Africa News blog

How to win business in Africa?

African countries are often being told what they need to do to win more investment and expand their economies, but there is always a question as to whether making the changes will really deliver the rewards.

The lesson from top reformer Rwanda seems to support the argument that it is worthwhile.

Registered investment leapt 41 percent to $1.11 billion in 2009 in spite of the particularly difficult global environment. It is expected to rise 20 percent this year. And that is in a small, landlocked country not noted for immense resources, still recovering from the genocide of 1994 and some neighbours that might best be described as unstable.

Rwanda has long been a darling of donors because of its reforms and no doubt also because of guilt over the world’s failure to prevent the mass killings, but this isn’t aid money – it is investment in businesses to generate money and jobs.

Rwanda recently became the World Bank’s biggest business reformer on its Ease of Doing Business Index , leading 10 countries in regulatory reform – the first time a country from sub-Saharan Africa has done so.

It is interesting is to look at where Rwanda ranks particularly highly compared to some other African economies – and notable that this includes areas that involve protection for investors and ensuring the rule of law as well as curbing bureaucracy.

Will EAC’s common market deal work?

For telecoms-tycoon-turned-philanthropist Mo Ibrahim, it’s one step forward, two steps back. For Benno Ndullu, governor of the central Bank of Tanzania, the whole thing is bound to stall unless problems are ironed out first.

For many Tanzanians, it’s a threat to their jobs, language and prospects.

But for the leaders of the five-member East African Community (EAC), signing the common market protocol on Friday represents the future fortunes of Burundi, Kenya, Rwanda, Tanzania and Uganda combined.

Signing the document — the culmination of a relatively speedy 18 months of negotiation — will mean goods, services and the community’s 126 million people can move freely across their borders, in theory at least.

Together, the five countries muster $60 billion in gross domestic product combined, and believe they can prosper better as one unit than apart.

Already they have a customs union, but by 2012 they foresee sharing a single currency and finally political federation.

Women lead from the front in Rwanda’s parliament

After next year’s election in Rwanda, women hope they will take around two thirds of the seats in parliament.

It would be an ambitious dream for equality campaigners in many countries, but after the 1994 genocide, women made up 70 percent of Rwanda’s population.   Rwanda became the first country in the world with a female majority in parliament after last year’s election.   Solange Tuyisenge has a rural constituency and has been a legislator for about four years. She says even more can be done to give women even more political clout.

“We cannot say that we have empowered all women; we still have a long way to go,” she told Reuters Africa Journal.   “We still have girls and women who need representation, to be spoken for.”   She says she believes changing the mindsets of Rwandans is the key, so they “understand that the woman of the 40s is not the same as the current woman, a woman is not only to bear children or stay in the kitchen, there is development”.

Rwanda brought in constitutional reforms to boost the number of female parliamentarians, as well as supporting other projects to develop opportunities for women – such as encouraging them to take up farming.   “Well, personally, the initiative to empower women in Rwanda has really made it possible for me to develop,” Alphonsine Umwubahimana, whose husband was killed was killed in 1994, told Africa Journal.   She signed up for a farming programme, which gave her three dairy cows. She now has 15 and employs seven male labourers.

An estimated 800,000 minority ethnic Tutsis and politically moderate Hutus were killed in Rwanda by militiamen and soldiers during just 100-days in 1994.

Activists from Burundi, where two decades of civil war killed 300,000 people before it ended in 2006, have been to Rwanda to try to learn from its experience.   After changing the constitution in 2005, the proportion of women in Burundi’s government rose from zero to 30 percent.   “Right now we are preparing ourselves for the next election in 2010, so that they can work some more on the constitution and increase the percentage of women from 30 percent to 50 percent in all sectors,” Burundian delegate Manairakiza Godelive said.   Male delegate Nayishake Eugene said: “We have seen the truth … even if we have not yet started the hard part, we now know that it is possible.”

Who gains from Kigali’s building boom?

Economic growth is fuelling a building boom in Kigali, the Rwandan capital, and the city is likely to be unrecognizable within a decade.

A government initiative called ‘Vision 2020′ is intended to transform Rwanda into a middle income country, with a healthy annual growth rate of seven percent.

Rwanda is one of Africa’s most densely populated countries and Kigali needs to deal with a rapidly growing population that already numbers 1 million.

The Vision 2020 construction boom is creating employment opportunities in a country where many have no jobs. At the same time foreign investors are also flocking to Kigali.

But there’s a negative side to the boom. Structures that don’t meet building standards are being demolished.

Absalom Mvuyekure is a landlord whose one-bedroomed house and two other houses that he owns will be demolished. Though the government has compensated him, he is unhappy.

