the expandin
economy.n
Additional materials from EPC websit
ttp: www.epc enya.org
Trade
The strategies usedinclude contact
promotion programmes,
market research and
investigations, trade fairs
and exhibitions, buyer-
seller meetings, trade
missions among others
Horticultural products are a major export commodity in Kenya
Exporting
ideas
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April - June, 2007 East Africa Business Focus
Advertorial
Advertise
in the NextIssue of
and get ahuge
discount
u s er
enya-Rwanda Business Association
vert s ng a es
n or omm e a erv cesContact person: Clifford Nturibi G.O. Box 16352-00100
Nairobi, Kenyae : +mail: [email protected]
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East Africa Business Focus April - June, 2007
y orence u e e
Arica has been experiencing
a tourism boom in recent
years despite travel warnings
issued by the US. With 842
million arrivals, 2006 exceeded
expectations as the tourism sector
continued to enjoy above average
results, making it a new record
year for the industry.
he latest Wor Tourism
Barometer gures show that
2007 will consolidate the positive
performance and turn into the
fourth year of sustained growth.Despite risks facing global tourism 12
months ago in particular terrorism, health
scares due to avian u and rising oil prices
2006 was another year of good growth
a ove t e ong-term orecast rate o .
per cent, ac e up y one o t e ongest
periods of sustained economic expansion,
says UNWTO Secretary General Francesco
Frangialli.
ne o t e eatures o was t e
cont nue pos t ve resu ts o emerg ng
destinations, underscoring the links to
economic progress. As one of the most
dynamic sectors, Tourism plays a key role
in the ght against poverty and promoting
sustainable development.
By integrating sustainable tourism in
t e nternat ona eve opment agen a, our
sector can ma e a s gn cant contr ut on
o a vance t e enn um eve opmen
oa s t roug a more mo erate, so an
responsible type of growth, says Frangiall
Three years ago, world tourism bega
historically new phase of growth, as
broke the barrier of 800 million internation
rrivals, growing more than 20 per cent sinc
hen. We are now responsible for making thi
new p ase o growt more econom ca n t
use o energy an natura resources.
Tourists ock in despite travel
advisories from the US
Tourism
Going Wild
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April - June, 2007 East Africa Business Focus
Major destinationsAfrica has outpaced all other regions with
lmost twice the rate of global growth
reaching 8.1 per cent in 2006, following an
lready strong 2005. This star performance
was led by Sub-Saharan Africa +9.4 per
cent , w e ort r ca + . p er cent a so
en e t e year a ove average.
Major destinations such as South Africa,
Kenya and Morocco all continued to post
excellent results.
gures re ease n anuary y t e enya
our sm oar n cate t at tour sm
was the countrys leading foreign exchange
earner with gures running to Sh56.2 billion,
after 1.8 million tourists visited Kenya last
year alone. This reected a growth of 15
per cent from the Sh48.9 billion the sector
earned in 2005.
we manage , tour sm cou e p to
reduce poverty because the high numbers
o arr va w create more o s an more
ac t es to cater or t e tour sts. s a so
calls for improvement of the infrastructure
and additional bed capacity as these are some
of the challenges that hinder faster growth
of this sector. Currently, the number of
classied tourist beds stand at 39,321. With
the demand rising steadily, an additional
, e s are nee e .
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East Africa Business Focus April - June, 2007
TsunamiAsia and the Pacic (+7.6 per cent) region
maintained its extraordinary growth due to
the recovery of Thailand and the Maldives
from the impact of the December 2004
tsunam , as we as remar a e per ormances
rom emerg ng est nat ons n t e reg on.
International tourist arrivals in South Asiagrew by 10 per cent, boosted by India, the
destination responsible for half the arrivals to
the sub-region.
Europeperformed on target last year (+4
per cent). Germany took advantage of the
oot a or up , w e ta y a
strong come ac . pa n s so resu ts
lso contributed to the generally positive
ou come.
