Do you want to know more about lucrative African business opportunities? In Rwanda in particular?
Dear Africa Business Jumpstarters, I am back from our amazing Africa Business & Investment Mission to Rwanda and I am finally delivering my long-awaited detailed insights into the latest opportunities in Rwanda . Thank you all for your patience, I appreciate it!
So again, to give you some background in case you missed: I took two mission groups onto the ground to get started in Africa the RIGHT WAY. And in my books that means to get started in a way that allows you to cut down TIME, RISK, and related COST while finding a business or investment model that can be aligned with your very own personal circumstances. That’s so important to your success, but in my view not nearly enough people are aware of that.
Most of our participants were from the African Diaspora in the USA, and a few others were based in Europe, Australia, and on the continent itself. They all had very different amounts of capital and resources available to them, some knew Africa well and some visited the continent for the very first time, but all were amazingly and equally eager to get started without delay. I have to say both groups were fantastic and we continue to communicate among each other. I spent a total of two weeks – 1 week for each group – with our participants in Rwanda. We worked 10 hour days attending a total of over 30 meetings and project sites (yep 30!) liaising with Rwanda’s state ministers, MPs, industry associations, local entrepreneurs and business leaders.
I have to confess, after our successful business mission to Ghana I was a little worried if I would be able to match that in Rwanda and all I can say: Yes, we did it! We spent a great time together, and I believe I can confidently say that we were pretty productive. In the end of the mission our group understood the market very well, they had clarity about the next steps they had to take, had established local industry contacts, and they were grateful and exhausted – and that really is the combination I am looking out for 🙂
I also want to mention again that I chose Rwanda and Ghana not by default or because I had personal connections there, but because they are – what I call – clear Low Risk / High Opportunity Markets and this is really the strategic approach I teach among other things to get the Diaspora started in Africa faster and more confidently.
And I think there is one thing that I would like to mention, because it may all give us some hope and optimism where we need it: I was actually amazed that in both countries several state ministers took the time out of their busy schedules to meet with our small Diaspora groups personally to present opportunities available in the market. They could have sent representatives of their ministries to do that for them, but they decided to welcome us themselves and engage in discussion, although we had no embassy or state department or powerful company behind us – we were simply Africans and friends of Africa who wanted to contribute. We often complain about our leaders in Africa (and rightly so), but I was humbled by those gestures of respect by a total of five state ministers – one meeting us even twice – and they made it very clear: They want the Diaspora to invest.
Before I dive into the opportunities in Rwanda, here is just one important aspect that I want to clarify straight from the start, as some of you may want to know this: Yes, you can get access to land in Rwanda be it for agribusiness, real estate, or manufacturing – even as a non-national! – and it is very straight forward, which really is a rare gem anywhere in Africa. You can buy land if you can afford it or you can lease it, which can be pretty inexpensive you may be glad to hear.
[Read my top guest blog: Nine Reasons Why Doing Business In Rwanda Is A Smart Strategy]
Maybe you will be able to join one of our future missions. I really hope so! But for now, let me share with you what we found:
#1 Export coffee or add value to raw coffee beans – you will love the taste of it all!
Let me tell you one thing: Getting started in Africa does not need to be complicated and here is just one opportunity of many! Coffee.
Rwanda is a major coffee exporter, and coffee is a product that continues to be high in demand globally. We were astonished to hear that Rwandans actually do not drink coffee. It was introduced in Rwanda by the Belgian colonialists and farmers were forced to plant coffee beans, but they were not allowed to drink coffee themselves. And until this day coffee has always remained an export commodity in Rwanda with a very small market nationally but a great market globally. Well, I have to confess, knowing our significant coffee tradition and deeply rooted ceremony in Ethiopia and Eritrea I was surprised to hear that, but was glad to be learning new things every day. However, Rwanda is keen to change that. For now it focuses on both improving local value addition, so roasting, packaging, and branding the coffee locally instead of merely selling the green beans. And Rwanda wants to increase the sales of coffee on the global market.
There are only 16 coffee roasters in the country, and we have been told that extensive opportunities exist for you.
