The surge by local investors to spearhead their country’s transformation as a complement to Foreign Direct Investments (FDIs), is a perfect case of just what lies in store for Rwanda in the next 10 or so years, before the final countdown otherwise known as vision 2020.
I had the privilege to be a journalist who was allowed access to provisional statistics by Rwanda Development Board’s investment promotion division that compiled registered investments for the second quarter of this year.
As a journalist who was tasked to provide the angle for this particular story, one thing came out of my analysis that I decided was my major line for this breaking story.
While RDB is comfortable with saying that locals are “complementing” FDIs, in this personal opinion, I want to use a better and stronger term to describe this emerging scenario.
I am choosing to use the word “usurping” rather than “complementing” due to the timing of this rather interesting scenario.
RDB uses the mild word “complementing” as it was originally planned that FDIs will be the engine of the transformation which is 10 years away.
However, the second quarter results show that out of the 30 or so of the biggest registered projects by RDB, well over 20 represent the work of local investors.
Further still the three biggest projects for the second quarter was spear-headed mainly by locals. The biggest project was the Paradise Hills Hotel which is a joint venture between Rwandans and foreigners.
The second is the Rwanda Tourism University (RTU) construction project which is purely a home grown venture. So is the third biggest project registered by RDB which is the planned take over and eventual restructuring of Rutsiro Tea Factory away from government into the hands of the private sector.
In my excitement of compiling this story, with this particular angle of local investors taking a more prominent role, I asked Clare Akamanzi RDB Chief Operating Officer (COO) a simple but pertinent question.
Ordinarily, I put it to Ms Akamanzi, we would have a tea factory slated for privatization being snapped up by foreign investors as locals would not be in a good position to withstand the pressures and rigours of competing with foreigners.
Yet in this case a local has done just that. My question to Clare Akamanzi was-what does it mean? “It means that our local private investors are becoming stronger and capable of undertaking bigger investments too, to complement foreign ones”, She responded.
Ms Akamanzi added that opportunities available in Rwanda should be tapped by both foreign and local investors who are capable.
This is where I got the word “complement”. Ms Akamanzi was quick to add that locals are always contributing about half of the registered investments. That observation is just fine coming from the RDB COO.
But my point is-how many have so far dared to take on what Egide Gatera- the person spearheading the Rutsiro Tea Factory restructuring bid has taken on?
How many local entrepreneurs can successfully bid for such a prime asset that must have been eyed jealously by high profile foreign investors?
It is common knowledge that few would dare to ride what would commonly be perceived as “rough” and “un-chartered” waters. The common wisdom would be that it is always better to play it “safe” meaning the usual “wait and see” attitude.
If anything that could be the main reason why Gisovu Tea Factory is safely in the hands of foreign investors much as it is known as a prime asset that locals should have taken a serious bid to capture.
What is precisely my point here? It is very encouraging to have locals taking a serious shot at some of the opportunities that privitization programme is offering. It should not be the case of “waiting” in order to do it later but rather it should have started in yester years.
We know that FDIs are still superior to local investments in terms of economic impact because FDIs come in huge dollar values and usually target strategic industries. However, it is worth noting that local investments can act as cushion from a slump in FDIs.
The effects of global financial crisis is still fresh in the minds of African economies.The author is an editor with The New Times