Family businesses are significant drivers of GDP growth and employment in the East Africa region. In Rwanda, we can leverage many of our local attributes to attract, build and grow the contribution of family businesses to the economy.

Rwanda’s operating environment is conducive to starting and growing a business, including private companies and family businesses, and the country has a strong track record of economic growth over the last decade or more.

PwC’s recent East Africa Family Business Survey shows that although the Covid-19 pandemic has impacted growth prospects for family-owned businesses, these businesses are optimistic about growth going forward – and 69% of them are prioritising expansion into new markets or customer segments in the next two years.

Rwanda is fast becoming a hub for regional expansion, particularly in technology-related services. Specifically, we are seeing the incubation of new solutions and innovations in transport, drones, apps and other areas, which are broadly relevant to neighbouring countries as well.

We know from our family business survey that 56% of family businesses in East Africa will prioritise the use of new technologies and 53% will improve their digital capabilities over the next two years.

Rwanda is an ideal investment destination for family businesses interested in next-generation technologies and capabilities that will improve their competitiveness. Additionally, local investments in capital-intensive sectors like energy and commercial property are expected to generate significant returns in the medium term. These are attractive sectors for family business and private company investment.

Meanwhile, the Government continues to focus on positioning the country at regional and pan-African levels as an investment destination through three key channels: the Kigali Innovation City which is intended to promote technological advancements through cluster-enhanced activities; the Kigali International Financial Center which helps to position Rwanda as a preferred financial jurisdiction for investments into Africa; and a new investment law which provides a number of incentives for start-up organisations and entrepreneurs.

KIFC provides certain incentives to attract cross-border investments in an effort to position Rwanda as a business and financial centre of excellence for Wealth Management and Family Offices, Trust and Corporate Services providers, Holding and Headquartered Companies and other entities.

These and other incentives should be highly attractive to family businesses – and the families behind those businesses, many of which will need to manage significant change as their businesses and families grow over time.

Family businesses also tend to share values and objectives that are consistent with Rwanda’s development and growth trajectory. According to our survey, nearly three-quarters of East African family businesses feel that they have clear values and that these values have helped them weather the pandemic’s disruptions.

And with their keen interest in building trust, 64% of family business owners believe that businesses like theirs have an opportunity to lead the way in sustainability practices.

Home-grown family businesses in Rwanda tend to have been constituted in the last 15 years or so, and many are still owned and managed by the founder generation. Another generation of businesses have opened in recent years by founders who may have left Rwanda to study abroad or work elsewhere, but who have now returned.

A number of them are attracting investment or self-financing expansion, particularly those that have a technology or digital focus. These innovative businesses could very well become the multigenerational, multinational family businesses of tomorrow.

The pandemic has certainly presented challenges, particularly for those that were founded very recently. Others with a longer history have tended to demonstrate more resilience.

In response to the challenges some of them were facing, the Government initiated a programme to support the SME sector through access to finance and guarantees for borrowing. Through the Private Sector Federation, the Ministry of Trade and Industry has created a forum for businesses to share ideas and take advantage of opportunities in Rwanda and beyond.

Most family businesses and private companies in Rwanda have not progressed very far with professionalising the business or, as part of that process, succession planning.

Founders who have been in their roles for some time should start thinking about the next generation, whether that means involving their descendants or outside professionals or both, preferably through a structured process.

Looking ahead, these businesses will need to be prepared for growth. Rwanda had a 5.2% compound annual growth rate for five years until 2020. Investments in infrastructure and post-Covid-19 development support should help to pave the way for renewed growth from 2023 onwards.

With the advent of the African Continental Free Trade Area agreement, there are more opportunities for businesses to expand and grow. Now is the time to professionalise, plan for expansion and diversification and cultivate the talent of tomorrow.

The Family Business Survey is available to read here: https://www.pwc.com/rw

 The writer is Country Senior Partner and Private Businesses Leader, PwC Rwanda

The views expressed in this  article are of the writer.