We met with one of the local roasters and also with the Coffee exporting department of the National Agricultural Export Development Board (NAEB).
Here are two easy business models that can be started in Rwanda’s coffee sector without much capital, and you can always branch out into more capital intensive avenues within the industry once you have put your foot into the door:
Find buyers and earn a commission
You can find buyers for the coffee and earn a commission for each sale. One local company for example offered 2,5 – 5 % in commission. They told us that one of their buyers was an individual from the US who had managed to get an American hotel chain interested in the coffee, so now he gets a percentage for each purchase they make. And he can find more buyers to build on that.
You see, doing business with Africa does not need to be risky, capital intensive, or require you to relocate!
I am not saying it is easy, and it will certainly not fall into your lap, but it is so very much possible for anyone who puts his mind to it. And it is reoccurring commissions thereafter for each purchase made.
Create your own coffee brand – you don’t need to grow or roast the coffee!
Yes, you can create your very own coffee brand! The coffee roasters we met in Kigali told us that there were opportunities to buy the coffee roasted but in plain bags. You could then either re-package that into your own branded bags where ever you are based, or – possible and easier to get started – put a beautiful high-quality sticker onto the brown plain bags you receive.
Now, let’s say you are based in the US or Europe, then you sell for example to:
Black owned businesses
Of course there are also other opportunities such as simply importing the Rwandan brand (although I have to be honest, that some of that branding may not meet the branding standards where you are based or it may simply not be right for your specific target market). We were also told that there are plenty of opportunities to invest in coffee washing stations working closely with the coffee farmers, to invest in packaging, and in particular also in printing, as Rwandan roasters all want their own designs and they like to make changes, but right now they do most of that with firms based as far as China and Taiwan.
TIP: Similar opportunities also exist in tea production, which is another main commodity in Rwanda. The country is looking for people who are interested in blending and packaging the tea and selling / exporting a ready product. Can you imagine, Rwanda has hardly any companies doing that?! Become a tea blender! (I have to confess that I love the thought of this, as I am a passionate tea drinker).
# 2 Rwanda needs 400,000 housing units! Products related to housing and real estate will sell!
Yes, the numbers have not changed since my last blog post Rwanda: 6 Mind-Boggling Opportunities You Must Not Miss. Rwanda still seeks to build 400,000 housing units in the next 5 years. 200,000 of those alone in the capital city of Kigali.
Now here it comes, if we do some basic maths this means the government is aiming to build 80,000 housing units per year, 40,000 in Kigali. Do you know how many they managed to build last year? Only two thousands!
So you can see that there is an absolute huge gap to come in! Only about 5% of the current demand is being met (the City of Kigali actually quoted 10%, but in any case it is incredibly low).
We have been told by the City of Kigali that the biggest opportunities are in affordable housing and residential housing for the middle class, while luxury housing is pretty much saturated. The latter point was confirmed to us by a couple of private developers.
But be aware: If you are interested to invest in Rwanda’s housing market then going middle class residential housing may be a better strategy for you, as you can make a healthy income by just getting started with 10 small houses or so, while any investment into affordable housing requires that you invest into a larger project with several hundred houses, as profit margins are low. Also, lower income classes are very much dependant on funding options by banks etc, and it will increase your level of risk as a single investor and simply makes the whole process more complex, which can come at a disadvantage for someone based outside of the country, I believe.
As a rule of thumb: With affordable housing the City of Kigali means 2-3 bedrooms, not more than 95 m² at not more than $300/m² in construction cost.
Now here is another crucial fact:
Rwanda imports so far almost all construction materials, except cement and some bricks which are available locally.
In short, most finished material is imported and there is space to get in there!
Let me give you some numbers here to back it up: Rwanda imports metal tiles for roofing alone worth US$30 Mio each year! Fancy a market share of that producing locally?!
If you have read last year’s blog post, which I wrote upon my return after introducing some Polish Investors to Rwanda, you may remember the amazing opportunities in brick manufacturing that I pointed out. I mentioned the two leading local brick manufacturers that are producing high-quality local bricks, but that constructors and developers had to queue for months to get the bricks because supply could simply not catch up with the high demand. I had a lot of requests for this opportunity following that article. We actually now met the CEO of one of the leading manufacturers and he said they had recently received investment and waiting times are much shorter now.