In the Middle East, international tourist
rrivals are estimated to have risen by four
per cent in 2006, after the bumper years of
2004 and 2005, and in spite of armed conict,part cu ar y t e srae - e anon an srae -
a est ne cr ses.
Although the two per cent growth in the
mer cas ooks disappointing, regional
results vary considerably. The rise in the
USA was not sufcient to compensate for the
weak development in Canada and Mexico.
On the other hand, the results from Central
+ . per cent an out mer ca + . per
some uncertainties remain on
the global economic front and
they could impact the tourism
forecasts. Rising interest rates
in some countries and regions
could diminish available
income. A weaker US dollarmight affect foreign travel
demand by Americans. On the
other hand, a stronger euro
could stimulate European
international travel
cent) show how Latin America is on track
to conso at ng t e pos t ve outcome o
recent years: Chile, Colombia, Guatemala,
Paraguay and Peru all grew at double-digit
ra es.
Anticipate shocksThe increase in international tourist arrivalss pro ecte to e aroun per cent, muc
n ne w t t e orecast ong-term annu
growt rate o . percent t roug
Growth is expected to be more solid a
businesses, consumers, governments an
international institutions such as the UNWT
are now better able to anticipate shocks an
to respond more effectively to crises.
Travellers are better informed and havecome more a ept at we g ng t e r opt on
an now nc u e secur ty actors as u
another consideration among others whe
choosing their destinations.
s a whole, the global economy
expected to maintain last years growth leve
Oil prices have been less volatile and do no
pose a major risk to economic stability a
t ey a year ago.
Nevertheless, some uncertainties rema
on the global economic front and they coul
impact the tourism forecasts. Rising intere
rates in some countries and regions coul
diminish available income. A weaker U
dollar might affect foreign travel deman
y mer cans. n t e ot er an , a strong
euro cou st mu ate uropean nternat on
travel.
gainst the good tourism results of th
past three years and given the still favourab
economic outlook, this positive trend look
likely to grow in 2007.n
Tourism
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April - June, 2007 East Africa Business Focus
Trade
y orence u e e
In todays corporate world, no business
can stand on its own. Each must lean
on others to succeed. And that is where
networking comes in handy because in
the global village, no business can operate
e an s an . nee to networ to ac eve
aster an g er growt .
This was one of the reasons why the Kenya
wanda Business Association (KRBA) was
formed by a group of business people drawn
from Kenya and Rwanda but with business
nterests in the East African region.
A not-for-prot association, KRBA was
orme to e p promote nvestments n ast
nd Central Africa. The associations members
re experienced business people and high
prole corporations whose combined wealth
of experience will help boost the growth of
ndividual businesses.
According to KRBA chairman Philippe
Nsanzimana, the organization aims to promote
exce ence n us ness among pro ess ona s
n Kenya and Rwanda. It also takes a keen
nterest in law-making, policy formulation
nd economic and social matters to promotebasic commercial freedom and good corporate
governance. We came together as a group
o help each other excel in our respective
us nesses. any o our mem ers ave ga ne
ot rom our re at ons p e t er at persona
evel or at group level, says Nsanzimana. Our
ssociation operates like a club of businessmen
nd members are more than willing to help one
nother.
The launch of the KRBA-Kenya Chapter
follows the successful launch of a similar
ranc n wan a ast cto er. em ers
rom enya trave e to wan a to meet t e rcounterparts not only for the launch but also to
exchange ideas and contacts.
During the launch, the chairman said: I
ave no doubt and it is my wish that each
participant will go back home with one or
ore contacts that may lead to greater business
opportun t es.
e a m o s to g g t a ava a e
opportunities and package them in a way that
ttracts capital in form of joint ventures and/or
Businessmen from Rwanda and Kenya form a unique team to boost investment
opportunities across the borders
The launch of the KRBA-
Kenya Chapter followed
the successful launch of a
similar branch in Rwanda
last October. Members
from Kenya travelled to
Rwanda to meet theircounterparts not only
for the launch but also
to exchange ideas and
contacts
Trade ties that bind
same vision, we will be able to draw attention
of our own investors and those from outside to
our untapped resources, adds Nsanzimana.
ugene utagarama, a mem er o
says o t e assoc at on: o ne w en
members were preparing for the launch of
KRBA-Rwanda Chapter. At the time, I was
planning to set up a high end restaurant in
Kigali and was interested in networking.
