By 2020, it is projected that the fledgling private sector will be the engine for Rwanda’s economic growth. In order to get to such a situation, two main parties will be accountable: The Private Sector Federation (PSF), the umbrella body of the Rwanda’s business fraternity, and the Government of Rwanda. You would say the Government has really tried to do its part—creating an enabling environment in terms of policy and regulation. The ball then crosses to PSF’s court. In this interview with PSF Chairman Mr. Faustin Mbundu who is hardly a year in office, talks extensively about critical administration and operational issues of the federation that will define its path to prosperity to become a sustainable member based organization.
The PSF National Elections that ended last year saw you at the helm (of the federation). There is a lot of anxiety and expectation among the business community. In terms of administration, where are we today?
It is quite encouraging to note that during the just concluded PSF elections, we continued to register strong candidates who vied for leadership positions. Over the last couple of months we’ve got down to serious business, striving to take the Federation to the next level. It is safe to say that with the calibre of leadership, at all levels of PSF organisational structure, the federation continues to produce exciting results by the day.
Even more important are the profiles of these leaders—most of whom are business leaders and are quite knowledgeable about corporate governance, who understand the business environment quite well and how it should improve. Having such credible persons at the helm of the federation leadership gives me pride and confidence that we’re now ready to take (the federation) to the next level.
As the chairman of the Board, I see a lot of enthusiasm to deliver—the self-drive to have a better federation. Notably, we have five active committees that are evidently on top of their game.
These are; Advocacy, Finance and Administration, Assets and Investments, Governance and Operations. We have increased the frequency of BOD meetings from quarterly to bi-quarterly. At such meetings, these committees report progress on action plans.
We hope to ensure maximum efficiency through this mechanism. For instance, we have been so busy over the last couple of weeks during the countrywide road show—signing partnership MOUs with District Officials and Setting up PSF Offices to ensure effective advocacy of our members at the grassroots. We envisage a participatory kind of leadership, thus decentralizing PSF services means a lot to us.
Having a framework is one thing, and making it work efficiently to benefit members is a different and perhaps more challenging task. What mechanism is PSF putting in place to become more relevant to members and business community at large?
We are at such a critical stage where our members expect a lot from us—which is quite encouraging because as we continue to deliver to their expectation the more relevant we become.We count on their support to be able to sustainably deliver and also grow. We truly appreciate donor funding because it has pushed us this far but we can only be sustainable as an institution if our membership subscription grows steadily.
We consolidate and build on all revenue generating initiatives of the federation to become more sustainable—this is where the two committees; Finance and Administration, Assets and Investments become instrumental. And, we are seeing good progress in that direction.
How do you ensure PSF becomes a sustainable institution?
Good question! Precisely, the answer is; if only we could efficiently run all our revenue sources and (more importantly) if all our business people could become PSF members by subscription.
Surely, this is what we aim to achieve. In the short and midterm, we shall obviously need donor funding to supplement our budget but we are striving hard to grow revenue-wise to keep reducing that proportion of external budget contribution.
I would be more confident if the proportion of member contribution to the budget is substantially higher than any other form of contribution though—because then it brings that natural drive to reciprocally deliver value for their support.
I am sure the members can continuously give us more money if we deliver on the promise—that is; proactively and efficiently advocate for their business interests and facilitate growth of their businesses.
In a few coming days you will lead all PSF new leaders to a retreat. What is topping the agenda?
We are midway our Strategic Plan. During the retreat, we shall have the opportunity to reflect on and take stock of its implementation.
We hope to identify areas we are doing well, but also identify gaps for improvement. Most important, we aim to enhance ownership of PSF—instilling a sense of participatory leadership.
There are issues that (PSF Secretariat) is supposed to advance, but there also those that are particular in nature and can be solved at different levels of the federation structure.
During your recent countrywide road show, business people expressed concern about Provincial Investment Groups (PICs) that have delayed to takeoff. What is being done?
Establishing such investment groups is a wonderful idea and the brains behind it are applauded. However, moving forward, we shall need to redefine a few things (conceptually) in order to expedite the process.
Clearly, it has emerged that it is way more than just pooling resources. The initiative needs to be taken through all the stages.That is why we are creating a department to look at such collective investments. We shall provide technical assistance to operationalize the Investment Groups across the country.