But: the demand for bricks remains and is growing. You will be very interested to hear that we were introduced to a major non-profit organization that supports you if you want to set up your own brick manufacturing plant – and they do it for free! You get help with all the market insights, the cost analysis, and even with finding the right location for your plot of land, as that needs to be allocated with specific characteristics. This means once more, you have amazing support that will allow you to start much faster.
In our discussions we were told that one could start a small scale, good quality, commercialized brick production plant with US$50,000. Re-invest any money you earn and scale production up from there. Be ensured you will sell your bricks considering the start of a building boom in Rwanda. Love it!
But, there are also related services such as property management and online real estate portals that are needed – another great opportunity to get into the market if you don’t have much capital at hand.
# 3 Silk, flowers, and going nuts – Think agricultural diversification !
Oh, this is another area I feel so passionate about and yes, having worked in rural development and agricultural production in the Horn of Africa since the late 1990ies this is where my heart still beats faster 🙂
First things first: Agri-business opportunities in Rwanda are vast and I won’t be able to share them all in the context of this post. I hence want to let you know that the Government is very keen to develop certain higher value crops for export. This is a very important strategy for the country, because frankly, Rwanda’s land size is pretty small and hence needs to be used efficiently.
Yes, Rwanda urgently needs to increase the production of poultry, fruits, vegetables, and fish (to name a few), and opportunities are vastly available in those areas. But today I want to make you aware of some ‘diverse crops’ the country is prioritizing and it is inviting investors – small and large – to invest into those areas.
Silk (sericulture) – flowers – and nuts for example. All for export.
Rwanda is one of the few countries that is trying to establish a vibrant silk production market in Africa. In a nutshell, silk is produced by silkworms who are feeding of mulberry tree leaves.
Many farmers in Rwanda have already abandoned their traditional crops, because they are making more money rearing silk worms and producing cocoons.
And here are some great news: The silk that has been produced in Rwanda has been rated as top quality globally by an international body….and it gets even better: The silk worms seem to love the local climate so much, that they deliver more production cycles than currently anywhere else in the world.
I think this is an amazingly intriguing opportunity, and as one of our participants was interested in this area we met with the MD of the Sericulture Center under the National Agricultural Export Development Board. Once more, we found, that this is a government stakeholder ready to support you throughout the entire process with a feasibility study and costing being made freely available to you, connecting you with farmers, and even providing the mulberry tree seedlings for free. We actually got some of the costing already!
Now, at the moment Korea seems to be the most ambitious buyer. Of course amounts produced are still very small and I would call them almost insignificant at this moment in time. But: Rwanda is definitely positioning itself successfully and with Ethiopia and Kenya being serious apparel production hot spots on the continent and Africa’s growing number of millionaires looking for fine products, I can also see a fast growing regional market in the next let’s say 5-10 years.
Ethiopia and Kenya are the leading markets in Africa for flower production and export. Most of Europe’s roses are now coming from these markets (think about that when you buy roses next time, they suddenly smell even better 🙂 ). Rwanda wants to follow that trend. The government is so serious about this goal that it has allocated so far 100 ha of land that will serve as a flower park in the country. Seriously, this is another straightforward opportunity where much of the leg work has been done for you allowing you to get started much faster. The land is available and allocated for flower production for export – and several airlines will connect Rwanda with Europe to export these flowers. You can also think about exporting to the USA under the African Growth Opportunity Act (AGOA), which allow tax free imports into the US. The Ministry of Agriculture in Rwanda is seeking interested investors. Would this be an opportunity for you?
Nuts who? I will make another confession. I eat a lot of nuts (cashews, almonds, and peanuts, or Brazil nuts) due to their great health benefits. In fact, we don’t do crisps or salty snacks at home – we regularly nibble nuts and my children love it….but: I have never heard of Macadamia nuts before our trip…(if you have neither, these are the big round, brown nuts in my picture above)
Well, now I have not only heard about them, but we actually met with the leading producer of Macadamia nuts in Rwanda. He is a local entrepreneur who brought the nuts into the country about 10 years ago believing in its potential. Not only did he have to wait 5 years for his trees to grow, but he also needed to do a lot of ‘awareness-growing’ among related stakeholders, because – hmm…..seriously, I won’t blame them – Rwanda’s people had never heard of these nuts before!
