For almost 2 years now, miners have been counting losses following a decline in global prices of major minerals. The unstable prices particularly for metals have significantly affected the mining sector, which is one of Rwanda’s leading foreign exchange earners.
The country’s mining sector recorded poor performance in 2016 leaving miners less optimistic about the situation going into 2017.
However, Ed Kostenski, the founder and president of Nationwide Group, an American entrepreneurial enterprise operating in over 60 countries, and the lead supplier of construction, mining and farm machinery, says time has come for emerging economies like Rwanda to fully take advantage of the rich eco system, especially in mining industry.
Kostenski was recently in the country to launch a lease product (about $200million) designed to support farmers across the country.
In an exclusive Interview with Business Times Peterson Tumwebaze, he explains why the mining sector is set to bounce back among other issues.
You play a big role in the mining sector on the global scale. What is your current assessment of the industry bearing in mind that on average, metals and mineral prices declined by 5.9 percent in 2016, largely lower compared to -21.1 percent in 2015?
It’s an intriguing time to be an investor; though the mining industry slowed down, Rwanda is yet to maximize on this sector in terms of mineral exploration and exploitation.
It is also advisable for government and miners to remain optimistic because mining is going to bounce back. And to maximize on the sector’s potential, sector players must embrace both value addition and mineral diversification because there is light at the end of the mining tunnel.
It is important to note that where money goes people tend to follow it.
There are still lots of minerals that could be underground that when exploited, will help transform the economy In terms of exports and job creation.
Rwanda doesn’t have to just compete with low prices or higher quality to be able to make revenue. They can just drive economists and investors to the economy through awareness.
Why did you choose to invest in Africa and particularly Rwanda?
First of all, there is a niche in Rwanda, there are no complications and the business environment is friendly.
Besides, we were inspired by the country’s Current GDP growth rate levels, which you don’t often see in many emerging economies. This is yet another re-assurance for investors to come invest in Rwanda.
You have been in the country for almost 2 years, how much have you invested so far?
In construction sector for example, we have injected in about $13million capital and we plan to add another 18 million dollars into the industry. This justifies the fact that the country’s construction is doing well to attract more investors.
As an economist, what is your assessment of the continent in terms of economic performance?
Indeed over the past few years, economic growth in Africa has stalled, falling to approximately 1.6 percent in 2016.
This is hardly enough to match an ever-increasing intercontinental population and one with ever-evolving demands to modernize as fully integrated members of the global marketplace. With commodity prices influx and limited oil revenues, sub-Saharan, resource-dependent countries such as Nigeria, Angola, and South Africa have been experiencing a standstill of sorts; severe deficits, high unemployment rates and in some cases, civil unrest as an end-result.
What do you make of Rwanda’s investment climate?
There is a fair system of economics and breeding grounds for big growth for outside investors.
I think more can be done in terms of more awareness about Rwanda. But generally Rwanda is trying to attract investors.
What are some of the challenges you have encountered so far while trying to invest in the country?
The customs Department should find ways of making it easy for commerce to come through. Being a landlocked country, there are some challenges like not having a port so they have to work harder.
Government should create more awareness and support towards the agriculture sector and above all try and keep a low interest rate for farmers bearing in mind that the sector employs more than 72 per cent of the population.
Going forward, what is your Strategic plan for Rwanda?
We have some offers that we will bring up that will enlist the mining machinery and we are guaranteed the business. There is a good demand for it and will increase over the years. As result of the infrastructural development we want to support those in authority. We will create a rental division within six months and will hire the locals.
About investors that quit what is your take?
They may not have assessed themselves because this market is not everybody’s destination. You have to size up your weaknesses and strengths in the market to fit in.
Where do you see the future of financial engineering in Rwanda?
Rwanda has a few banks that are small in nature and I urge the National Bank of Rwanda (BNR) to support the sector with right incentives.
This is critical in terms of investors that will bring capital to these banks and foster financial muscle on the balance sheet by bringing capital to the bank.
It’s going to take local banks to provide money to the investors and that is not happening here which is slowing down growth.
However, the government is on the right track towards supporting infrastructural development and paying their bills on time. We are ready to work with the government in agriculture, construction industry, road construction and mining.
Briefly tell us about Nationwide Nationwide Group International?
Nationwide Group International is the leading project financing powerhouse in the United States of America (USA) with operations in mining, construction and marine equipment supply, Oil & Gas, exploration and productions as well as refineries.
The group of companies started operations as Nationwide Equipment, which Ed Kostenski founded in 1983 in Jacksonville, Florida, specializing in the rental and sale of reconditioned earthmoving and road-building machinery.
The group has since been operating, across several African countries over the last two decades, serving private companies and government bodies.