The trip to Kigali opened an opportunityfor my business because I made good links
w t us nessmen n wan a an
mem ers ase n ga . ow t e mem ers
meet weekly in my restaurant, boosting my
business.
Eugenes story is no different from Joy
Muchinas, an events organiser based in
Nairobi. Joy joined the organisation late last
year but her business contacts have grown
s nce. oy s t e propr etor o ver n ng .
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East Africa Business Focus April - June, 2007
I have a lot of clients who are referred to me by
members who in turn introduce other clients, she
says. I strongly believe that KRBA will go a long
way in fostering lasting and mutually benecial
us ness re at ons ps etween us nesses ot n
enya an wan a. ur mem ers are so w ng
to help and thats how we are able to grow both
ndividually and as a team.
The opportunities that await those daring to venture
re many and varied. The economys uniqueness and
ttractiveness lies in the fact that Rwanda is a virgineconomy, untapped but full of potential.
ome o our mem ers ave nterests o expan ng
to wan a. e eauty s, our counterparts rom
Rwanda can also expand to Kenya and since Rwandese
get a lot of products from Kenya, it is now easier to
get trade contacts through our association, explains
Nsanzimana. He says some of the activities that the
ssociation hopes to engage in are hosting other
business associations for business talks, organising
wor s ops or us ness peop e an sen ng e egates
to international business fora.
We can only grow as a group if we are able t
nteract with other business people both locall
nd internationally the reason why we have line
up act v t es or t s purpose a t roug t e year.
wor as rea y ecome a g o a v age an we on
want to be left behind, he says.
And for Patrick Ndisanze things can only get bett
for his business. He was one of the rst people to jo
the association.
KRBA has given me the opportunity to knopeople from diverse industries and that has give
my us ness, ena.net erv ces, a prev ew o ot
e s, e says. t t e aunc o t e wan
Chapter, KRBA has opened a window of opportunit
n attracting business from across borders.
With the ofcial launch of the two chapter
members now hope to work closely with th
governments of both countries, national institution
nd individuals to further promote business growth i
enya an wan a.n
Trade ties that bind
With the launch
of the Rwanda
Chapter, KRBA has
opened a window
of opportunity in
attracting business
from across borders
Trade
KRBA chairman Philippe Nsanzimana (left), Paul Ouma and Clare Akamanzi deputy director RIEPA
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April - June, 2007 East Africa Business Focus
y Ken Oduor
The venue was Kigali. And the event
o t e moment ast cto er was t e
aunch of the Kenya Rwanda Business
Association, Rwanda Chapter.
enyas Minister for Trade and Industry, Dr
ukhisa Kituyi, his Rwanda counterpart,
incent Karega and Kenyas Cooperative
evelopment Minister, Njeru Ndwiga,
ere among t e gn tar es present. ver
enyan nvestors w t us ness nterest n
he region also attended the launch.
We love our Rwandan brothers... Ourgovernment has given 150 Freshian dairy
cows to our friends here, Mr Ndwiga said
ith a light touch.
According to Paul Ouma, the chairman
o t e wan a c apter, t e aunc
o t e assoc at on was ta ng p ace at a t me
hen the global economic order is driven
by economic blocs such as the European
nion, the Southern Africa Development
Cooperation and the East African
Community.
Access to large and new market
opportun t es s ust one o t e ene ts were po se to ave, e to t e e egates.
Rwanda is a virgin land beckoning for
andsome investors. It offers opportunities
cross the board. For instance, the country
runs a substancial trade decit because she
imports almost everything. This means that
there is lack of import substitution, which is
where the investors can come in, especially
n t e pro uct on o consumer goo s .
