Rwanda’s Technology Market

Despite differing opinions on the technology and investment opportunity, a well-developed technology market supported by well-organized and regulated institutions in terms of rules, social values, laws, financial, and political norms, as well as domestic resources mobilized through strengthened formal and informal sectors can lead to economic growth and prosperity of a country (Muchai & Kimuyu, 2017). The study concludes with suggestions for investors on how Rwanda's technological advancement can foster economic growth and prosperity, facilitate easy access to the nation's technology market, and help draw foreign direct investment, which has been the crucial missing piece and driving force behind the East African nation's economic enablers (Walabyeki, 2017). To fully unlock Rwanda’s technology market, benchmarking needs to be done and lessons learnt from best comparable practices globally. Rwanda has become Sub Saharan Africa’s leading nation in the use of technology with innovation projects that are attracting technology firms from all over the globe (Ige, 2017). Among them is positive BGH, a South American technology firm that has since introduced the first Rwandan-made laptops.

Rwanda has a strong anti-corruption drive with an average economic growth rate of 8% per annum. Its foreign investment has increased by over 100% since 2009.T

Background

This research’s main aim is to assess the state and functioning of Rwandan technology market, identify the extent to which the technological development can contribute to the country’s economic developments as envisaged in Rwandan vision 2020 to transform the sector, and develop the technology sector and open opportunities to local and international investors.

To achieve this research’s objective, the population in this research consisted of the 50 beneficiary investors from different institutions and the research was conducted on both exploratory and descriptive designs. Data was collected by the means of questionnaires and interviews from respondents to add to the data collected from questionnaires. The respondents were acquired through stratified random sampling technique.

The primary and secondary data was considered with the use of triangulation approach that encompassed quantitative and qualitative tools to explore and present data and the emerging variables relationships studied. The review, description and analysis of existing empirical studies were the base on which the results were arrived at.

Methodology

The data was collected by gathering information from selected respondents from different managerial levels as the target population. It consisted of 50 respondents from different technology firms located around Kigali city.

The primary data sources included observations, interviews and focus group discussions. Open-ended self-administered questionnaires with open ended and closed question and focused group interviews with technical and operation staff who understand the concepts of technology market were used. Interview guides were also used to get information from the selected respondents since key informants were busy and had limited time and freedom to respond to the questionnaires.

Most of the respondents were senior technology managers, middle managers, analysts and investors with 3-10 year experience in the industry and education levels ranging from secondary to post graduate education levels.

The secondary data sources included reviewing different published materials in libraries, textbooks, the ministry of science and technology reports and many other sources. Focused group discussions involved face-to-face conversations with analysts and ministry officials.

Data analysis involved editing, summarization and classification of data for easy understanding. It was done in line with study objectives and conceptual framework.

Incentives to enter Rwandan Technology Market

Rwanda offers a wide range of opportunities to investors in ICT. It has 10.5 Million people market size, it’s a member of the East African Community which offers 141 million people market size and COMESA’s 340 million people( Mwangi, Zondervan & Bascaran, 2017). Being the fastest in ICT growth, there opportunities for investment in the sector (Laskar & Anuradha, 2017).

The Rwandan government continues to invest in ICT infrastructure development. It has laid 5, 000 km optic fiber throughout the country, a Hi-tech Air Traffic Navigation System has also been set up boosted with cutting edge broadcasting infrastructure, PPP between the Rwanda and Korea Telecom, High speed 4GLTE Wireless Broadband and Tier 3 state-of-the-art internet data centre ( Mukerezi, Oparinde& Birol, 2017).

Major potential competitors in the ICT sector today include Econet, Korea Telecom, MTN, TIGO and Econet. Cellular phone subscriber number is at 73% in 2016. Rwanda’s ICT sector is rapidly growing and expanding and Rwandan technology companies are now exporting to Democratic Republic of Congo and Burundi and ICT skill development is prioritized by the Government.

There are a wide range of unexplored opportunities in Rwanda’s ICT sector in areas of Electronic device manufacturing plants, E- waste management and applications development (Behuria, 2017).

On top of that, Rwanda has designed Special Economic Zone to address constraints including availability of investment land, energy cost, bureaucracy, limited transport, market access and availability of skills (Knutsson, 2017).Special Economic Zone accommodates investments from ICT, logistics, commercial whole sellers, large scale industrial plants, warehousing, and other sectors.

Quantitative analysis of Rwanda’s Technology Market

Rwanda offers a big opportunity for investment in Technology as tabulated below.

Market size (Population and number of people connected to the internet)

Region

Population

Number of competitors

Rwanda

11 Million

11( 4 million Customers)

East African Communities

141 Million

53 (52 Million)

COMESA

340 Million

193 (153.5 Million)

Average Competition Prices

Region

Av. Prices

Rwanda

US$2500(Rwf 200,000)

EAC

US $1000

COMESA

US $ 1000

ARTS and Positivo-BHG Product Comparison

Specification

ARTS

Positivo-BHG

Notebook

GT80S Titan SLI 18.4in Core i7

BGH Z110

graphics

NVIDIA GeForce GTX980M

CPU

Intel i7 6920HQ

Intel® Celeron®,

memory

32GB DDR4

drive

Super Raid 4 512GB solid state

hard drive

1TB

display

18.4in Full HD anti-glare

Operating system

Windows 10, Blu-ray writer

LAN

Killer Gigabit

Audio

Dynaudio 7.1

Bluetooth

4.2

HDMI

1x

Rwanda leads in Africa in the ease of doing business and continues to attract foreign investment. Her foreign direct investment has increased by over 100% since 2009.

