VZCZCXYZ0005
RR RUEHWEB

DE RUEHLGB #1192 3481201
ZNR UUUUU ZZH
R 141201Z DEC 06
FM AMEMBASSY KIGALI
TO SECSTATE WASHDC 3564

UNCLAS KIGALI 001192 
 
SIPDIS 
 
DEPARTMENT FOR AF/C 
DEPT OF COMMERCE WASHDC 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON EAID BTIO EINV EINT XA RW
SUBJECT: Land of a thousand hills is not always a land of a thousand 
opportunities 
 
 
¶1. SUMMARY.  Moses Turyazooka is one of the approximately 500,000 
Rwandan refugees who grew up in Uganda and returned to Rwanda after 
the 1994 genocide.  He is a well-educated and driven entrepreneur 
who was raised on diaspora ideology - a deep love for the country of 
Rwanda and a strong desire to return home and build the nation. 
Although he is frustrated by the challenges of doing business in the 
developing private sector of Rwanda, he nurtures his small business 
and hopes for a recovered economy and a more secure business 
environment. END SUMMARY. 
 
¶2. Moses Turyazooka worked for the US Census Bureau, the World Bank, 
and the Rwandan Ministries of Finance and Commerce before embarking 
upon Rocket 2020.  As he sees it, Rwanda is ripe with untapped 
business opportunities.  The biggest obstacle Moses found, which is 
consistently reiterated by businessmen in Rwanda, is access to 
affordable capital.  Even though Moses had well-paying jobs, 
sizeable bank accounts, and property, the local banks only offer 
5-year loans at an 18% interest rate.  Microfinance institutions in 
Rwanda typically do not lend beyond USD 2000, which is not 
sufficient for capital intensive businesses such as a factory or 
even a restaurant.  The loans offered by microfinance institutions 
enable farmers to procure seeds and parents to meet school fees, but 
they do not enable the development of a vibrant private sector.  As 
Moses explains, most emerging businesses would be able to manage a 
bank loan of 10%-12%, but the existing 18% is a true barrier to 
market entry. 
 
¶3. Fortunately, Moses was able to present his business plan for 
Rocket 2020 to a group of American investors, Thousand Hills Venture 
Fund (THVF).  THVF was formed in 2004, and focused exclusively on 
investment opportunities in Rwanda.  THVF infused USD 400,000 into 
Rocket 2020 in exchange for a 96% equity share of the company. 
Rocket 2020 also pays a USD 800 monthly management fee to THVF. 
While Moses might appear to be little more than an employee of his 
own company, it was his only option launching his business.  TVHF 
will receive the lion share of any financial success of Rocket 2020, 
but their participation ensures that this business and these 
services are launched in Rwanda. 
 
¶4. Rocket 2020 operates telecenters around Rwanda, offering 
communications and computer services in rural communities.  Five 
telecenters are currently operational with 14 employees.  Receipts 
will fund the establishment of another 24 telecenters over the next 
24 months.  Rocket 2020 is currently negotiating with various 
government ministries to become a portal for the government to 
distribute information, including results from the National Exam. 
However, Rocket 2020's goal is to expand beyond delivering services 
through their centers.  Eventually, it would like to become a full 
eCommerce provider, building a warehouse in Kigali and enabling 
customers to use the telecenters to order goods that would not 
normally be available in the rural areas.  Essentially, Rocket 2020 
will provide the services of a Kinkos and an Amazon.com. 
 
¶5. While relatively unique in his education and access to foreign 
capital, Moses faces challenges that are representative of the 
entire private sector in Rwanda.  Currently, the biggest challenge 
to Rocket 2020 is the availability of power.  Electricity forms a 
significant portion of the business' operational costs and 
inconsistent and unreliable power threatens the very communication 
services that Rocket 2020 offers.  The business is essentially shut 
down with every power outage, which Moses explains happens up to 
several hours each day. 
 
¶6. As Rocket 2020 expands to becoming a central vehicle to 
distribute goods to the rural areas, its ability to quickly and 
easily import goods from abroad becomes essential.  Unfortunately, 
the current customs procedures are complicated and time-consuming, 
as his goods sit in the customs warehouse for up to four weeks. 
While Moses commends the Rwandan government for its anti-corruption 
efforts, especially in official tenders, he is frustrated by the 
fact that those who are willing to help customs officials with 
anything from a drink to their children's school fees get their 
goods cleared faster and with less hassle. 
 
¶7. In the end, Moses recognizes that his business prospects are 
better in Uganda, or elsewhere in the region.  He complains about 
the troublesome access to capital, poor infrastructure, and petty 
corruption in customs offices.  His business partner, THVF, has 
invested less than 50% of its raised capital because the cost of 
electricity, transport, and customs frustrations make it difficult 
to find a viable business which will earn a competitive rate of 
return (septel).  While the GOR pursues a rigorous economic reform 
agenda, small businessmen struggle day to day.  Business decisions 
are made based on the bottom line, and Moses' idealism will not last 
forever. 
 
ARIETTI