The big picture: Rwanda-Burundi relations are at an all time low. Uganda’s Museveni has lent his parental hand to try to fix the tensions; two civilians in Rwanda have reportedly been killed by attacks from Congo. Kenya has hit a roadblock amid economic distress in face of rising debt.
The still growing central banks in the region and foreign aid most can’t come to the rescue
Eastern Africa banks have recently been marked by growing strength in depth. Banque of Kigali secured 15th position in East Africa Business Magazine survey last year with core capital of $28 m; and despite almost doubling the value of its capital base in this year’s table to $54 m, Rwanda’s biggest bank now ranks just 20th. Ethiopia’s Dashen Bank needed $82m to take 15th place for 2011.
Unsurprisingly, Kenya has the most banks in our table; its six entrants demonstrate that the country has one of the most competitive banking sectors on the African continent.
The point is these banks are still very small in capital.
The economy in the region isn’t imminently coming to a recession, but the fragile nature of security in the region is always a cause for concern. Good decision and policy making has seen consistent economic growths with Tanzania and Rwanda at the helm of it all. Security and stability are needed to maintain the great momentum.
Are you an engineer? Are you a great thinker? Well, your time has arrived. The Defense Department wants to know if you have an idea on how to make flying aircraft carrier. If you didn’t know, competitions are known to inspire great humankind’s achievements. A US based non-profit organization Prize X believed in that, and it has inspired several industries. Its $10 million prize has inspired airspace of hundreds of billions of dollars. This time around, the Defense Advanced Research Products Agency has a request out for ideas on how to develop an airborne platform that could both launch and recover other aircraft.
But before you start looking for schematics of the Starship Enterprise (NCC-1701) or Battlestar Galactica, or how you might levitate the USS Nimitz, think a little smaller, like B-1, B-52 or C-130.
DARPA wants ideas on how to turn those aircraft currently in the Pentagon inventory into platforms that could carry Unmanned Aerial Systems, what most folks call drones, close to their targets. The drones could then go about their business — bombing, missile strikes, reconnaissance, etc. — then fly back to the mother ship and head for home.
This plan could add to the range of the drones and open up new missions they cannot now undertake because of their limited range, DARPA says.
As you consider your ideas, DARPA says you have to keep the cost low and they’d like something they could demonstrate within four years. And don’t get long-winded. Your proposal should fit on eight, standard 8.5- x 11-inch pages in 11-point type.
And if you’re worried your big plans will fall into the hands of your competitors, don’t. DARPA promises all ideas will stay inside the Pentagon.
THE VISIT to one of the smallest nations in the heart of Africa dusts off an old bromide: Rwanda has a great future–and always will. This lash, green, county-size country seemingly made enormous strides after going through a disastrous political dégringolade that led to Genocide in 1994, and all the crisis to follow in the aftermath. Inflation was halted, and antibusiness regulations were eased. Combined with the global trade boom of the last decade, these measures sent Rwanda’s economy roaring ahead, and the country’s GDP exponentially climbing over the last few decades. It looks as though Rwanda has made the leap to developing status and is, in terms of the size of its economy growth, ready to surge past neighboring countries as Burundi and DRC. It is been proved that Rwanda is showing positive signs of competing in the global market.
Source: World Bank
As I have recently spoken in an assay about Foreign aid to Africa, nations that change their mentality of waiting for aid, but focus on growing markets and trade eventually start to grow their economies. Rwanda is now the most competitive place to do business in East Africa and 3rd in Africa. Rwanda is now politically stable with well-functioning institutions, rule of law and zero tolerance for corruption. It has an 8% average year-on-year GDP growth, stable inflation and exchange rate. These impressive achievements by Rwanda are driven by a clear vision for growth through private investment set out by President Kagame. He has held incentive meetings around the world calling for investments in Rwanda, and he’s adopted a culture of cutting foreign aids little by little with a goal of making Rwanda self-sufficient.
President Kagame, assumed office on 24 March 2000, largely prevailed compared to other candidates to win a second term. The big question was whether he’d turn away from the statist policies that have long plagued and crippled Rwanda’s economy or place his country firmly on the road to the perdition of likes of Burundi and DRC, where stagnation, shrinking political freedom, populist demagoguery and corruption were the norm.
If some wants Rwanda to become a global economic powerhouse rather than an oversize backwater, that person is Paul Kagame. When you online to the World Bank’s annual study and ranking of 189 economies, Doing Business, which measures “the regulations that enhance business activity and those that constrain it.” Rwanda rates excellently, with an overall ranking of 3rd on the African continent. Four categories stand out in which Rwanda wins.
– Starting a business.
