Speaking frankly and positively about the reality of doing business in Rwanda, David Bensusan, CEO of Minerals Supply Africa (MSA) discusses regional integration, the need for value addition to Rwanda’s raw mineral wealth, the high international interest rates holding back Africa’s progress, and the real potential Rwanda holds for investors.
Africa is becoming a growing investment destination for both advanced and emerging economies and is the youngest continent in the world. What makes Africa so attractive and what are the challenges this demographic boom presents?
It’s the population. Africa’s population speaks at least two languages, an incredible competitive advantage. The challenges must be tackled through education. Not everybody can become a scientist, but that is a positive thing, because there is a need to train artisans, farmers and so many more.
To attain a high level of industry production, there is a need to educate the middle class so that people are able to fulfill all types of jobs. We need industrial schools, not just universities. The point is to create educational opportunities for all social classes.
Now talking about Rwanda specifically, this country is 22 years old. When I came here 20 years ago, what you saw was a country that couldn’t afford photocopies and glass doors. Today, you have the most modern and adapted African country. The infrastructure has challenges, but it is there to do business. Internally, the government listens and supports the industry, enabling it to grow. The main challenge for Africa is to emancipate itself from foreign legislations. Outsiders write legislations that damage Africa. In today’s world, a world living on minus interest rates, how come Africa has to pay 18% interest in francs and a 6.5% in dollars? Who decides this? Africa needs independence.
The region is working hard to integrate and achieve a common market. What are the bottlenecks that still remain?
Once more, the answer is education. Education is the way; it is the first and the last issue that must be dealt with to get all African countries working. If we achieve this common market, it will be a major leap forward. This common market has incalculable opportunities.
Forget oil, in Africa all kinds of raw materials and renewable energies are there, waiting to be harvested. Africa can become self-sufficient. However, as President Kagame said, you cannot force countries to join, because not every state is working at the same speed. African nations that are willing to create this common market cannot wait for every individual country to be ready. Uganda and Rwanda are more advanced that their neighbors, but it doesn’t mean that they should wait to start the process. The EU didn’t start that way. Every country should be allowed to choose when to integrate this plan.
How will the megaprojects Rwanda is undertaking in energy and transport impact the mining sector?
Energy is our main problem. To process, you need affordable energy. In order to be competitive on the international stage, one cannot pay double the price for energy. We have the potential to answer the world’s demand for coltan, but currently we do not have the means to. Furthermore, we are exporting minerals, not the finished product. Finished products aren’t just a process-system; it is a tracking industry that is present in all activities, from racing-cars to computers. All the major companies in the world need coltan to manufacture their products. However, no one manufactures here. These enterprises take minerals from the country to process them abroad, while it could be done here, in East Africa! The EAC should be constructing its own cars and computers.
Apart from energy, what are the other challenges to establish such industries here in the region?
Cost of money; money starts everything. The cost of money in Africa is way above what it should be. If Africa is the new China, then how can it work when its interest rates are decided overseas? Rwanda is not a risky country. I have been here 20 years and I can proudly say that I am a happy investor. I live here, it is home to me. So, why are people scared? If due diligence is done properly, there is no reason to be scared of Africa’s potential and there is no reason to keep interest rates that high. How come Africa pays 18% when it is about 8% in the rest of the world? Who decides this nonsense? And until this issue is resolved, Africa will not move on. How can an SME develop when it is demanded to pay an 18% interest rate? It is a physical impossibility.
Going back to my industry, mining is a long-term investment. So for us, the main question is: do the banks have the money to uphold a long-term investment? The banks have a problem in deciding upon rates, and the latter blocks US and European investment from coming. Vision 2020 can only take off if money costs go down.
Dr Vincent Biruta, Rwanda’s Minister of Natural Resources, said, “The most exciting project currently happening in the Rwandan mining sector is the transformation of the industry from an artisanal-mining dominated industry to a well-planned professional and mechanized industry.” How is your assessment of Rwanda’s mining sector today?
It is beginning to do what the Ministry is saying, but it is not there yet. This industry needs finance, banks and entrepreneurs to supervise and invest. In the rest of the world, mining started with small people investing money. People then sold their mines to larger investors. The EAC has unparalleled resources to offer, however, this process hasn’t been happening in Rwanda nor in the region. Finance is needed.
Rwanda aimed for FDI in its mining sector to grow from around €130 million in 2012 to around €439 million in 2018, and for the mining industry to more than triple its GDP contribution to reach 5.3% over the same period. What is your opinion of the feasibility to achieve this?
It won’t happen. There was a point where such an objective was viable, but it won’t happen anymore. All the commodity countries in the world greatly suffered from the sector’s crash. Rwanda is a small country and East Africa is a small region, so they were by no means ready for this crash. However, I am confident that the sector will rise again, but to do so, it requires entrepreneurs to come in and invest; then the banks will follow.
Minerals Supply Africa Ltd (MSA) is a trading company established in 2008 dealing in procurement, processing and exporting of minerals. What drove you to come to Rwanda?
It was a South African company that brought me here, because of my experience in the minerals industry. What I saw was a country with great potential, a leadership willing to achieve its dreams and a population ready to work. Despite its horrendous past, what I saw was a country willing and able to reach towards greatness. The current leader is a dreamer, but he is a dreamer that enforces his dreams. The Kigali Convention Centre is an excellent example of this dedication to action. It took long to be built, but it eventually rose from the ground. In this country, things happen. Rwanda is a modern-day miracle; there is no other description for it.
As a businessman, how would you describe today’s dialogue between the government and the private sector?
The relationship with the government is made of ups and downs. There are disputes between us because I don’t agree with everything they do and they don’t agree with everything I do. However, we talk. They listen, and they are willing to learn. If I make a mistake I listen and vice-versa. The public sector in Rwanda does not mind admitting an error. Tell me one country in the world where I can see the President or the Minister by simply making an appointment? Tell me where else am I able to sit down with a high-ranking government official to directly discuss an issue? It doesn’t exist outside Rwanda.
Once a year, the President has a meeting with all industries and he allows for direct questions to be asked. There is a total transparency, and despite what people say, Rwanda is an example of a total democracy. I can talk to a Minister and I can say no and disagree! You learn by disagreement and you improve by debating.
How important is it for Rwanda to develop training in health and safety, environment-friendly and sound mining operations?
Rwanda is very good at ensuring high working standards. Mines have been closed down for not adjusting themselves to such standards. Rwanda is well aware of the environment.
What are your main CSR programs?
CSR activities are a necessity for all companies operating in Rwanda. We build genocide housing, we contribute to the President’s health care system, and many more. We believe in building a greater Rwanda. To be honest with you, I personally feel Rwandese. I feel very connected to the country
You were named Rwanda’s Best Exporter And Trader Of Minerals In The Year 2014. What were the main strategic pillars to achieve this recognition and how are you working nowadays to continue to stand out?
Pre-financing of the mines. Helping miners develop their mines without owning them was the key. Miners signed exclusive supply contracts with us, and we paid a fair price for it. I have been in the business 43 years, and despite the current crash, I am convinced that our political line will become fruitful again.
What opportunities would you highlight to attract international investors to Rwanda?
Rwanda has an amazing population. People here are multi-taskers and bilingual! The population is also trustworthy and ethical. I can say with absolute certainty that I have never paid a bribe in this country. That comes down from the President. H.E. Paul Kagame punished those who accepted unethical behavior.
What is the message you would like to convey to our international audience?
As a Rwandese, I want to say: “Come and invest in Rwanda.” If you want to see Africa rise, come and invest. Don’t believe the stories you hear, because the reality is different.
Source: The Worldfolio