“For this house of mine the government gave me $9,000 while if you look at the current market value I should have been given about $18,000 dollars. So definitely I am not pleased with this,” he told Reuters Africa Journal.

Rwanda: legacy of a genocide 15 years on

This April marks 15 years since the Rwandan genocide, an event that still casts a dark shadow over the region. It was a killing spree that lasted just three months, but that left 800,000 people dead, most ethnic Tutsis, killed by soldiers and civilians from the majority Hutu ethnic community.

It took an army of exiled Tutsi Rwandans, led by Rwanda’s current president Paul Kagame, to stop the killings. That government, still in power 15 years later, has vowed that a Rwandan genocide can never happen again. It’s a policy that has had a deep impact on the whole region, especially on Rwanda’s bigger neighbour, the Democratic Republic of Congo.

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Stumbling block for the Pharaohs?

Egypt might have won the last two African Nations Cup tournaments but the Pharaohs seem to have hit a stumbling block when it comes to the World Cup.

For all their prowess at the last two continental championships, and their glittering array of successes at club level, Egyptian soccer is becoming increasingly haunted by the spectre of continued failure to make it to biggest footballing showpiece of them all.

That means a pressured preparation for the country ahead of the start of the vital final phase of qualifiers for the 2010 finals in South Africa.

Already protesting supporters have managed to disrupt training during the week in Cairo as the Pharaohs prepared for Sunday’s Group C game against Zambia.

Sections of fans, hurling insults at goalkeeper Essam Al Hadari, were confronted by other supporters and training had to be halted. Al Hadari remains a figure of some derision after leaving Cairo favourites Al Ahli in acrimonious circumstances for a career in Switzerland.

While this is essentially an old and now tedious issue that long ago should have been laid to rest, it was the spark this week for a broader demonstration of the nervousness of the Egyptians on the eve of the start of the business end of the qualifiers.

They have a quality side, albeit aging, and a great reputation for being almost impossible to overcome at home. But there is also a psychological hurdle that Egypt must get over in the World Cup.

France and Africa. New relationship?

Before Nicolas Sarkozy was elected president in 2007, he made clear he wanted to break with France’s old way of doing business in Africa – a cosy blend of post-colonial corruption and patronage known as “Françafrique” that suited a fair few African dictators and the French establishment alike.

He has made the same point during his past visits to the continent.

“The old pattern of relations between France and Africa is no longer understood by new generations of Africans, or for that matter by public opinion in France. We need to change the pattern of relations between France and Africa if we want to look at the future together,” Sarkozy said in South Africa early last year.

This week he is back in Africa for a visit on which France’s business interests play a very prominent role.

In the Democratic Republic of Congo, Sarkozy called on the country to work with former foes Rwanda and Uganda in a partnership based on exploiting the region’s natural riches.

Another stop was in neighbouring Congo Republic to see President Denis Sassou Nguesso, an old friend of France who seized power in the oil-producing state in 1979, lost it in a 1992 election and then returned five years later via a civil war. In the past, Congo Republic symbolised as much as anywhere the old style of diplomacy.

After the Congos, the schedule takes Sarkozy to Niger, a particularly important country for nuclear power dependent France because of the uranium mining interests of French state-controlled nuclear energy group Areva. It is building a huge new mine in Niger, where the government is fighting Tuareg rebels who demand more of the region’s wealth.

Can local resources power Rwanda?

Africa is the least electrified continent on the planet and getting power into the homes of millions of people who don’t have electricity is an enormous challenge.

Rwanda is Africa’s most densely populated country and 9 out of 10 people there don’t have electricity. The government is now tapping its own natural resources such as the methane deposits under Lake Kivu to try to meet the country’s growing energy demands. 

The lake holds huge reserves of methane, a gas produced by the fermentation of sediments at the bottom of the lake.

Methane is combustible and can be used to produce electricity. But in high concentrations it can also be dangerous.

Alex Kabuto, chief technician at the methane extraction plant at the lake, says the amount of gas under the lake is increasing and it is good idea to extract it to reduce the risk of explosion.

“So the best way for us to do is to extract the gas, use it for energy and electricity it’s good for the country, and at the same time control the lake,” he told Reuters Africa Journal.

Rwanda’s first methane extraction rig opened only last year, after 5 years of building work. Lake Kivu’s methane reserves could satisfy Rwanda’s energy needs for the next 200 years.

Is East Africa ready for oil?

