Tuesday, Oct 24, 2017
Conglomerate | Africa | Rwanda

Crystal Ventures Ltd

Competition brings innovation


1 year ago

James Gatera, CEO of Crystal Ventures Ltd
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James Gatera

CEO of Crystal Ventures Ltd

According to James Gatera, CEO of one of Rwanda's leading private sector companies, Crystal Ventures Ltd, “There are opportunities for everyone here, huge opportunities.” His company’s motto – Create Wealth, Improve Lives – has spurred business investments that have had a significant impact on Rwanda’s socioeconomic landscape and created opportunities in unexplored sectors with high returns. He discusses the country’s private sector potential with The Worldfolio.

 

How would you assess the work done by Rwanda regarding building its institutions and what challenges still lie ahead?

The work done has been tremendous; institutions have effectively been put in place. In terms of governance Rwanda has strong leadership. In terms of trade, the business reports rate us very highly. There is a zero-tolerance policy towards corruption. People come to this country because we have created a positive environment. Whether it is for touristic reasons or business purposes, we have created a safe and secure nation. People’s lives and investments are protected. Rwandans and their government are always open to discuss our legal framework and contracts.

 

The private sector has already advanced significantly in terms of regional integration, however when it comes to the public sector/politicians, it seems that there are still bottlenecks to move in the integration direction. How wide is the window to make this happen?

East Africa as a whole has taken a serious note about this issue. We have addressed it by implementing laws allowing free movement of labor, goods and services. Now, over nine trade barriers have been removed and we have formed a coalition between the three countries of Uganda, Kenya and Rwanda. We are engaged together in the Northern Corridor project and our presidents meet every two months to discuss achievements and challenges. These monthly assemblies are the proof that we are committed to fastening our speed of execution. A number of texts have been implemented in East Africa and the results will come soon.

East Africa has taken note of what has been happening and has started pushing for policies to transform what wasn’t right. Developments can already be seen, such as the railway from Mombasa. Goods can now move faster from Mombasa to Kigali, and this is just an example of the number of positive solutions that are being enforced.

 

Rwanda is one of the fastest growing economies in Africa, with 7% average growth this decade, mainly driven by the public sector. There is a clear directive of the government to push for more private investment in the real economy. Is the private sector ready to take the lead?

I am not so sure that the growth has been led by the public sector. Our private sector has also been growing, as you can see from the growth numbers of the service offers. The banking sector has also been growing impressively, attracting many investors. The banking assets to GDP has also grown.

The public sector is an enabler of private sector growth, but you cannot attribute it to the public sector alone. What is happening in Rwanda is that the public office has created an enabling environment for the private sector to thrive. A hand-in-hand collaboration between the government and private companies is where the growth comes from. When there are issues, the government is open to discussion, but you cannot solely attribute it to the public sector.

 

The 2016/2017 National Budget observes a trend to increase self-reliance and less donor dependence in funding it, and focuses on Made-in-Rwanda products. As a champion of the private sector, which sectors do you see have the best potential for investment?

Any sector is interesting, be it infrastructure, banking or services, there is huge room for development. However, it is true that we need a rapid evolution in energy production. Energy has the highest potential as it is the least developed. From aviation to fuel, passing by electricity, there are opportunities. Our financial sector, educational institutions, real estate companies, etc. are growing tremendously and with this growth comes the need for more. This creates opportunities.

 

As Rwanda is one of the most open economies in the continent, how do you see competition with potential foreign investors?

There is always a debate about competition. Big companies coming from outside have the muscles to over compete in our industries. This is not only a Rwandan discussion; it is a continental one. However, there is always a way to find an effective manner to re-direct operations. There are huge projects, infrastructure in particular, where Rwandans alone cannot achieve everything. So this brings about collaboration. There is always a way of re-directing investments to where local people lack in financial solutions. It is also a benefit for foreign companies to acquire ground knowledge through partnerships. There are opportunities for everyone here, huge opportunities. We welcome investors and labor.