Other dignitaries who attended the launch
were Rwandan Minister for Public Services,
Skills, Development and Vocational Training,Prof. Manasseh Nshuti, Kenyas ambassador
to Rwanda, Amb. Alex Keter, Rwandas
ambassador to Kenya, George W. Kayonga,
a rman o enya apter
Philippe Nsanzimana, RIEPA DirectorGeneral, William Nkurunziza, Chairman of
the Rwanda Private Sector, Robert Baigamba
an ecretary enera o , mmanue
atege a.n
KRBA chairman Philippe Nsanzimana (second left) and other
articipants uring t e associations aunc in wan a
Rwandan Trade Minister Hon. Vincent Karega receiving a gift from
c airman, apter an is wan an apter counterpart
rade Minister Hon. Mukhisa Kituyi (in
at), Hon. Njeru Ndwiga (second right)
nd KRBA members at the launch of the
ssociations Rwanda Chapter
Kenya Rwanda Business Associationopens new chapter
Trade
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6 East Africa Business Focus April - June, 2007
F
our-year-old Martin never knew
his parents. His earliest memories
are of his grandmother, who looked
after him. He also remembers thesisters from the convent who used
to give them food. He was often hungry and
somet mes n pa n rom t e ggers nsects
t at ay eggs un er toe na s n s eet.
The nuns could not help being aware of his
condition, noting that Martins grandmother
was not capable of looking after him. Apart
from being in poor health, she was also
mentally challenged, and looking after
her grandson presented her with many
difculties.One day, when he was about
three, Martins grandmother took him to
the convent and left him there. Concerned,the sisters went to her house but found that
she had abandoned her home and could not
e trace . ventua y, t e nuns too art n
to a near y ren s age w ere
he was taken into a family house and given
a new mother, brothers and sisters. Today
Martin is a happy, condent boy who attends
the neighbouring SOS Hermann Gmeiner
School and has a bright future ahead of him.
Giving a homeand a futurartin is typical of many children wh
grow up in SOS Childrens Villages, havin
been orphaned or abandoned at a young ag
SOS Childrens Villages believe that ever
c s ou e ong to a am y an grow u
with love, respect and security. The missio
of the organisation is to build families fo
children in need, helping them shape the
own futures and sharing in the developmen
of their communities.
In many developing countrie
unemp oyment, eavy e ts an poo
arvests are every ay c a enges, w t
children often bearing the brunt of familienancial and social difculties. The effec
of the Aids pandemic and other diseases als
weigh heavily on children in less develope
countries, where the social support networ
is becoming even weaker. Violence, negle
an e ng orce to ve on t e streets are re
t reats or t ese c ren.
SOS Childrens Villages is an independen
non-governmental social developmen
organisation which has been working to me
the needs and protect the interests and righ
of children for nearly 60 years. They opera
over 450 villages in 132 countries anterr tor es, o er ng ove, protect on, respec
e ucat on an me ca care n a am y ase
environment. Around the world, over 55,00
children and adolescents enjoy the love an
support of an SOS family and over 650,00
people benet from SOS Childrens Village
educational, health and social centres.
There are currently four SOS Children
ages n enya, t ree n wan a, our
urun an two n t e emocrat c epu
of Congo. Each village cares for an averag
of 120 children (sometimes more) where the
are looked after by specially trained SO
mothers in family houses, together with the
SOS siblings. Many of them attend SO
kindergartens, schools, vocational trainin
centres, a open to commun ty mem e
as we w e ot ers are at un vers ty o
college. All are provided for until they ca
look after themselves.
Children are only admitted to an SO
Childrens Village if they cannot - or ar
unlikely to - return to their biologic
Charity
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April - June, 2007 East Africa Business Focus
families. When families have difculty in
providing for their children, SOS Childrens
illages has programmes which are designed
o strengthen families, either through
e ca , soc a an e ucat ona support,
or t roug ncome generat on sc emes.
Through these programmes, families learn to
cope with crises which might otherwise force
hem to split.
