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- Oct 16, 2014
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The Mikoani Traders Ltd country manager for Rwanda, Mr Jerome Mpagaze, speaks to some of the participants in the Tanzania-Rwanda Trade Forum who toured Azania’s wheat mill in Kigali. PHOTO|SAMUEL KAMNDAYA
In Summary
In 2006, a team of government officials from Rwanda held discussions with Tanzanian investors who operate the Dar es Salaam-based Mikoani Traders Ltd - the producer of several products under the Azania brand name.
By Samuel Kamndaya @TheCitizenTz stindwa@tz.nationmedia.com
Kigali. Until 2001, Rwanda was a net importer of wheat flour and it largely depended on Tanzania’s millers.
That was the situation that President Paul Kagame found when he took office in 2000.
President Kagame embarked on the task of searching for credible investors who would relieve the country out of that mess.
Between then and 2010, Rwandan government officials held discussions with several investors from within the East African Community (EAC) region and beyond. In its marketing approach, Rwanda issued several incentives to investors in that particular field.
In 2006, a team of government officials from Rwanda held discussions with Tanzanian investors who operate the Dar es Salaam-based Mikoani Traders Ltd - the producer of several products under the Azania brand name.
“That was how the decision to build this state-of-the-art wheat flour mill here was reached upon….after analyzing the incentives, the investor saw it was worth it,” the Mikoani Traders Ltd country manager for Rwanda, Mr Jerome Mpagaze, told participants in the recent Tanzania-Rwanda Trade Forum in Kigali.
The company has injected a total of $10 million into the milling plant that grinds 150 metric tonnes of wheat per day, complete with a storage facility that has a capacity of loading 10,000 tonnes of the products at any given time.
True to its promises, the Rwandan Government gave the company- located at the Special Economic Zone in Kigali – everything that would be required for it to operate efficiently.
“Everything was concluded swiftly…..the government provided us with space just as it had promised and actual construction of the mill and its storage facilities took us about 18 months to conclude…as we are talking, this mill has been running for about five months now,” he said.
Being a Special Economic Zone, power cuts do not exist in the vocabulary of investors in Kigali.
“The standby generator that you see there has not operated since we set the plant up…the government has set all the necessary infrastructure including water and roads within the site,” he explained.
For the sake of improving Rwanda’s balance of payments, factories operating under the Special Economic Zone in Kigali are required to export at least 40 per cent of their products.
Azania is specifically exporting its wheat flour to Burundi, the Democratic Republic of Congo and to Tanzania’s Rusumo border point.
The by-products from Azania’s wheat mill in Kigali – bran and pollard – are not thrown away for they are also a source of money.
Bran is fodder and is widely sold in Kenya while pollard is mixed with maize flour to form a food supplement – commonly known as Lishe.
$80 million investments
Azania is one of the tens of Tanzanian businesses that have jointly invested slightly over $80 million into Rwanda’s economy, according to figures produced by the Rwanda Development Board (RDB).
Others like Bakhresa Group’s Azam wheat flour, GSM’s Silversands and Viva Products’ Magodoro Dodoma also have their slots with several locations in Kigali.
“We decided to come here because Rwanda listened to our needs. The incentives offered were good. Besides, it takes just a few days to set up a business here,” said the Viva Products’ managing director, Mr Ali Manji.
It took the company about eight months to complete everything, including building the factory. According to him, in a typical African setting, the same would take at least 18 months.
With its labour intensive $3 million foam making investment, the company has employed about 80 people. “With a population of 11 million people, the market is challenging and especially considering that there are seven foam makers here…Otherwise, with the government’s unwavering support, we have no regrets and we are here to stay,” he said.
Best environment
Presenting a paper at the Tanzania Rwanda Trade Summit on Friday last week, Mr Innocent Ndayisaba from the Rwanda Development Board said it was basing on a track record of Rwanda’s business and investment climate – which has made it possible for investors to register businesses within six hours – that the country’s recent Eurobond was oversubscribed.
Going by the World Bank’s Doing Business Report 2016, which was launched last year (2015), Rwanda remains the best country in East Africa in terms of business climate.
For instance, an investor needs just one day to conduct all the procedures that are associated with the starting of a business. This is because the obtaining of an electronic signature, checking of the uniqueness of a company name and submitting of registration application forms is done online.
Within that same day, one can register for Value Added Tax, purchase an electronic billing machine, register employees at the social security office and pay for the trading license. A reduction in time on registering a company mans that the investor pays less to government agencies and authorities in the process.
The country is also doing well in all the other aspects that are taken into consideration during the task of preparing the World Bank’s Doing Business Report. They include: Starting a Business, Dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders and enforcing contracts.
In Africa, Rwanda is only second from Mauritius. The East African Community (EAC) comes on position 62 globally in terms of Ease of Doing Business while Mauritius, which is a Mauritius, a volcanic island nation in the Indian Ocean, occupies the 32nd position globally. Other African countries that made it on the list of top 100 nations in the ease of doing business and their global ranks in brackets include: Botswana (72), South Africa (73), Tunisia (74), Morocco (75) and Zambia on position 97.
More opportunities
The country, according to Mr Ndayisaba still welcomes investors – and has a lot of potential - in a number of sectors including in tourism, energy, mining, real estate and construction, agribusiness and in Information and Communication Technology (ICT).
With Tanzania’s experience in mining, he said, the country’s investors could bring some meaningful changes.
“So far we have registered a total of $149 million worth of investments in this particular sector and we believe Tanzania can help us in this aspect,” he told some 120 members of the business community from both countries who attended the event.
In tourism, a sector that earned Rwanda some $300 million in foreign exchange money in 2014, the country is now looking towards developing a cultural village in Kigali where at least $72 million will be required.
It is also earmarking the development of several world-class hotels in the Kivu Belt.
In ICT, the immediate focus is on the Kigali Innovation City which will be a hub for software developers and other related products.