 

Do you believe in the benefits of competition?

Competition is good. Competition brings innovation. It is pointless to have companies that are sole performers. What we look for is companies that are committed to creativity and innovation. That is how we got where we are. We do not fear competition, we embrace it.

 

When you look at the collapse of West African economies, what lessons have been learned from those cases and how can you ensure that Rwanda’s economic growth is sustainable?

The reason why they collapsed is because of commodity prices. As oil producing countries, they greatly suffered from the decline related to the petroleum industry. These collapses won’t last forever, the oil prices will rebound. What you should learn though, is that this fall can be avoided by diversifying. Instead of relying on one product, they should have invested the fortune they acquired from oil into other sectors. They are strong economies so I am sure they will survive. The prices will rebound.

 

In the midst of a complex global economic scenario, i.e. slowdown of Europe, China and emerging markets, along with depressed commodity prices, diverging monetary policies and depreciation of emerging currencies… what is your vision regarding the economic outlook for Rwanda?

Rwanda has done various things to make sure we can resolve our problems on our own. That is why we are ensuring deep national and regional integration. We want to attain a bigger market and to have a stronger voice on the global stage. We have built innovative infrastructure to attract investors, and again if you look at what Rwanda does from a continental point of view, we are the ambassadors of peace. That is why we send soldiers to troubled places. We want a voice on the world stage and we want to make a difference on the world stage. We are always at the forefront to open trade. We make room for everyone who wishes to grow.

We therefore actively participate in these international initiatives. Our president is even chairing worldwide IT conventions to reduce unbalance and to enforce IT solutions for poorer countries. But then again, if you look at what is happening in the world, in Russia, in Colombia and elsewhere, some of the issues are political. So there is nothing that Rwanda can do about foreign politics.

However, if you know what you want, if you enforce a strong and committed vision, you always achieve it. Rwanda is lucky to have this type of leadership. Our direction is clear.

 

Rwanda has already gone through a round of privatizations, yet there are still blue chip assets owned by the government that can play an important role in financing development plans. Do you foresee a new round of privatizations?

The government privatizing certain of their assets is a good thing. Quite frankly though, the success of this measure varies from company to company. Some organizations have not performed better than they used to when they were public. Bear in mind that even in your own countries there are still some government-owned enterprises. Even in purely market-oriented countries, governments own companies. So the solution is to discuss which industries would benefit from privatization. Schools, hospitals and even electric power should remain public. Certain industries must remain public.

 

Rwanda lags behind in terms of American investment in comparison to regional neighbors. Why are US companies moderately attracted to Rwanda?

In the US and in Rwanda, we are both in business. I am sure that if the US wanted their private sector people to come, they would know what to do and how to do it. Whatever has been discussed must therefore still be on the time. In Africa, we want to solve our problems first. If US businessmen want to invest in Rwanda, they will find that we have reduced obstacles. But, even if we delete legislative barriers, we cannot force a man’s will. However, there are US investors taking interest in our country. At the end of the day, it is our role as Rwandans to make things possible for ourselves.

 

You were appointed as CEO of Crystal Ventures in February this year. What objectives have you marked for your term as CEO?

You always start from where you found the institution. My job is to build from what I was left with. We have always wanted to go to sectors where we see opportunities, in sectors where people are scared to invest because of high risk or a limited amount of short-term return. Those are the areas we like to invest in.

 

Which lessons have you learnt at Bank of Kigali that you would like to emulate in Crystal Ventures?

So many things. First of all, I learnt that when people are ready, when they are truly committed to a plan and a vision, they will be successful. Second of all, I learnt that no one can achieve alone. I learnt the importance of having a strong team to work with. All stakeholders have to be onboard, from customers to top managers. At CVL that is what we are going to do: a clear strategy that everyone must embrace and a mindfulness of all stakeholders. 



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