Apart from villages, SOS also operates
social and medical centres, kindergartens,schools, day care centres and even hospitals.
n n countr es w ere c ren may e
emporar y sp ace ue to con ct, am ne
or other crises, SOS also operates emergency
elief programmes, helping children to
survive until they can be reunited with their
families. The organisation was founded
n 1949 to improve the lives of deprived
children after the Second World War. The
challenges that these children faced then
are similar to those faced by many children
today hence the need for continuation.
Due poverty, disease, war and natural
sasters, over m on c ren
wor w e ve w t out t e support o one
or both parents. Without a family to support
them, these children are deprived of what
others may take for granted; access to
health, education, food, shelter and care; all
requisites for a good start in life.In the family set up, children can develop
an ent ty, se con ence an n v ua
ta ents. trong an car ng am es are
essential for ensuring a peaceful society for
the future.
As a non-prot making organisation,
SOS relies on the goodwill and generosity
of supporters to maintain its hundreds of
projects and to expand and develop the
assistance it provides to children and families
in need around the world.
Indeed, in many non-European regions
where SOS works, the available educational
an vocat ona tra n ng ac t es are
na equate an t e organ sat on o ten runs ts
own kindergartens, primary and secondary
schools, and vocational training centres for
the children and young people in their care
and also for children from the neighbouring
communities. Priority, however is given tothe poorest families.
ee ng t e goo wor t at s nvo ve
n, a t ose w o ave somet ng to spare are
asked to assist in making a difference in the
lives of these children.
If you would like to know more about SOS
Childrens Villages, Log onto: www.sos-
childrensvillages.org or www.sosea.org n
topoor children
Top: An SOS mother supervises children during a meal while and an older child enjoys a
r e w t a r en . ac ng page, c ren on t e r way to sc oo
Charity
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East Africa Business Focus April - June, 2007
y Kimani Chege
African science is coming out of the
woods at last, thanks to renewed
nterest y r can pres ents.
t t e ea ers awa en ng to t e
eed to increase research funding, scientists
re keenly watching and waiting for the shot
n the arm that could mark a turning point in
he continent.
African science has for a long time lagged
behind due to poor funding by governments,
eav ng sc ent sts w t tt e room or
nnovat on.While most countries, especially in Europe
nd Asia, have used science to develop
heir technologies and economies, Africa
as become a permanent importer of both
echnology and expertise.
However, scientists in Africa had reason
o ce e rate w en t e r ca n on summ t
n s a a recent y e cate t e w o e
eeting to talks on science and technology.
The recognition by heads of state of
he role science plays in the development
nd utilisation of the continents natural
esources came as a surprise to many.According to one scientist, the AU summit
as a ay o rec on ng or r can sc ence.
owever, t e e cat on o t e summ t
o science and technology was enough to
promote renewed interest.
While science attracted little attention
compared to the launch of the Africa Year of
ootball, scientists acknowledge that it has
aken a long time to bring the sector to the
eve o ea s o tate n r ca.
Though most African nations shy away
from funding research, Rwanda has moved
o lead them in providing adequate nancialsuppport for science and technology, thereby
encouraging innovative science.
President Paul Kagame, an enthusiast of
sc ence an t ec no ogy, to r can ea s
o tate n s a a t at s country
as not only providing enough funds for
esearch, but was willing to double budgetary
llocation to scientists.
According to him, Rwanda was pushing for
n African countries resolution to allocate at
Time for experimentsRwanda shows the way to boost funding for research in science and technology
Clearly, it is not just aboutinvestment in science and
technology, but also about
improving the efciency of
this investment for greater
impact in all aspects of
national life
President Kagame
least one percentage of their Gross domestic
Product (GDP) to their science sectors.
wan a as a ocate at east . per cento ts to sc ence n t s nanc a year
and the sum is set to double in the next ve
.
If Rwanda approves this funding to
three percent, it will be at par with most
developed nations whose allocation for
research has helped boost several sectors of
t e economy.
e un ng s now support ng wan a s
science and research institutions - including
the teaching of science in primary and
secon ary sc oo s, an secto
based centres of higher learnin
and research in agriculture, health
infrastructure, environment an
biodiversity.
