A little over one year ago the Rwanda Development Board (RDB) was created out of eight previously separate government agencies and given the mandate of fast-tracking private sector development in Rwanda. Joe Ritchie, an American businessman with long ties to Rwanda, was named as the agency’s first CEO. Ritchie has now passed on the baton to John Gara. Before his departure, the American Entrepreneur shares his experience with The New Times. Below are the excerpts.
What is the biggest change you’ve seen in Rwanda’s business climate over the last year?
It is difficult to name them all, but I will pick a few that come directly to mind.
First, and most widely publicized are the improvements that have been made in regulations surrounding setting up and running a business in Rwanda. Many changes on that front include reducing the number of days, forms and costs associated with starting a business; establishing commercial courts which are specially designed to handle business disputes, and so on.
These reforms earned Rwanda the number one spot for business sector reforms in the World Bank’s annual ‘Doing Business’ ranking; the first sub-Saharan country ever to receive that honor.
We also expect that at the end of 2009 we will see more businesses started this year in Rwanda than in any other previous year.
That means more jobs for more Rwandans. 2009 will also mark the country’s highest ever amount of foreign money coming in for investments and job-creation in Rwanda. Those are just three changes that all Rwandans should take as a vote of confidence in this country and its future.
What were some of the biggest challenges you faced as the inaugural CEO of RDB?
I’ve found that there are two major challenges when making the transition from being in the private sector to being in a government role. Many people assume that this has something to do with moving from a profit-based motive to one of public service, but this is not the case.
When you are working in the private sector, you are focused very intensely on gaining advantages for your company that will give you an edge in the business environment.
In my role at RDB, my focus was the same, except now my company was the government and people of Rwanda, which meant I was intensely focused on gaining advantages for the government and the people of Rwanda; finding ways to increase Rwanda’s position in the marketplace of investment and partnerships.
But there are difficulties associated with achieving this in the public sector that do not exist in the private sector. Primarily mindset and personalities.
In the business world there is a saying, “time kills deals.” In other words, if you take too long to make a decision and act on it, either your competitors will have already exploited the opportunity to their advantage or the opportunity will be gone.
There is no similar saying or mindset with governments, and that is a difficult thing to manage when you’re coming from being in the private sector for so long.
In government, there are many stakeholders involved in every decision, no matter how small. So you can have a situation where everyone is in agreement that something is a good deal for Rwanda, but by the time you have gained the agreement of everyone who needs to see it and filled all of the proper forms, the opportunity has passed by.
This gives rise to the second difficulty: personalities. Given that there are many stakeholders involved in every decision, it means that even very small people in the process can stop important decisions from being made.
This sort of a situation gives those people a lot of power and a lot of responsibility. You often find yourself in the position where someone either wants to flex their political muscle or they are scared of being held accountable if they make a wrong decision.
This means the core problem blocking huge progress is self-interest on the part of people involved in the process. This is not unique to Rwanda, but it is a common problem in most governments and it usually means that trying to clear the blockage is a recipe for conflict and requires someone who is not scared to make some enemies in the course of getting work done.
What can we expect from the new CEO at RDB?
First, let me say that I am very excited about the future of RDB under John Gara. I have spent a fair amount of time with him, and I am impressed. He is a very straightforward and capable businessman and I was very pleased with his selection.
My tenure at the RDB was intended to be a temporary, of course. The plan was for me to get the organization up and running, inject as much of a private sector mentality as was possible and then to find a Rwandan CEO to hand over to, hopefully within a year.
So we are a little behind schedule, but it was worth the wait to find just the right person to hand the organization over to.
I think that John is straightforward, no-nonsense style will be a huge asset. In any large organization, and particularly in governmental organizations, things can get political very quickly. One of the best antidotes is simple, straight talk. I think that John will be excellent in this respect.
Additionally, I think that being Rwandan will have some huge advantages! While I understand the President’s thinking in wanting to kick off the RDB with an American businessman at the helm (Singapore also started their Economic Development Board with a foreigner as CEO), I think that in the long run, this is certainly a role that should be played by a Rwandan. An outsider has some advantages, especially at the start; but also some huge disadvantages.
Let’s all hope that we can figure out how to get the best of both! Frankly I’m quite hopeful!
But to answer your initial question, under Mr. Gara I think you can expect to see a lot of the successes we registered in the first year institutionalized in the agency.
As you know, the RDB has recently embarked on a large-scale re-organization. This is a very healthy place for the organization to be at this point and I commend the government for so quickly being able to digest what we have learned over the first year and being willing to implement those changes.
So Mr. Gara will be helming RDB into its second major phase and I think, under his leadership, there will be great advances made over the next year in terms of business, investments and jobs all across the country.
Will you continue to work with Rwanda going forward?
Of course! My relationship with Rwanda is an indefinite commitment! As excited as I was to help establish the RDB over the last year, I am even more excited and optimistic about my new assignment, which is almost precisely what I had in mind when, at the President’s Advisory Council in April of last year, I recommended to the President the creation of a small “Thing”, with the purpose of selectively providing help to different parts of the government and private sector where there were opportunities to achieve outsized economic results for Rwanda and its people.
I can’t talk too much about what that is at this point, but suffice it to say, I think this new role will be one that is right in my sweet spot!
What do you think are some of Rwanda’s biggest opportunities in the near-term future?
When I first came to Rwanda nearly seven years ago, I immediately noticed that there was something very promising here.
I have worked with many countries in the past including the USA, Afghanistan, China, Japan and Russia, but in Rwanda there was something that none of these other countries had in equal measure: leadership that thought more about the people than about themselves. When I saw this, I told all of the good businessmen that I knew that they should be investing in Rwanda because when you have leadership like that, businesses are able to flourish and ordinary citizens can expect to get jobs and live stable lives.
To me, that was very exciting because it meant that Rwanda had a chance to do something that no other country had ever done. They could move from devastation to prosperity within a few decades.
But beyond having good leadership, there are several other components that need to be in place for this to happen. When I was at the RDB we began to work on one of those things: customer service.
People will start businesses in Rwanda because there is stability and good leadership, but for those businesses to remain profitable (so they can afford to pay and hire more employees) they must have loyal customers, and loyal customers are built on good service.
Another quality that must be in place is timeliness. As I mentioned earlier, time kills deals. This is true of really big deals like power plants and airports, but it is also true of the millions of smaller deals that happen every day in the government, in business and in person-to-person transactions all across Rwanda.
If deals and transactions are the power of an economy, then timeliness and customer service are the oil that keeps the engine running smoothly.
I think for Rwanda going forward there is tremendous opportunity to increase not only investments and businesses, but also in improving the customer service and timeliness to make this the standard mindset of all Rwandans.
His Excellency the President has also set an ambitious goal to move Rwanda as quickly as possible from depending on foreign aid to self-dependence based on the Rwandan economy.
This is an ambitious goal that requires exactly what I have mentioned above. Foreign aid moves slowly and the rules of the private sector do not apply so much to securing that money, but if a country wants to become self-sufficient then they need to adopt the mindset of facilitating all of those small and large transactions which make a healthy economy.
That means adopting a mindset of customer-service and timeliness, from the most humble farmer to the most powerful official. But this is something that I feel is achievable in Rwanda and it gives me great hope.