President Paul Kagame has welcomed the interest expressed by the German Business Community to invest Africa and Rwanda in particular.
He said this Thursday evening at a dinner hosted by Altira and the German Business Community in Germany.
He pointed out that despite the negative media publication on Africa, there was a big story of investment opportunities that remains untold.
The President is on a four-day state visit to Germany that started Tuesday. . SEE FUll SPEECH BELOW
I am delighted to join you this evening and share with you a few thoughts on the prospects for greater investment in Africa and in my own country – Rwanda.
I trust that your discussions this afternoon on this subject matter were fruitful.
We welcome very much the German business community’s renewed interest in investment opportunities in Africa and in Rwanda in particular – your efforts will most certainly be rewarded.
I am fully aware that a cynic might wonder about the usefulness of the renewed attention to our continent – given some unpleasant messages and images on television screens.
There is, however, more to Africa than meets the eye – as demonstrated by, among other things, the continent’s overall economic performance during the last decade. Africa’s growth has on average been around six percent in the past several years – a far cry from the economic decline or even collapse that characterized much of our continent during the "lost decades" of 1970s, 1980s or even the early 1990s.
In spite of this remarkable progress, some potential investors cannot help but wonder:
Is there something fundamentally new and sustainable about returns on investment in Africa, or is the current performance simply good luck, with an inevitable return to the bad old days?
No one would question the fact that overall global economic conditions have been favorable in recent years in terms of what our continent exports –primary commodities.
In other words, to some extent, good fortune has contributed to Africa’s positive economic performance.
But this is not the whole story.
Africa has also benefited from substantial debt relief. Once again, sceptics may argue that this is not due to home-grown policy actions but rather the kindness of the developed world.
However, the truth is that one of the pre-conditions for debt relief is a track record of macroeconomic stability. In fact, most African countries, including Rwanda, have satisfied this requirement and we continue to improve our economic management capabilities. Similarly, the business and investment environments have also greatly improved as a result of national efforts.
No one would deny that we have received support along the way, but we have been the driving force behind these reforms.
Let me now share with you a few other examples that further dispel the negative perceptions of our continent.
Look, for example, at the performance of established African companies and the actual in-flows of foreign investments to the continent.
Africa’s top 200 companies have recently been ranked, based on data disclosure from the stock exchanges where these companies are listed, with some interesting findings.
Although, for instance, most large companies are based in the larger African economies such as South Africa, Egypt and Morocco, firms from more and more African countries made the list – including those from Nigeria, Ghana, Senegal, Kenya, Botswana, Mauritius, and Tunisia.
In addition, Africa-based companies are beginning to acquire significant size: the top African company is worth seventy two billion US dollars ($72bil) while the 200th African company is valued at three hundred and seventy five million dollars ($375mil).
Perhaps even more revealing, the leading industries in Africa are no longer limited to minerals, oil or gas. The new leading companies include telecommunication, financial services, construction, transportation, consumer goods and manufacturing.
This indicates that there is in Africa a growing market and attractive investment opportunities in ICT, finance, construction and transport sectors. Other sectors like pharmaceuticals, media, entertainment and leisure are also progressing at a good pace.
Rwanda is yet to feature on this ranking and our own stock exchange has only just been established this year. Nonetheless, the investment opportunities in our country follow similar patterns to those of the rest of the continent, with important returns in ICT, finance, construction, energy and transport.
It is not surprising, therefore, that these sectors are attracting foreign investors.
German interests are well represented in Rwanda. For example, the African Development Corporation, with funding from the Altira Group, is investing in the financial sector, ICT, and in real estate.
From next door in Austria, the Vienna-based Strabag Company is investing in construction. Other foreign ventures are to be found in the energy sector. Currently an American Group- Contour Global, is investing in methane gas development. These companies are rightly investing in Rwanda’s potential and will most certainly reap the rewards of their investment.
It is, of course, true that Africa’s share of 1.3 trillion US dollars of global Foreign Direct Investment remains too small. But even in this case, Africa’s stake reached thirty nine billion US dollars ($39 billion) in 2006, doubling from its 2004 level.
Beyond multinational corporate Foreign Direct Investment, there is a growing interest in Rwanda by sovereign wealth funds, such as Dubai World, as well as private equity firms and venture capitalists.
The latter include public funds channelled to the private sector, such as those from the International Finance Corporation of the World Bank Group, and the European Investment Bank of the European Union. Similar investments have come from the Netherlands, Belgium and the United Kingdom – and are enabling the expansion of various sectors, including Rwanda’s tourism industry.
Undeniably, we still face many challenges in Africa and in Rwanda – notably with infrastructure and human resources.
We need to generate more and cheaper power, aggressively promote more ICT, build better roads, airports, railways and bridges, in order to reduce business operating costs and to competitively export local products to regional and international markets.
Like governments elsewhere, we have to realize that we cannot tackle these tasks alone and must instead turn to the private sector to bring in the required finance, technology and skills. In some African countries, like Rwanda, the infrastructure challenge is compounded by limited human resources needed to tackle complex projects and offer win-win partnerships with the private sector.
There is no doubt that strengthening the framework for Public Private Partnership in Rwanda is essential for sustaining our economic growth and development. We continue to reform the way we work with private investors to guarantee the process is streamlined and hassle-free.
Let me in conclusion re-emphasize the fact that there have been significant and fundamental improvements across Africa – and that, what we have achieved in recent years in Rwanda, given our recent history, should not be underestimated. It is also an indication that other countries in Africa can do the same given dedication and the right policy direction.
In fact, the business environment and investment climate in Africa, and Rwanda in particular, are the best they have ever been. Even solving infrastructure and human resource challenges can be viewed as investment opportunities – not as an obstacle holding us back.
Africa and Rwanda are seeking serious business partners, and ultimately the dignity as well as satisfaction, that comes with earning our own way into prosperity.
I want to welcome you all to our country and through Rwanda, to other parts of Africa – come and see for yourselves what we are about and what we offer in this partnership that is very crucial to the livelihood of our citizens.
I cannot end without thanking you for the faith you have in Rwanda and in the leaders of or country. This faith enhances our determination and capabilities. I wish to express my deep sense of appreciation because trust and faith are important, especially in business, and I am grateful for this opportunity to engage and realize the benefits of investment. I appreciate you, your time and your resources.
I thank you for your kind attention.