Rwandan private sector can do more to seize opportunities, says IFC boss

IFC Vice President for the Middle East and Africa Sergio Pimenta during the interview with The New Times last week. Nadege Imbabazi.

The World Bank Group private sector arm, International Finance Cooperation (IFC), is seeking to increase its investment in Rwanda in a number of sectors such as agriculture, real estate and Small and Medium Enterprise development.

The IFC currently has investments worth about $132M in the country, which could go up in the course of 2019. The New Times’ Collins Mwai spoke to IFC Vice president for the Middle East and Africa Sergio Pimenta on a range of issues, including the organisation’s opinion on reviving the agriculture sector.


Previously, the World Bank Group has been on record severally saying that Rwandan private sector has not been able to make the most of opportunities in the economy. Is this still the case? It is so, what can be done to turn this around?

The local private sector has a big role to play in Rwanda. If you look at the overall development of the country and what has happened in the last few years, the government has made very significant efforts to improve the investment climate.

In the Doing Business report that the World Bank publishes every year, Rwanda is ranked very high, which shows that the environment is very conducive to be more present.

Our experience is that when you look at emerging markets, the successful development of a country relies on models where the private sector plays a big role.

When it comes to Rwanda, there is space for the private sector to grow. There are opportunities and that is what IFC is trying to support. IFC support domestic private sector development as well as firms coming into emerging markets. We would like to do more.

The IFC was previously involved in the development of capital markets to raise capital locally to finance private firms. How is that going from your perspective?

When you look at the successful models of development and countries that have been able to lift people out of poverty, they have gone through a successful phase of development of local capital markets.

These are good instruments to mobilize resources of the country. This is a good model to make sure that resources are being utilized in the country. IFC in Rwanda we have been helping the development of capital markets so that we can have an influence as the market develops.

What is needed is more of this type of instrument to be issued, more activity on the capital markets which we are happy to support. That will create sources of funding for private sector companies and then they can raise funding to create jobs and have a bigger role in the economy.

SME survival rate in Rwanda, just like in the rest of the emerging markets, is fairly low. How can Rwanda turn this around?

For successful development in the country, you need a wide range of companies, to create such an ecosystem, you need large companies that have a wide reach, you need tier two companies, SMEs and micro-firms.

Each of them contributes to the ecosystem in a different manner. If you look at Rwanda, employment for women is important and you need SMEs to develop that.

We are very keen on supporting them. They need access to finance, access to skills, access to technology among other things. We are keen to see how to avail all that.

The way we do it is that we put in place partnerships with financial institutions where we provide financing that will go to SMEs and share the risk with the banks.

We also complement this with advisory services and have better-targeted services with SMEs and help them grow and develop. It is a very comprehensive package for the economy.

Tea, introduced in Rwanda in 1952, is one of the country’s main cash crops. Emmanuel Kwizera.

The agriculture sector in Rwanda has not had a very rosy story going by its relatively low growth and contribution to poverty reduction. What could you do differently?

You have to look at where the economy is and what are some of the sectors that are very active and where it can grow to be inclusive.

In a country like Rwanda where a large population is rural and working in agriculture, you have to have interventions that help the rural part of the population access finance, technology.

This is one of the areas where we think we can support.

IFC has done a number of investments in the agriculture sector but beyond that, we want to have projects that we a link to the farmers and have advisory projects to farmers and the rest of the sector.

We need to look at the ability to aggregate and help them best optimize and improve their production of the crops that they are growing or whatever activities they are doing.

We need to make sure that we have access to better fertilizer and access to information.

With the digital economy having a big impact on the rural work, farmers can have access to information that improves their livelihoods to know when is the best time to cultivate, fertilize, address quality of the soil, harvest among other things.

There is a lot of improvement that can come to the rural world through the improvement of technology.

Going forward, what ways are you seeking to be involved in Rwanda and by how much?

Our portfolio is about $133M, I would like us to grow our intervention here.  You have to notice what has been done about the investment climate which, is a very good trigger for private sector increased activity.

We mentioned that agriculture is an important sector where we need to see what we can do. We also need to increase our efforts in the housing sector. This is an important need for the population to have access to housing that is affordable.

On this, we are engaging on several fronts both by helping developers provide affordable housing and also helping financial institutions develop the mortgage market to ensure the sector develops entirely.

We are working on both the supply and demand side. It is one of the sectors that we want to support more. Here Rwanda has a lot of capacity in light manufacturing and processing.

That is another area we would like to support. We will continue working with the financial sector to support SMEs.  Another important area is in infrastructure where we will keep looking for the needs in Rwanda and how we can support them.

International Finance Cooperation seeks to increase its investment in Rwanda in a number of sectors, including real estate. File.

Next Month, IFC will co-host the Africa CEO Forum in Rwanda, how is this different from other summits that bring together the rich and powerful?

The unique thing about the summit is that it is focused on private sector. The idea is to bring in very high level representatives of the key companies – not just from Africa – who are interested in Africa.

We will also have very high level participation from the continent. The forum is a large event and attracts a wide variety of people. It’s the first time we are doing this in Rwanda.

At the moment, the country is also promoting tourism and development of industry around it. At the moment, tourism is one of the largest creators of tourism in the world and the successful event will show the capacity of Rwanda to host such events.

It will also have a big impact across Africa and Rwanda too.


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