Buoyed by recent discoveries of commercial scale oil deposits in Uganda, east African policy makers, foreign oil explorers and their local partners trooped to a five-star hotel on the Kenyan coast this week to reflect on the progress and chart future strategies.Viewed as a frontier region for oil exploration, east Africa’s first major oil find was made by Tullow Oil and Heritage Oil companies in the Albertine Basin, which spans the border between Uganda and the Democratic Republic of Congo (whose improving relations are making the exploitation of the reserves look morel ikely).Before that, Tanzania had found vast reserves of natural gas in Songo Songo and Mnazi Bay areas.Just like Rwanda, which hopes to revolutionise electricity generation in the region through methane gas from Lake Kivu, Tanzania hopes to power cars from the gas and generate much needed electricity from its natural gas.The regional economic power house Kenya has, however, had disappointing results so far in its search for oil.Although 32 wells have been sunk here since the 1950s, only traces of oil and gas have been found. It is now reprocessing data gathered over that period in the hope new knowledge and technology will reveal hidden deposits.Drilling, an expensive affair that prospectors say can cost a firm $200 million for one well, took a commercial break in the 1980s. But it has also seen a resurgence of interest, thanks to last year’s rise of crude in global markets.Kenya issued 14 exploration licenses last year and China National Offshore Oil Corporation (CNOOC) is set to sink its first well in the second half of this year in the eastern province.Kiraitu Murungi, the nation’s energy minister, told the meeting in Mombasa they were praying day and night for the new well and data reprocessing to show signs of oil.On the other hand,  Uganda — long reliant on Kenya’s ageing oil refinery for its supply of petroleum products — has grand plans for its newfound oil resources.They include the construction of a state of the art modern refinery at an estimated cost of $1.3 billion to process its oil as well as oil from any new finds in the region.Uganda’s energy and mineral development minister, Hillary Onek, spoke of the plans with a grin and added that the region, believed to share common geology, could be headed for a better future as it taps its oil and gas reserves to power development.However, as officials and oil prospectors retired to the hotel’s restaurants and beach bar for a drink in the evenings, they must have wondered if a few obstacles may not block the path to that prosperous future.The global financial crisis is weighing heavily on the finance base of some companies prospecting in the region.Lack of local skilled manpower in oil and gas industry is also worrying. So is the big question of how to equitably manage revenues from oil and gas so that oil and gas do not turn into a curse for the region as they have elsewhere on the continent.Is east Africa ready to handle oil and gas? Will oil discoveries help local communities?

Congo: Step forward or back to the past?

Rwanda sent hundreds of its soldiers into eastern Congo on Tuesday in what the neighbours have described as a joint operation against Hutu rebels who have been at the heart of 15 years of conflict. Details are still somewhat sketchy, with Rwanda saying its soldiers are under Congolese command but Kinshasa saying Kigali’s men have come as observers.

Evidence on the ground suggests something more serious. United Nations peacekeepers and diplomats have said up to 2,000 Rwandan soldiers crossed into Congo. A Reuters reporter saw hundreds of heavily armed troops wearing Rwandan flag patches moving into Congo north of Goma, the capital of North Kivu province. The world’s largest U.N. peacekeeping mission is, for now, being kept out of the loop.

Foreign soldiers in Congo are nothing new. Rwanda first invaded in 1996. A 1998-2003 war in Congo sucked in six neighbouring armies. But after years of diplomacy and billions of dollars spent on peacekeeping and Congo’s 2006 elections, analysts are frantically trying to work out what is going on.

The current joint operation stems from an agreement signed in December between Rwanda and Congo to cooperate more closely after weeks of heavy fighting in North Kivu province. Although the fighting was officially between Congolese government forces and Tutsi rebels, most analysts saw it as an escalation of a proxy war between Rwanda and Congo that has continued despite 2003 peace deals.

U.N. experts have accused Rwanda of supporting the Tutsi CNDP rebels, formed in 2004 out of previous Rwandan-backed movements that fought against the government in Kinshasa. As on many occasions in the past, Congo was, in turn, accused of arming and using Rwandan Hutu FDLR rebels to boost the effectiveness of its fragile and chaotic army.

The fighting underlined the weakness of President Joseph Kabila’s army, which looted and raped civilians as they fled the CNDP. But it also refocused attention on the Hutu rebels, many of whom crossed into Congo when they were routed after taking part in the 1994 genocide of Tutsis and have long since been used by both Rwandan and Congolese Tutsi forces as justification for military operations in the mineral-rich east.

Rwanda and Congo have frequently agreed to resolve the FDLR problem. With talk of normalising relations, does Tuesday’s intervention by the Rwandan army mark the first concrete step in new a new relationship between the two countries?