Liberalisation of Rwanda’s economy has brought with it new realities. Different sectors of the economy are open than ever before. Competition is now a certainty. Three sectors, including telecoms, banking and beverages best capture this mood as rivalry takes root, thereby shaping up the dynamics of the entire economy.
The net effect is that the policies of yesteryears that were grounded in sheltered economics has given way to a more levelled playing field to determine the direction a particular sector takes.
It is of course the end users who are the major beneficiaries as costs are driven downwards while players make readjustments by seeking to be more efficient in order to remain relevant. Within banking, brands like Rwanda Commercial Bank (BCR) or Bank of Kigali (BK) are now radically repositioned with the aim of fenduing off intense competition from new entrants such as KCB, Equity, Fina Bank and the rest of the pack.
The new fact of life within banking dictates that new entrants such as KCB must work overtime to get by as well as stay afloat. Within less than five years of operations, KCB posted earnings worth over US$800,000 thus confirming what competition can do to any sector. Equity Bank says it is keen to shatter the KCB record by breaking even next year. It may make history if its aspirations come to pass.
Older players like BCR went through an intense house cleaning exercise to post strong earnings last year. The metamorphosis of the main player, Bank of Kigali (BK), best illustrates the changing fortunes in the banking sector. In the last four years, BK has gone through one of the most intense restructuring programmes in the country’s corporate sector.
According to authoritative analysts such as Renaissance Capital, the bank has meticulously built its brand compared to its peers. BK is now set to spread its footprints outside the country’s borders, the first such local firm to do so. One industry analyst says; “these are very exciting times to play in Rwanda’s banking sector.”
The same level of competition is happening in the telecoms sector. For instance, Tigo Rwanda made history subscribing one million users in less than five years of operation.
The dynamics saw calling costs prices plunge thereby bringing millions of Rwandans into the national telecoms network. Industry observers are keenly waiting to see what new entrant, Bharti Airtel, how the situation envelops in the next six months.
In the beer industry, Rwandans have been treated to what amounts to high octane drama in the last few months.
Two players Bralirwa Ltd, the largest in the market and its rival Brasserie des Mille Collines Ltd (BMC) have chosen to engage consumers using different value propositions but with different forms of consequences.
Bralirwa launched the second season of its famed Primus brand activation contest dubbed “Primus Guma Guma” Super star talent search while BMC plotted a classical consumer promotion dubbed “Drink and Win” with Skol.
What is important in this case is the level headedness in reporting how the drama unfolds. The fact of life is that competition is here with us. It is a new fact of life. Both brewers are aware of the effects of competition.
However, it is only too early in the day to say which brand is really winning the hearts and minds of consumers.