Rwanda seeks food security

By Egon Cossou
Editor, Africa Business Report, BBC World, Kigali

Dairy at Masaka Farms
Image caption,
Demand for dairy produce such as yoghurt or cheese is rising as incomes grow

Masaka Farms in the Rwandan capital Kigali is something of a rarity.

On the edge of the six-acre farm there is a dairy plant that receives the supply of milk from its herd.

Masaka Farms is one of the few companies making dairy products. The business is in its infancy and the brain child of budding entrepreneur Serge Ndekwe.

Mr Ndekwe spotted a gap in the market - and it seems to be paying off.

As the country's economy takes off, so too does demand for yoghurt, cheese - in fact all kinds of dairy produce.

So after 18 months of operation, the company has just started making a profit.

Loan guarantee scheme

Rwanda prides itself on its business friendly climate.

You can set up a company in one day - at least in terms of paperwork. But for many budding entrepreneurs, access to capital can still be a problem.

Banks require a guarantee before they grant loans, Mr Ndekwe points out, and many people starting out are unable to provide one.

So Mr Ndekwe would like the government to think about starting a loan guarantee scheme for new businesses.

Tough repayments

But even if a startup is lucky enough to get a loan - repayment terms can be strict. Mr Ndekwe borrowed $100,000 to start Maska Farms.

Serge points out that banks require a guarantee before they grant loans - and that many people starting out can't provide one. So he wants the government to think about starting a loan guarantee scheme for new businesses.

But even if a startup is lucky enough to get a loan - repayment terms can be strict. Serge borrowed $100,000 to start Masaka Farms.

"I have had to pay it back in three years," he says.

"When you start a business like this and pay it back in three years it's hard. But we don't have too much choice. We are lucky to have the loan."

Information society

The government says its constantly looking at ways of improving things for people such as Mr Ndekwe.

Improving access to capital is a particular priority, but its also busy trying to boost the free flow of information.

It is doing that by putting special emphasis on making new technology available to ordinary people.

This could benefit local entrepreneurs too.

Many businesses here are based on farming and they are thirsty for up-to-date agricultural prices, but getting hold of them can be a problem because of poor communications infrastructure.

Transparent market

In Musaka market, one of the biggest in Rwanda, an electronic pricing system has changed the way traders operate.

The hot, bustling market, which is about an hour's drive outside the capital, attracts traders from all over the country who come here to sell agricultural produce.

Some of them are using the e-Soko scheme - whereby traders use their mobile phones to access a computer server giving live updates on agricultiural prices anywhere in the country.

"I'm now better able to anticipate the profits I'm going to make," says local trader Donata Mukampazimpaka.

"I know the best places to get goods at the cheapest price - and I come here and sell at a bigger margin".

International ambitions

It may work for Ms Mukampazimpaka, but take-up has been low.

Despite this, the government is planning to expand the scheme

"The next phase is to move across borders using the internet," says Arthur Byabagambi from e-Rwanda, the body behind the project.

"Farmers are going to be able to get in touch with foreign traders using telecentres," he says.

"They'll be able to post what they're selling and foreign buyers can come here and purchase what's being sold in our local markets.

National impact

Back in Kigali, dairy producer Serge is making plans for the future.

He intends to open an organic restaurant on his farm.

But as he continues try to press ahead with his ambitions for his company, it is clear the fate of his business and thousands of others like it will shape the fate of this nation's economy.