KIST’s venture into business should be emulated by other varsities

It was quite refreshing news from the new KIST Rector about her new focus to steer the institution towards generating new revenue streams just by using the institution’s vast internet resources. Such a move is not only long overdue, but should be taken up by all the universities in Rwanda as well.

It was quite refreshing news from the new KIST Rector about her new focus to steer the institution towards generating new revenue streams just by using the institution’s vast internet resources.

Such a move is not only long overdue, but should be taken up by all the universities in Rwanda as well.

One can say that such a move is laudable just by looking at the successes registered by public universities in Kenya. This year, Kenyan public universities’ revenues are expected to hit almost US$20 million from similar ventures

The government of Kenya will provide almost the same amount of cash in recurrent expenditure grants. Meaning that grants from the treasury to Kenyan public universities  is  an almost equivalent to what the universities are expected to generate as separate entities .

The bigger implication is that total revenues for the public universities in Kenya have doubled.

Public universities in Kenya are seeking new revenue streams in a move to be self-reliant as student numbers rise, pushing costs of running the institutions up. The institutions have been forced to expand infrastructure to cater for the growing numbers.

Kenyan university dons recall days when they used to rely solely on government support. Before their institutions ventured into private business, the public universities were in dire straits.

Not any more, the dons now say, adding that these new revenue streams have helped their institutions to expand.

I will briefly dwell on the college I attended in Kenya, Egerton University. This institution is expected to break even in the coming financial year after making deficits of US$400,000 in 2009 and US$115,000 last year.

The university owns the 90-bed capacity ARC hotel and the 3,000-acre Ngongogeri farm which specialises in large-scale dairy farming, sheep production, as well as large-scale barley, wheat, pasture seed and maize farming.

Egerton University also owns the Lord Egerton Castle —a tourist attraction and also operates a pharmacy, bookshop, knitting unit and an abattoir.

Prof James Tuitoek, Vice Chancellor, Egerton University says that the farm and the hotel alone contribute about US$2.5 million annually to the institution.

The new move by the KIST Rector Dr.Jean d’Arc Mujawamariya, whom I spoke to at length trying to fully understand the new shift, is to have in place a special purpose private business company complete with a new business plan that projects generating business in excess of  US$1.5 milllion during its start up phase. That is a very bold and laudable move.

What can KIST do within Rwanda’s business landscape? Quite a lot indeed. KIST has a very high potential to spearhead a lot of initiatives that are in line with Rwanda’s aspirations for transformation.

A case in point is the urgent need to build at least 10,000 affordable houses  in Kigali every year. The new company that the Rector is talking about can be a serious promoter of say, another new company that can be created to develop a project to build for instance 5,000 houses in tandem with the Kigali City Conceptual Master Plan.

I am very sure that nobody within Rwanda’s construction sector is currently thinking along  such lines, leaving a wide room for KIST to take a real leadership mantle to handle such a huge challenge that residents of Kigali are faced with. How can such a project be developed?

In order to cut costs, KIST can enter into an initial joint venture with Kigali City Council (KCC) where KIST provides expertise in conception and design while KCC provides land.

Once the approvals have been sought, the project company could seek further partnerships with foreign investors.

Foreign investors will bring in additional expertise in management while at the same time pumping in the millions of dollars needed to scale up the project to the desired heights.

On average, if such a project is to be executed to its  conclusion, the retail value of a single unit would be in the region of  US$60,000 with  an industry  margin of 15 percent.

This means that if KIST would be a shareholder in the project company, with for instance a 10 percent stake, a rough calculation shows that at project completion, KIST would be able to rake in a cool US$4.5 million as profits which can then be ploughed back into expanding its investment within Rwanda’s booming construction industry.

The author is an editor with The New Times
Ojiwah@gmail.com

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