Starting a business has never been simpler or faster. To register a local enterprise or a foreign subsidiary, the Rwandan Development Board (RDB) provides a quick and efficient registration service allowing to have a business incorporated within 6 hours. The process involves simultaneously obtaining the certificate of incorporation (business registration), Tax Identification Number (tax registration) and the Social Security registration for employee pension submission.
– Dealing with construction permits.
Thanks to Kigali’s new online Construction Permit Management Information System (MIS)—implemented with the support of the World Bank Group’s Rwanda Investment Climate Program in partnership with Investment Climate Facility for Africa. The technology makes acquisition of construction permits faster, simpler, and easier by automating the procedures for application processing and review. In addition, it improves the management information provided to the Kigali’s construction one stop center and Department of Urban Planning.
– Registering property.
– Paying taxes.
Of course, one should mention the socio-economic changes that are apparent due to the acculturation. The globalization of our planet has seen Rwandan kids going to schools abroad and for instance the Huffington post recently said, “Rwanda Could Be The Next Silicon Valley: But it Needs Youth to Help it Get There”. There’s power in youth of Rwanda. Tech Startups, nonprofit foundations and nationwide economic projects are being risen by the Rwandan Youth.
As a young entrepreneur, I have always been interested in sports franchises, and I have always considered owning a soccer club franchise in the near future. Thus I have learned that this is a huge responsibility. Not only you are a leader of a very complex form of business, but also you are responsible for the happiness and/or misery of the community. Therefore I have realized that a typical sport franchise should be located in an urban area. It also should strongly reflect the culture of the community, and its profits and activities should contribute integrally to the economic and social development of the community.
Humans’ brain is wired in mysterious ways. The Amygdala, along with the Hippocampus, the Septal Nuclei and the Thalamus, plays a part in the emotions of love and affection. In similar fashion like a boy falls in love with a girl, people have developed affection and love towards the world of sports over time. Thus sports teams owe to the fans loyalty, respect and a return on their civic investment. When a sport franchise is very successful, it becomes not only a lucrative source of income for the owner, but also a source of joy for the supporters and the community. People become highly associated with the team, and that means emotions: good and bad, go with that. Fans will sometimes commit suicide because their team has lost a game.
European soccer teams used to look forward to playing Chelsea F.C, and more often beat them, but that was long before Roman Abrahimovic’s empire swept into West London and altered the premier league landscape. When Roman bought Chelsea F.C, success has been the anthem since. Domestically and internationally, Chelsea have won four 14 cups in five different competitions. These drastic changes have been built by Roman’s philosophy. Apart from investing billions of pounds in Chelsea, he has also crafted fundamental ideals that have changed Chelsea from an underdog team to a successful sport franchise it is today. He has rebuilt Chelsea based on the rich culture of west London. He has started the Chelsea foundation which brought together the Football in the Community and the Education department along with the club’s other charitable and community activities, including environment and anti-discrimination projects. And last but not least, he has emphasized a physical presence of Chelsea in London by ordering that all the offices, and Chelsea’s activities be based in London.
The economic justification of the prices paid for professional sports franchises—based on traditional pricing metrics, such as price/earnings multiples—is often difficult because many sports franchises do not generate positive accounting earnings. Yet, when it is well managed, a sport franchise can be an improbable economic powerhouse. Big clubs around the world report profits in millions of dollars each year. These magnanimous profits should be used to produce some forms of return on a massive civic investment. As a result, fans should benefit from the exponential growth of the franchise’s revenues. For example, fans should be allowed to buy cut-price tickets.
It is commonly admitted that some people will instead suggest that a soccer franchise be built in the rural area because the land is cheaper, but this is for a short term purpose. For visionaries, a soccer franchise that operates in big cities is more successful. This has a direct correlation between the income of supporters, the number of supporters and the spending ability of the fans. In fact, fans in urban area have generally higher income than the fans in rural settings. They are more committed to the teams, and in most cases they will choose to watch and support their team as a pastime. Thus, they will use their money to support the team. One should also mention that big cities are richer; therefore, they have more money available to fund private franchises.
In late 1886, a gaggle of workers from the Woolwich Arsenal Armament Factory decided to form a football team. They called themselves Dial Square as a reference to the sundial atop the entrance to the factory. The name Dial Square was later changed to Arsenal to reflect the Woolwich Arsenal Armament Factory. Until today, Arsenal football club has always used an image of an arsenal as their logo. This is not just a particularity of Arsenal; every successful soccer franchise should reflect the rich history of the club and of the community that surrounds it. Successful soccer teams should build a rich heritage and record of innovation in the community. The likes of Arsenal, Real Madrid, and other big soccer franchises have a rich culture build over time. This culture ensures immortality of the club, and it induces the exponential growth of the franchise over time.