Besides, we have discovered many similar (already operational) collective investments whereby with minimal technical support they can be good models to others that are yet to start.
A good example is the Carpentry Business Association at Gisozi who’re generally successful and have now diversified into building shopping malls. With minimal technical support in their core investment—carpentry and joinery, we could see more value addition in their furniture products to become even more competitive.
Another is Champion Investment Corporation (CHIC) also now putting up magnificent shopping complexes in the city—a lucrative business. So, through this department, we shall be supporting both existing collective investments and those that are yet to start. We continue to encourage business people to pool resources to invest in sizeable ventures.
To reduce aid dependency, Rwanda must reduce her trade deficit by increasing exports in terms of volumes and value. We now have the export promotion strategy. How does PSF contribute to this?
Yes, the government has indeed done its part and continues to do so through the export promotion strategy and all the facilitation that comes with it. On our part, as private sector, we are seriously planning to seize opportunities in the export sector by among other things; empowering private collective investments.
PSF has put in place a framework that business people can take advantage of. For issues that may bog down their (exporters) trade we’re more than ready to engage government and other stakeholders.
We count on Exporters Associations in this endeavor and pledge our full support. The ground is now leveled: We have signed so many cooperation agreements (MOUs) worldwide which we are proactively operationalizing to the benefit of private exporters.
Issues to do with the Private Sector Development are quite dynamic. Is there a mechanism in place to ensure that PSF proactively reacts to market trends locally, regionally and globally?
We have a department charged with undertaking research at regional and international levels.True, to be able to efficiently react to market trends locally, regionally and globally, we need to reinforce the department and task it with clear deliverables.
That way, we shall effectively engage stakeholders from an informed or evidence-based position.
Part of PSF success story eleven years in operation is the organization of trade fairs and facilitating business people to participate in foreign expos and go for business study tours. Is there a mechanism to substantiate how much all this contribute to national economic growth and development?
An element of success has been through business networking and partnership opportunities and attracting investments. Can I put a figure to how much this has contributed over the years?
No at the moment. Honestly speaking some things are very hard to measure or quantify, but you can give a close qualitative estimate of the impact this has had on Rwanda’s economy—especially if you aggregate aspects like; increase in number of exhibitors, number of countries represented, improvement in profiles of exhibitors etc.
By the sheer growth or improvement in these and other aspects it shows the initiative is worth pursing and is quite attractive and is thus good for economic growth. Repeat exhibitors are also another important indicator. Internally, the Expo is contributing substantially to the budget of the federation.
Thus, our growth as an institution is partly attributed to the exhibitions. We are now overwhelmed by numbers in terms of participation, meaning we need to up our game both in preparations and facilities—there are already big plans in pipeline.
The Government strives to do its part in terms of policy and regulation and creating an enabling business environment. It also supports PSF directly—for instance it gave PSF 18 hectares of land for the RITEP Project, it gave all Rwanda plots in Kenya, Tanzania and Djibouti to PSF to develop them etc. With the way things are unfolding, do you see PSF coping with developing such facilities?
True, the government has been very supportive—not only in creating an enabling environment but also providing direct material support to PSF, in so many ways.
What I can say, the Assets and Investments Committee is taking this issue seriously –making sure that all ongoing and planned PSF projects are realized. According to periodical reports we receive at BOD meetings, the committee in charge is progressing quite well. For instance, the RITEP project is being reviewed so it can be developed in phases basing on the (financial) resources available.
The first phase may include facilities and structures for PSF Headquarters, Kigali International Arbitration Centre (KIAC), Chamber Offices and building of permanent exhibition ground. Developing Rwanda plots abroad is also being done in close collaboration with our partners, including Ministry of Trade and Industry (MINOCOM) and MAGERWA.
We are starting with developing Mombasa plot in Kenya and shall progressively move on to developing other plots to the benefit of our business community. Progress on Mombasa plot was initially hampered by the issue of squatters but thanks to the Rwanda Embassy in Kenya for the support rendered in sorting this issue out.
Additionally, we are also encouraging individuals (Rwandans) to partake in the development of these plots through share contribution.