2005 was a major milestone fo
us in that we begun to implemen
our nat ona po cy on sc enc
tec no ogy an nnovat on.
important goal of this policy is t
increase the number of scienc
students in tertiary institutions
the target being 70 per cent of th
student population, Kagame tolAfrican presidents.
e a ress ng t e
umm t, agame note t
most countries need to give mor
attention to scientists who hav
called for increase in funding t
promote research.
President Kagame noted: W
are spending one percent of Gros
omest c ro uct on sc enc
technology and research in our countries a
recommended by African science minister
is this not too little too late?The emphasis is the need to prioritise o
how the money is used to meet the mo
pressing needs of the continent.
ear y, t s not ust a out nvestmen
n sc ence an tec no ogy, ut a so a ou
improving the efciency of this investmen
for greater impact in all aspects of nationa
life, President Kagame added.
or him, it is about applying science an
technology holistically - in all levels o
education and training, commercialisin
eas, eve op ng us nesses an qu c en n
t e pace o wea t an o creat on.
The Rwandese President also praise
other regions in Africa for promotin
nnovation, calling them islands o
nnovation with the potential to prop
Africa into development.
With a political will and resource
t ese reg ona ynamos can prov e t
momentum nee e to spee up r ca
transformation through science an
technology.
Science & Technology
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April - June, 2007 East Africa Business Focus
These nascent centres must become the
basis of pooling African resources to build
iable networks for larger economies of scale
nd greater impact on the ground.
n a pract ca approac to encourag ng
oca stu ents to ta e up sc ences, e sa
plans are underway to initiate a regional
science tournament modeled on the East and
Central Africa football Challenge Cup.
Rwanda has been instrumental in funding
football competitions in the region and is
exploring ways to duplicate this success in
sc ence.
u ng on t e successes o t e gaInstitute of Science and Technology, we
ntend to create a scholarship fund for bright
nd capable youth from our region to study
science and technology at this institute,
resident Kagame announced.
His calls were supported by African
res ents an sc ent sts w o saw t s as an
examp e o ow r ca can tap ts resources
using science to develop.
We just need two or three more presidents
ike Kagame who can stand by us when we
sk for more fundsfor research on issues
hat will help the common man, said onescientist attending the AU event.
t a meet ng n a ro ear er ast year,
sc ence m n sters agree to o y or
llocation of at least one per cent of GDP
o science. They also proposed the setting
up of an innovation fund and an African
presidents science council.
However, during the AU summit whose
ain theme was science, technology and
c mate c ange, t e proposa to orm t e
presidents council was shot down. It had
been suggested that several presidents be
pooled into a club to share ideas on sciencend technology with advice from experts.
Professor Calestous Juma, a Kenyan
scientist who also heads the AU panel on
odern biotechnology, asked African heads
o tate to use t e r n uence to ncrease
funding for research.
He said the formation of the presidents
council could provide the required link
between science and executive decisions.
Bringing science and technology to the
centre of Africas economic renewal will
require more than just political commitment;
t will take executive leadership, he
dded. This challenge requires concept
champions, who in this case will be heads
o state spear ea ng t e tas o s ap ng
their economic policies around science,
technology and innovation.
Prof Nagia Essayed, the AU commissioner
for science and technology, said her
commission was increasingly talking to
governments to allocate more funds to their
m n str es o sc ence an tec no ogy. ost
of the recommendations her committee had
put forward, including the Cairo report,
have been adopted by the AU executive
committee.
She said the commission was also
encourag ng t e part c pat on o governments
in science. This includes the raising of the
required quorum to make an executive
decision in AU meetings
Through a decision reached by the AU
Executive Committee in Addis Ababa,
Ethiopia was asked to raise the quorum
requ re e ore pass ng a n ng reso ut on
o r can n sters o c ence an
Technology to 56 per cent.In the Cairo ministerial meeting which
passed several important resolutions on
science and technology, 27 of the 53 member
States failed to send their ministers.
