We are back from amazing Rwanda, where I lead my 4th Business Mission Group to explore profitable business opportunities in the country.
I think one of the biggest challenge for our group – who all attended with clear industry interests – was that they were suddenly exposed to so many opportunities that it was difficult to focus on the venture they actually wanted to pursue.
Well, dear Africa Business Jumpstarters, this is what you get with Africa!
You see, once you step into the business space, opportunities will come your way right left and center and your first hurdle will be to choose ONE opportunity and business model and then solely focus on that.
Many people have noticed that I focus a lot on Rwanda as an ideal market to get started in Africa. This is neither a coincidence nor because I had any connections there when I started out for the first time. It was a very strategic decision at my part to introduce Rwanda as a key market to the African Diaspora at large – and here is why:
Why Rwanda is a gem for first time starters in the African Diaspora
- Anyone can easily get a visa into Rwanda, and from January 2018 any citizen in this world can get a visa on arrival at the airport in Kigali. It takes 5 mins and around US$30 to get this done.
- You can register your business in less than 24 hours – online! You do not even need to be in Rwanda to register your business, you could simply do so while still in the US. And just 24 Hours later…you are good to go and do business and earn money in Rwanda. This is not a joke at all, I had five of my clients go through the process in the last couple of years.
- Once you have registered your business, a residence permit then takes about 3 days. DONE.
- You can own land in Rwanda, even as a non-national. You can either buy it from a private owner or lease it. This is huge for the African Diaspora.
- 100% of your shares and profits belong to you if you wish to be the sole owner of your company. You do not need to share it with a local partner as is the law in so many other African countries. And you can take your money out of the country any time – yep, in US Dollars. Another important fact that cannot be taken for granted on the continent.
These are just some of the amazing enabling policies. You won't even get most of such straight forward benefits in the West, and most certainly not in Africa! What we do need to remember is that the African Diaspora is very multifaceted.
While many of us can simply do business 'at home', for example in Nigeria, Ghana, or Kenya – we need to recognize that a large part of African Diaspora consists of people who cannot do business in their own African home countries because of war or other high risk, or simply because the country is run down economically and doing business there does not make much sense. We also need to recognize that some in the African Diaspora, do not even have a 'home country' anymore of which they are a citizen of. This is for example the case for African Americans who have a growing interest to invest in Africa.
This means that many of us will need to do business in African countries of which we are not nationals. But the hurdle for taking such a step is often huge, as the regulations are more often than not strict and not very enabling.
In fact, in many cases that even applies to nationals and non-nationals alike.
You cannot start a business without putting half a million Dollar forward to get a licence (although some priority industries are exempt form that in certain countries).
A licence may take weeks or months – in some cases even years. Or there is a periodical shortage of US Dollars and your account gets frozen.
This can make the business journey difficult from the get go for someone who has never done business in Africa before, or who simply does not have thousands and thousands of Dollars to be allowed to operate.
This makes a strong case for Rwanda…
….For the African Diaspora, first-time starters, and any successful business people who are operating in high-risk markets and who are keen to diversify operations and cut down risk.
This is precisely why I will continue to promote the small country to you. Having said that, I hope that many more African countries will follow that example, so we can attract more business & investment across the continent.
Now, let's dive into the opportunities. First, here is a chance to read my business mission post of last year: Rwanda – 5 Business Opportunities You Can Start Fast
I will present a couple of the opportunities again here, simply because they are so good, and add a few new ones.
So let's get started!
1. Rwanda needs 30,000 Housing Units Each Year in Kigali alone!
So, I have the updated numbers from the Rwandan development Board and not much has changed since our last visit. Kigali alone needs 30,000 housing units a year, but the current turnaround is just under 2,000 houses. What a huge gap for you to come in!
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% last year, but in any case it is incredibly low).
And some updates this year: There is a new 'Affordable Housing Fund' into which you can tap in for financing options, as the government is so keen to provide incentives for interested investors.
We have been told by the City of Kigali last year 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.
Tiles ===> Clay is available locally
Glass ===> Sand is available locally for production
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?!
We were this year also made aware of the fact that here was a demand for furniture, and again, the wood was available locally.
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.
2. Start luxury tours – make money and travel!
We met with the owner of a luxury travel tour company at the new Marriot Hotel. She is a member of the African Diaspora herself who has returned from the UK to Rwanda about 6-7 years ago to open her luxury tour travel company.