My dream of owning a soccer franchise is shared by a bigger group of young entrepreneurs. While pondering ideas with my fellow future engineers, and entrepreneurs, it has been apparent to me that basic entrepreneurial practices of innovation, transparency and good management of business associates are known by most of us. The ideal soccer franchise should be bound by practices of innovation, good managerial practices, hard work… But it should retain the previously discussed points. When found in an urban area, when it reflects the culture of the community and when it returns to the community its civic investment, success is inevitable.
Before I moved to the United States, I had a chance of visiting Biryogo, the largest slam in Rwanda. This suburb of Kigali, the capital of Rwanda, is home to approximately two hundred thousand people, who eke out a living in an area of about two square kilometers (roughly the size of Portland’s Old Port.) The idea of slum conjures up an image of children playing amidst piles of garbage and of cow’s manure, with no running water; it also jogs one’s mind of mothers with desperation on their faces, and of babies crying of hunger. Biryogo doesn’t disappoint.
What disappoint the most is that the world still underestimates the scale of African governments’ corruption and of the ineffectiveness of foreign aid to Africa. The insidious aid culture has left African countries more laden with debt, more inflation-prone, more vulnerable to the vagaries of the currency markets and more unattractive to higher quality investment.
African leaders live off theft of state funds, especially of those in forms of foreign aid. Instead of using aid to build infrastructures, to invest in education, and to open new markets for small and medium size enterprises, African leaders instead use that money to live a luxurious life. One watchdog group estimated that former Zairean President Mobutu Sese Seko took billions from the country. President Mobutu is an example of many African leaders, who were motivated by the knowledge that seizing the seat of power would gain them virtually unfettered access to the package of aid. Unsurprisingly, Africa remains the most unstable continent in the world. Future generations are always victim of odious debt, whereby unjust debt is incurred as rich countries loan dictators or other corrupt leaders when it is known that the money will be wasted. South Africa, for example, shortly after freedom from Apartheid had to pay debts incurred by the apartheid regime. In effect, South Africans are paying for their own oppression. It is understood that African countries still pay close to $20 billion in debt per annum, a stark reminder that aid is not free.
Despite this constant flow of aid towards Africa, things have always been going from bad to worse; not only have many African countries been plunged into egregious debt, but also into other economic fallouts such as inflation. For example, during the height of inflation from 2008 to 2009, it was difficult to measure Zimbabwe’s hyperinflation because the government of Zimbabwe stopped filing official inflation statistics. However, Zimbabwe’s peak month of inflation was estimated at 79.6 billion percent in mid-November 2008. This inflation is another disputable, but well documented fact that foreign aid has made Africa more vulnerable to the vagaries of the currency markets and more unattractive to higher quality investment. Instead of buying food from farmers within the continent, and to distribute that food to the local citizens, each year millions of dollars are used to buy American grown food, which puts local farmers out of business. When you look on a bigger picture, large inflows of money can kill off country’s export sector, by driving up home prices and thus making their goods too expensive for export. Aid has the same effect. Large dollar aid causes the domestic currency to strengthen against foreign currencies. This is catastrophic for jobs in the poor country where people’s livelihoods depend on being relatively competitive in the global market.
Speaking of the competition in the global market, it has always been highlighted that nations that change their mentality of waiting for aid, but focus on growing markets and trade eventually start to grow their economies. Let me proudly state that Rwanda, my birth country, is now the most competitive place to do business in East Africa and 3rd in Africa (WEF-Global Competitiveness Index Report 2013-2014 page 3). Rwanda is now politically stable with well-functioning institutions, rule of law and zero tolerance for corruption. It has an 8% average year-on-year GDP growth, stable inflation and exchange rate. These impressive achievements by Rwanda are driven by a clear vision for growth through private investment set out by President Kagame. He has held incentive meetings around the world calling for investments in Rwanda, and he’s adopted a culture of cutting foreign aids little by little with a goal of making Rwanda self-sufficient.
Few will deny that it is imperative to step in with charity-based aid when necessary, such as during the aftermath of Genocide in Rwanda. Nevertheless, it is commonly admitted that aid is an unmitigated political, economic and humanitarian disaster. Unbelievably, over the past sixty years, at least one trillion US dollars of development related aid has been transferred from rich countries to Africa. Yet real per capita income today is lower than it was in the 1970s, and more than fifty percent of the population lives on less than a dollar a day. The good news is that we know what works and what doesn’t. We know that economies that rely on open-ended commitments of aid almost universally fail, and those that don’t depend on aid succeed. The latter is true for economically successful countries such as China and India, and even closer to home, in South Africa and in Botswana. Their strategy of development finance emphasizes the important role of entrepreneurship and markets. Thomas Sankara, former “Burkinabe” president, once said, “Aid to Burkina Faso must serve to strengthen not to undermine our sovereignty. It should help to destroy the need for further aid. All aid that puts further aid to death is welcome in Burkina Faso. But all aid that creates a beggar mentality, we will have to do without.”