We have realised that this is an imperative
ssue or . owever w en t ere s ow
quorum n a m n ster a meet ng, we on t
say we cannot discuss and agree on issues
until we have enough participants.
Bringing science and
technology to the centre
of Africas economic
renewal will require
more than just political
commitment; it will take
executive leadership
Kagame champions science drive
Science & Technology
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East Africa Business Focus April - June, 2007
China woos AfricaEconomic giant has been making inroads into the African market and its inuence has
been growing by the year, reports Marceline Nyambala
na s earn ngs rom ts tra e
w t r ca as grown y
per cent over the last seven years.
In 2000, the value of the China-
Africa import and export trade exceeded 10
on, accor ng to o c a gures.
The sum jumped to more than 32.17
billion in the rst ten months of 2006 with
exports and imports hitting 15.25 and 16.92
billion respectively. It is now estimated that
na s tra e w t t e cont nent stan s at
more than 40 billion and is still increasing.
eanwhile, Sub-Saharan Africas economic
growth rate has nearly doubled since 2000
nd analysts attribute this partly to increasing
tra e w t na.
China has in the past hosted African headsof state in many Sino-Africa trade fora. The
irst Ministerial Conference of China Africa
Cooperation Forum, 2000 (FOCAC I) set up
the African Human Resources Development
und.
ur ng t e secon m n ster a con erence
of 2003 (FOCAC II), China resolved to
exempt import tariffs for certain countries to
ease their entry into the Chinese market.
It later launched the 2004-2006 China
Trade
President Hu Jiantao
The inux (or dumping)
of such cheap imports
has been blamed for
the death of several
indigenous industries,
such as the textile sub-
sector in some of Chinas
African trade partners.
r ca ntergovernmenta uman esources
eve opment an, w c t e nese
Ministry of Commerce has used to trainprofessionals from 48 African countries
n trade, investment and economic
management.
In November 2006, China hosted more
than 40 African heads of state in the Beijing
umm t o t e orum on na- r ca o-
operation.
In terms of investment, 77 Chinesefunded
enterprises in Africa were started in 2004.
Other statistics put the number of Chinese-
funded enterprises at 715, with the
operations in Africa ranging from
trade, processing, manufactur
transportation and agriculture.
e ar ast country as spen
ons o o ars secur ng o - r n
rights in Nigeria, Sudan and Angol
and has exploration or extractio
rights deals with Chad, Gabo
Mauritania, Kenya, the Republ
of Congo, Equatorial Guinea an
Ethiopia. China has also invested
t e copper n ustry n am a an
ongo; t m er n a on, amerooMozambique, Equatorial Guinea an
Liberia.
In 2002, a Chinese company, Don
Song, opened East Africas r
concrete poles factory at a cost of
million in Kenya. China also built th
a ara - anzan a- am a a wa
ne.
China mainly exports low-co
nished products to Africa. Its main produc
are machinery and electronics, textile an
apparel, hi-tech goods, while her impor
from Africa concentrate on crude oil, iroore, cotton, diamond and other natur
resources. or t ose r can countr es t
o not ave muc o or raw mater a s t
export, trade with China is not as attractive
uring , 25 African countrie
received zero-tariff treatment or speci
preferential tariff rates on products bound fo
China, ranging from food, mineral and texti
products to machinery and electronics. Chin
a so encourages capa e nese enterpr s
to invest in Africa to create jobs and achiev
common development.
wanda has not been left behind as it one of the upcoming economies that Chin
has an interest in.
The governments of Rwanda and Chin
signed eight agreements between 197
an or econom c an tec no og c
co-operation. Some of the projec
supported by China in Rwanda include ric
transplantation and reclamation project
sugar-renery; a cement plant that is no
managed for the Rwandese governmen
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April - June, 2007 East Africa Business Focus
A Chinese worker in a silk factory
Trade
by a Chinese company; construction of
the Kigali highway, a sports stadium and
hospital expansion. Chinese companies
have also been involved in other road and
r ge construct on, y ropower an c v
eng neer ng pro ects.