Year

Foreign Direct Investment

2009

USD 118.67 Million

2014

USD 267.70 Million

PESTEL Analysis of Rwanda

PESTEL analysis looks at political, economic, social, technological, environmental and legal aspects of the country determining the acceptability of the market. Market Research Reports (2017) presents the PESTEL components for Rwanda with some insights as follows;

Political Environment

Democracy has persisted making the country a darling for international investors. Rwanda has no political uncertainties especially after elections as the government is stable.

Parliamentary system that offers good legislations favoring investments.

President: Paul Kagame, appoints the prime minister, the government has been stable and thus there can be more investment opportunities

There are no political unrests or any politically-driven mechanisms to derail investment activities thus attracting more investors.

Human rights activists praise the Rwandese government for its progress through making judicial system to be independent, thus no misuse of prosecutorial power making the political environment conducive.

Economic Environment

Capitalism, it favors investments.

Agriculture is the main sector with subsistence agriculture in tea and coffee being the main cash crops. Subsistence farming offers the investors chances to have wide varied of selection of the markets to buy their goods from.

Tourism is also favorable, making it a major foreign-exchange earner. Investors in technology can also focus on the aspect of tourism to cash in more revenues

The industries in Rwanda are contributing over 14.3% of the GDP as of 2014. Investors can this focus on the manufactured goods and technology to improve their business capitalization.

The government has also focused on economic reforms from 2015 with a strong performing Rwandese Franc. There are also strong institutions that aim at creating strong unity and a thriving business environment.

Social Environment

Local language: Kinyarwanda

Official language: French

The government has also prioritized social funding and distribution of water and donor funding. The supply of safe water enhances social well-being of the people making the environment conducive for technological investments. The country’s climate is also good with agricultural communities. The welcoming Rwandese also offer investment charms as they welcome foreigners and residents alike to invest in the country.

Technological Environment

60% of population connected to Electricity

All primary schools children have Government-provided laptops.

Environment

Rugged terrain, mountainous. This disrupts investments in infrastructure making the technology-related investments hard to install

57% of the country covered with trees and thus having adequate wood resources for any tool or equipment that would be able to support technological investments.

Houses the Great Lakes, making the country to have adequate water supply

Legal

The president appoints judges

Independent judiciary

5 forces analysis

Power of suppliers

Suppliers are empowered and the country can have strong framework for suppliers of technology-related products

Power of customers

The country has over 11 million people providing strong base for customers. The customers are also empowered and they know their rights.

Threats of substitutes

There are potential threats in having substitutes where many technological products related to computer technology products.

Potential of new entrants into the industry

Due to relative freedom of the entry and exit in the Rwandese markets, potential companies can establish their operations in Rwanda. Local companies have also established technological companies thus offering some competition to the technological establishments.

Competition

Competition is fair with several market players. There is no company with monopoly of market.

Conclusion and Recommendations

Rwanda’s technology market has enormous opportunities for investors in technology due to the tremendous efforts and support the government accords the industry and the many untapped areas in technology in the country. There is also a vacuum in local made technology products in the wider east African community trade and COMESA trade blocks due to absence of manufacturers of technology products despite the large population that’s increasingly becoming techno-savvy. It’s that ARTS enters the market to tap into the opportunities.

However, for ARTS to entre and dominate the market in the country that is hugely investing in technology to the achievement of vision 2020 as steps to move on from the memories of the 1994 genocide (Taylor, 2016), it should;

Reconsider its prices which are above the regions’.

Base its operations in Rwanda and focus on the untapped Multi-billion East African and COMESA market.

Extend its operations to untapped mobile manufacturing in the region.

References

Behuria, P., 2017. The political economy of import substitution in the 21st century: the challenge of recapturing the domestic market in Rwanda.

Laskar, S.K. and Anuradha, N., 2017. Substantive Incubation for Growth and its ICT Impact on MSME. International Business Management, 11(1), pp.232-236.

Market Research Reports, 2017. Rwanda. Retrieved from http://www.marketresearchreports.com/countries/rwanda

Muchai, D.N. and Kimuyu, P., 2017. Prospects for information and communications technology enabled services in Kenya: The case of the mobile money transfer industry (No. 086). World Institute for Development Economic Research (UNU-WIDER).

Murekezi, A., Oparinde, A. and Birol, E., 2017. Consumer market segments for biofortified iron beans in Rwanda: Evidence from a hedonic testing study. Food Policy, 66, pp.35-49.

Mwangi, N., Zondervan, M. and Bascaran, C., 2017. Analysis of an international collaboration for capacity building of human resources for eye care: case study of the college-college VISION 2020 LINK. Human Resources for Health, 15(1), p.22.

Ige, O., 2017. ICT And the Challenges of Recession. Printed by, p.201.

Knutsson, A., 2017. Institutional Barriers for FDI in Rwanda´ s Power Sector.

Taylor, C.C., 2016. Sacrifice as terror: the Rwandan genocide of 1994 (p. 101). Oxford: Berg.

Walabyeki, J., 2017. Corporate Governance in Rwanda: Opportunities and Challenges.