This made sense: Rwanda is now actually very keen to position itself as a high-end tourism market. 'Similar like Singapore', someone told me.
Rwanda does not only attract in this regards with amazing lakes, villages, landscapes and ecological parks (where you can visit the gorillas in the wild for example), but its cities are also extremely clean, orderly, and safe with no traffic jams. And world-class hotels such as the Marriott or Radisson have just opened their doors.
All these are characteristics that will go down well among high-end tourists and will make it easier for your to promote Rwanda in new markets.
One aspect you should not leave out is that Rwanda has positioned itself as a major conference and convention hub in Africa.
In fact, we have been told it was the second country in Sub-Saharan Africa after South Africa to attract the largest numbers of conference participants (and the 3rd for the entire continent as Morocco followed SA)!
That's amazing! Especially when you consider how small the country is.
This means that 'conference tourism' is a new priority for Rwanda, and right now there is a lot of space for you to come in!
Tours & travel is a great income generator, too. Let's say you price your tour on the ground at $3,000 for one week and you get 10 people into your tour. That's $30,000! Now imagine you do a tour only every other month – that's still US$180,000 per year!
It's a wonderful business model, for the African Diaspora and Jumpstarters on the continent alike and it can be scaled and grown easily.
Watch my You video here where I share more insights.
3. Export agri-business products – It's one of the smartest business models!
One of the key priorities for Rwanda is EXPORTS.
In fact, getting into exports means that you are really supporting national development, while building a profitable business, that can be managed from abroad. It's perfect for the African Diaspora, because while you export African products your main clientele will be based in the US, UK, Dubai or where ever you are based.
Here is the latest video I did on export opportunities in Rwanda.
So, 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
There is also the option to white label your product. This means that the producers are packaging it for you into a plain bag and you can have your own sticky label on it with your very own brand.
This is a more advanced option as it means you will need to invest some money to purchase coffee bags in advance before you sell them.
In both cases however, I highly recommend that you do not sell to individuals (that's a lot of hassle), but to companies such as hotels, restaurants, coffee shops etc. Once you win one client – not only will they make a big order at once (making you a great profit!), but they will order again and again bringing in great revenue to your business.
That's the way to go!
4. Provide professional Training to companies who need you and will pay!
One business model that I always promote to the African Diaspora and that is high in demand across the continent is professional training for companies.
No not every industry will pay for that in Africa, but some most certainly do.
Especially the banking and the hospitality industry are in need of such trainings. These industries will happily pay for it, as they heavily depend on such training to remain competitive.
From customer service training, ICT and cyber security training, to communication training, team building and increased management efficiency at the work place – there is a space for you to come in as a trainer building a successful venture that is highly flexible.
5. Go into African conference production or related services – it's booming!
As I have mentioned above, Rwanda is establishing itself as a serious conference and convention hub in Africa.
You will feel that as soon as you step off the plane, as – to the surprise of many – conference delegates are being generally welcomed at the airport by special assistants as soon as they step into the country!
In my view this is just one sign as to how serious Rwanda takes this positioning as a conference hub in Africa.
So, you could produce your very own conferences, or provide related logistics and services!
Frankly, I asked key players in the tourism and ICT industry if enough conferences where taking place for these industries and the answer was a clear 'No. – We would need it.'
While you run your conferences in safe, clean, and no-traffic Kigali, you could still take on a regional East African theme or even run an African conference inviting delegates from across the continent as well as the rest of the world.
Money would be made from tickets sales and sponsorship, but the most empowering part of running African conferences is that the most powerful players of one industry will meet under 'your roof' and that means simply access to many amazing business contacts and opportunities that you would otherwise not have access to.
It's a great strategy!
There are so many other opportunities in Rwanda around agri-business, manufacturing, ICT, investments etc…. But let me stop here 🙂
I hope you have enjoyed reading the post and that you have been inspired to start your own African business or expand an existing venture.
We will be visiting Rwanda and also Ghana again for our Africa Business & Investment Missions 2018. We invite you to join us.
Let's march together towards success in Africa!
Dear Africa Business Jumpstarters – As always, it would be wonderful to receive your questions, feedback, and ideas in the comment section below!
Join us live at our Africa Business BootCamp in New York City and London UK in 2018