Monday, December 9, 2013

Starting from Scratch: Ease of Business in Rwanda

By: Sandhya Kambhampati
Produced & Edited by: Holly Moody
 At 6 a.m., Alissa Ruxin is in the kitchen, sending her kids off to school and beginning her workday by checking her sales and expenses.

 She is the owner of Heaven Restaurant, which serves international cuisine with organic Rwandan ingredients. After managing 70 employees in Rwanda, she came back to the United States to have her first child. She then convinced her cousin and her husband to come to Kigali to start a restaurant in 2006. Today, Heaven employs 25 Rwandans.

Employees of Heaven Restaurant in Kigali. (Provided)
            “Registering a company in Rwanda was really easy -- we registered and were legal in two days,” Ruxin said. “We have experienced ups and downs as any restaurant anywhere in the world does, but we are doing better than ever – now rated the number one restaurant in Kigali on TripAdvisor, running a new onsite three-room boutique guest house, and expanding our work to provide short course trainings in hospitality to Rwanda.”

            Ruxin, a native San Franciscan, decided to start the restaurant because of President Kagame’s Vision 2020 plan, where tourism is a key focus. Heaven hires many interns and works to train them so they can obtain a job after graduation. One day, Ruxin would like to start the International Hospitality Academy of Rwanda, which will offer practical training.

            Office Manager, Caleb Igianeza, said he likes his job with Heaven because he learns a new thing every day in customer service. Igianeza dreams of the restaurant expanding into an internationally recognized five star hotel someday.

            “Heaven has played a big development role in society in which I’m part of, by supporting local artisans, cooperatives, and producing expertise in Rwanda by being a role model to businessmen and young entrepreneurs,” Igianeza said.

            Mugabo John, Head of Service at Heaven, said his favorite part of his job is that he gets the opportunity to interact with customers from all over the world. Having this job has also changed his life for the better.         
            “It has given me hope and courage to develop myself and my family,” John said.
            Ruxin said the restaurant serves tourists, business travelers, local expats, and the professional Rwandan community, who often try their signature dish, grilled filet of beef with cassava leaf chimichurri. In her mind, Heaven is more than just a restaurant, but a social enterprise that offers international cuisine and beautiful views.

 Rwanda: A Destination for Businesses

 Similar to Ruxin, people from Europe, China and the United States are investing in Rwanda. Rwanda was recently named the 32nd in the World in terms of ease of business and the third in Africa, according to the World Bank’s annual ranking, Doing Business Report for 2014. The ranking is based on 189 economies and records all procedures which are required officially for an entrepreneur to formally operate an industrial or commercial business, along with the time and costs to complete these procedures.

 Rwanda is the best East African country to invest in according to the 2014 Doing Business Report. (
            “This recent ranking and achievement make us proud, however this previous attainment should be a sigh of relief for us to work harder to create an environment free of any obstacles that would deter businesses/investments to operate in a free market condition,” said Mark Nkurunziza, Chief Financial Officer (CFO) of the Rwandan Development Board (RDB).

 “The government of Rwanda has focused on providing support to ensure that small businesses/large investments register and operate without any impediments that may sabotage their operations.”

            Entrepreneurs can register a company in six hours. Nkurunziza said the service sector is at the center of driving economic growth. Currently, the service sector contributes 45% to the national GDP, according to the RDB.

            Ambassador Valentine Rugwabiza, Chief Executive Officer (CEO) of the RDB, said this ranking is a sign of the country’s commitment to achieving its economic goals and the consistency in its vision of economic development.

            “We benchmark ourselves on international best performers and the best practices on each indicator, we know who is doing better, what is being done better and then we adapt what is suitable and realistic for our economy,” she said. “We then outline target points for achievement. The certainty is that effective reformers are pragmatic, driven by results and accountable. We start small and leverage on ‘demonstrable effects’ and understand that reform process does not end.”

             Rugwabiza said the Rwandan people realize the importance of business, so it is not just people from other countries that are investing in Rwanda. She believes the country received this ranking because of the stable and secure environment and robust governance that is committed to promote the private sector.

How Rwanda Stacks Up Compared to Others

           Rwandan resident, Ben Rutten, who is originally from the Netherlands, said what they see as medium enterprises in his home country would be seen as big enterprises in Rwanda.

            “Sometimes companies are started by people who can invest, but do not have the knowledge how to manage a company,” Rutten said. “There is almost no division of responsibility, the management (CEO) takes almost all decisions at almost every level. In general, I can say there is a huge lack of skilled craftsmen in almost all sectors.”

            Rutten now lives with his wife in Rwanda and said that since it is a country with a “wonderful” climate, it may give one the impression that they are on vacation every day. Currently, he works for a Dutch consultancy firm, Alliance Plus, in Kigali where he brings Rwandan businesses in contact with Dutch entrepreneurs and subsidies.

            One of the major challenges in his mind with starting a business in Rwanda is not having a network or contacts in the country. The RDB said they are working on helping entrepreneurs deal with these challenges.

            “We look to develop more automated systems for greater efficiency and effectiveness,” Nkurunziza said, adding that Rwanda can address the issue of the skills gap by investing more in vocational training institutions that can help train the youth to focus on creating their own jobs rather than relying on the government for jobs.

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