Now, speak about someone having a vision and going for it! I have to say I have huge respect for this entrepreneur and his patience and focus. Today, and also because of him, Macadamia nuts have become a crop under the agricultural diversification plans of the country with many farmers producing it. And I was just happy to hear that RwandAir is offering the company’s nuts as a snack during your flight.
So, you can sell the nuts raw, roasted, or you can make oil from it for the health and beauty industry. It also produces other by-products you can sell. But as we are talking about fast business opportunities why not consider to partner with an existing local company that has buyers already – Norelga Macadamia Ltd. is looking for investors and potential partners.
Here is a great recent article at Rwanda’s leading newspaper New Times about more insights into the Macadamia opportunities in Rwanda.
# 4 Become an events organizer – you can run the business from abroad most of the year!
This is another great opportunity for anyone in the Diaspora, because you can schedule your work around certain dates in the year and do much of the marketing online from abroad if you have to. I have actually been involved for a couple of years in events organization for Africa’s cement industry and we run most of that from the UK (with events taking place in South Africa and Kenya, so it is absolutely possible!). You can get this started successfully with minimal capital and make mainly use of your communication, marketing, or networking talents.
But first, let me tell you a little story (if you have time). It just makes me smile each time I think of it 🙂
We arrived in Rwanda at the official departure day following another historic African Union Summit (Yay to the first start of rolling out the African Union Passport!). Over 40 African presidents were leaving the country when we started our first day. Needless to say there was a little bit of chaos happening on the roads, which is a rather unusual sight in Kigali, all due to major security and roadblocks. If you have ever witnessed an African president driving through the city – you will know what I mean. But if you have 40 presidents and high-level diplomats making a move – well….you get the picture.
But because it was a Monday and Rwanda was trying to get back to business on the day of departure of those leaders, we actually had an appointment with the Minister of Agriculture that very day.
Yes, bad timing, I know, but we found that out only after being stuck in a road block after lunch heading for this very important high-profile meeting we had been eagerly awaiting.
And when I say stuck I mean S-T-U-C-K. I got off our minibus to ask the soldiers how long it would be – 10 mins…15 maybe? No, we would need to stay there and the road would not be cleared (our poor driver was actually sitting in that very road block for 4 hours!). So I got our group out and in front of the eyes of hundreds of stranded drivers our well-dressed group rushed across the roundabout wo we could try our luck somewhere on the other side. Well, traffic was still slowly moving over there through some awkward tiny side streets, but now we had another problem : we had no car! And there was no taxi in sight.
Well desperate as I was – of call it ambitious – I simply knocked at the window of a nice land cruiser that just pulled out of a parking space. I did not know the driver, but I know the exceptional readiness of Africans to attend the needs of guests when you ask – and his car looked like he had some space. So 10 seconds later half of our groups jumps into the land cruiser being well on its way to the Honourable Minister. (The owner of the land cruiser also happened to have built the Ministry as he is an architect and he owns a restaurant and nightclub, too – meaning we found ourselves having dinner with him a few days later. Networking African style). He saved the day.
Now, after the car left there were still four of us stranded.
Great, motor bikes were approaching us! Kigali has many of them, and now they came handy. But talk about obstacles when you need them the least being already late for a high-profile meeting. Two of us (well including myself) were wearing pretty tight business skirts and nope, we were not allowed to sit on the motor bike with both legs on one side – we had to sit properly, like the guys, this was written policy. Seriously, I have done many bike rides through Kigali in the past, but my skirt simply had not enough fabric to make it happen this time around.
So as I said call me desperate – or ambitious – I saw a shop, I dragged one of our other participant in with me as she was wearing a short skirt too. We bought two tracksuits, got changed in the shop, jumped on the motor bikes……and yes, we made it to the Ministry of Agriculture!
