Ip & Trademark
Content
Hiring employees
‘Rwanda is a small but growing market, with a population of 12.3 million people and a Gross Domestic Product (GDP, Current) of $9.5 billion, according to the World Bank. Rwanda enjoys strong economic growth, averaging over seven per cent GDP growth annually over the last two decades. The Rwandan economy grew more than nine per cent in 2019 thanks to strong growth in industry, construction, services and agriculture.
Leading sectors include energy, agriculture, trade and hospitality, and financial services. Rwanda’s economy is overwhelmingly rural and heavily dependent on agriculture. Strong growth in the services sector, particularly construction and tourism, has contributed to overall economic growth in recent years.'(International Trade Administration, 2020)
We encourage you to review the International Trade Administration’s report which gives a really good overview of the Rwandan market, including challenges and opportunities. Additionally, there are plenty of summaries and market reports on the topic for the prospective entrepreneur or investor to draw valuable information.
However, in this section of the Business Starter Pack, we wished to share local insights sourced from the real-life experiences — and representing the personal views — of ex-pat entrepreneurs operating on the ground for multiple years.
Competing with the non-profit sector
There is a large non-profit sector in Rwanda. The primary reason is that non-profits that are active in the East African region prefer to have their head-offies in Kigali, which is overall safer and more politically stable than many other African capital cities. This high concentration, however, causes distortions in the market because of the comparatively higher prices that these non-profits are willing to pay for various local services e.g. catering, recruitment, etc.
Most importantly, non-profits distort (and occasionally destroy) the market when they try, in parallel with the private sector, to answer various market needs (e.g. access to finance). This causes them to be in direct competition with private-sector organisations and start-ups trying to address the same market needs. Of course, these NGOs and non-profits benefit from external funds (often foreign-sourced) and can offer the same services at much lower prices than the business requiring profit margins. Over the years, this has caused numerous local companies to run out of business.
See the detailed procedure, cost, and required documentation outlined here
Working with the public sector
Rwanda is characterised by fairly “open” and enabling institutions. In comparison to most European countries, you can expect institutions (e.g. Ministries, Educational, and Healthcare) to be more approachable and institutional staff overall more accessible.
Furthermore, in a climate that is very welcoming of foreigners’ contribution to the economic development, the simple fact of being an ex-pat can sometimes make it easier to gain people’s trust both when working with the public and private sector.
Rwanda as pilot-market
Rwanda’s enabling and approachable institutions can offer the advantages of a regulatory sandbox from which private organisations (especially start-ups) can greatly benefit, particularly during the product (or service) development phases.
Another advantage for the private sector is the far lower levels of corruption alongside the superior infrastructure which can be expected in Rwanda in comparison to its neighbours (Kenya, Uganda, Tanzania).
Finally, Rwanda is also a great starting point due to the sheer size of the local market and low levels of competition. In comparison to its neighbouring countries, Rwanda has a smaller, less developed market. In some circumstances this grants start-ups extra breathing room to make mistakes or even pivot.
OX Rwanda is a great example of a company which has greatly benefited from Rwanda’s enabling institutions.
Similarly, BAG Innovation and Sandberg ltd. have benefited from the low local competition to find and strengthen their niche.
The Rwandese snack opportunity
In 2015 Hollanda Fairfoods (Winnaz crisps) became the first company to introduce potato crisps in Rwanda. At the time, snacks were not really a thing among Rwandese and, though potatoes were certainly a big part of the local diet, crisps were far from an acquired taste to the Rwandese population.
Since 2015 things have changed a lot and the market demand for snacks (and even healthy snacks) is ripe with opportunities to delight Rwandese people’s taste buds.