The Chinese government also endorsed
wanda with the Approved Tourist
estination status as part of its effort to
facilitate bilateral trade. This raised to
nearly 10 the number of tourism destination
countries recommended for Chinese tourists.
enya, anzan a, m a we, un s an
t op a are among t e ot er ene c ar es.China-to-Rwanda trade has been
ncreasing steadily. In 2002, the value stood
t 9.05 million, with imports taking up
5.19 million and exports taking up 3.86
million. Chinese exports to Rwanda include
cheap textile goods, light industry articles,
gr cu tura too s an errous meta s. na
mports ma n y n o um an tanta um or, an
aulonia logs from Rwanda.
Chinas Presenceut not everyone is pleased with Chinas
presence in Africa. Unease appears to berising across the continent as the Chinese
ecome s gn cant p ayers an n some
p aces, t e om nant ones. uge quant t es o
cheap Chinese-made products are suddenly
vailable across the continent. The inux
or dumping) of such cheap imports has been
blamed for the death of several indigenous
ndustries, such as the textile sub-sector
n some of Chinas African trade partners.
r can an estern act v sts say na s
coziness with the troubled governments of
Angola, Nigeria, Sudan and Zimbabwe are
undermining efforts to nurture democracynd improve human rights there.
But when Chinese President Hu Jintao
toured Africa, he dispelled concerns about
s country s grow ng presence on t e
cont nent. e sa na s eve opment w
not be a threat to anyone but would create
opportunities and space for development
broad. He told reporters in Nairobi that
China followed a policy of non-interference
n the internal affairs of other countries.
Chinas trade with Africa grows
without donors or investors dictating the
agen a. en a s sa an one, t rema ns
to be seen how Chinese invasion of Africa
will inuence global politics and business
trends.n
t er cr t cs ave warne r cans t at
when the deal is too good, they should think
twice while others say it is about time Africa
dened its destiny, put in place governance
structures and anti-poverty programmes
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East Africa Business Focus April - June, 2007
Time has run out for traders who have
hitherto been enjoying an unofcial
tax holiday. It is time for them to meet
the taxman, but they do not look ready
for the formal introduction.
n y ast year, un re s o t em, e
by opposition mps, marched and chanted
outside Times Tower to protest over the
deadline imposed for traders to install
Electronic Tax Registers popularly known
s ETRs. This time round, in the words of
the KRA Commissioner General Michael
aweru, t ere s no escape or tax eva ers.
e cra ty operat ves - repute or tras ng
Safaricoms security code system that was to
render stolen mobile phones useless - have
found their superlative match in the name
of the Kenya Revenue Authority which
has been working round the clock to get all
taxable people pay taxes.
e omm ss oner or omest c ax to
me a wor s op at t e n sor o u
some time last year that time had come for
each one to give to Ceasar what belongedto Ceasar and to God what is His.
The arrival of the ETRs is set to
revolutionalise the way Kenyans do
business. Except maybe for your monthly
s opp ng at t e supermar ets, rare y oes
one rece ve rece pts or t e omest c
ccessories bought at the nearby kiosk or
from hawkers who ply their trade on the
highways during trafc jams. KRA is now
casting the net wider to ensure that even the
kiosk operators pay Value Added Tax (VAT).
You will concur with me that this is no mean
tas , ut t e toug ta ng omm ss oner oax s e n te t at t w appen, come ra n
or sunshine.
The government having trimmed down
to domestic borrowing at a time when
donor funding is erratic, has probably no
choice but to use the authority to raise as
much revenue as possible. Indeed, KRA is
target ng over s s on per year,
money t at w e rawn rom tax payers
pockets.
KRA tightens noose on tax cheatsAs Government seeks to raise more revenue, the taxman is reaching out to more traders to give
to Caesar what is his, writes Newton Mutuma
ypot et ca y, every o y pays
per