The dear Minister was waiting for us we were told (bless him, as we were now nearly one hour late). Yes, we were as good as ready to meet him, we told the lady, if she would just be kind enough to show us the bathroom, so we could take off our tracksuit trousers…
Well, this was the first impression on day one for our mission group and it got us into the mood of overcoming obstacles and being creative 😉
But back to the topic and opportunity for you. The reason I am mentioning the AU Summit is because Rwanda is fast establishing itself as a major hub in Africa for high-profile events and all sorts of conferences. The African Unit Summit, The World Economic Forum for Africa, and the UK’s renowned TGAIS gathering – all being hosted by Rwanda.
Rwanda has just finished its new Convention Center….and even when I left the airport after two weeks I saw once more some nicely set up white marquee tents at the airport arrivals area for some kind of agri-business conference. What the tents were for? Well, hosts are welcoming international conference participants at the airport, so they can get a shuttle and many other related services for the specific event they are planning to visit.
So in short, Rwanda is very keen to develop itself as a go-to-market for anything related to international conferences, events, and service provision. Kigali is safe, well-overlooked, the climate is mild – and yes, unless you have African presidents on the ground in big numbers you won’t get stuck in traffic, which makes it the perfect place for international event organization and management, I have to say.
Why not create an events management company or think about how else you can serve international conference participants?!
# 5 Why manufacturing the right fast moving consumer goods in Rwanda can be hugely lucrative for you
According to Ernst & Young, Fast Moving Consumer Goods such a manufactured food & drink products, clothing, or skin care products for example will be Africa’s fastest growing industry.
Further, Africa’s governments at large are keen to cut down on imports and increase local production, value addition through manufacturing, and export instead in order to balance out trade deficits.
This means that you will have overall an enabling macro market context to get into manufacturing.
Rwanda is planning to increase import taxes to make any product you produce in Rwanda more competitive.
So what is urgently needed in Rwanda?
Food & drink products
Beauty and skin care products
Small household appliances and electronics
Most of that is imported from Asia, Europe, and Kenya and the local manufacturing industry is really still in its infant shoes in most cases, which means it is a great time for you to get in, before competition increases.
But here is really what could make your manufacturing business so successful in Rwanda: Diverse market access and strategic geographic positioning.
The above items are not only in high demand in the local market, but they are also in demand in the wider region, in particular the East African Community and the Democratic Republic of Congo (DRC), which is a hugely populated and intriguing yet risky market that produces hardly anything itself.
In fact, trade with the DRC is so lucrative for some Rwandan traders that they do not sell the imported goods in Rwanda, but they sell it on to the DRC, because they can make more and faster money there.
We were lucky enough to visit the border with the DRC with our second mission group to see for ourselves: The dynamics at the border were highly encouraging and something rare to witness. Over 40,000 people from the area cross that border each day freely into both directions, mostly for trade, we were told by an immigration official who was kind enough to show us around and let us through the gate into no man’s land (buffer zone) just 5 metres from where the DRC starts.
We talked to local traders and received the most amazing insights. Traders in the DRC have a lot of money available to them, and although we hope it will change for the DRC in future, they need almost everything which means amazing opportunity for you!
The small border towns at the Rwandan side are absolutely safe, they are clean, and have even a number of bank branches and Forex bureaus set up. From this favourable position you can start trading your own manufactured goods (once you produce in bulk and your prices are competitive), but if you like a faster opportunity you can make contact with Rwandan traders and start selling someone else’s goods to the Democratic Republic of Congo right now.
I have to say, this trip to the border was one of the most exciting days for me personally during our two weeks stays, because I received first-hand insights into a world that was thus far fairly new to me.
All I can say is: extremely exciting times!
In closing I want to really confirm that the opportunities are literally sitting there waiting to be picked up by you. Africa needs you, but you may be amazed to learn how much you need Africa and how much it is able to give back, so you can create the life and business of your dreams.
Don’t delay your ambitions or your dream for more in life. The opportunities are yours to take and you will make a great impact towards Africa’s development in the process. What an amazing combination to have in life.
I hope I can inspire you – go and get’em today!
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Impressions from our business mission to Rwanda: