Kenya’s Eurobond, Rwanda’s ‘Enthusiasm’ Seen as Big Investment Opportunities

Security Concerns Remain

The World Bank recently lowered its forecasts for Kenya’s growth to 4.7% from 5.2%. That’s still impressive compared to much of the developed world, but there’s no doubt that security is a huge issue. Some governments have issued travel advisories for Kenya and earlier this year, the U.S. embassy in Nairobi repatriated some of its staff members as it beefed up security against the threat of attacks by Islamist militants.

There’s little doubt that the terrorist acts that have occurred in Kenya are having an impact on the economy, particularly on tourism, which makes up about 14% of Kenya’s GDP, Thoms said.

Nevertheless, “day to day life goes on there despite the security threats,” he said, and other industries such as manufacturing, financial services and telecommunications are now gaining importance. With greater investment, these will become even more important, he said, and perhaps even supercede tourism one day.

Determination of Rwandan People

Twenty years ago while on his African odyssey, Thoms was all set to visit the gorillas of Rwanda made famous by naturalist Dian Fossey. But just as he was getting ready to travel there from Kenya, the civil war erupted. He hasn’t yet seen the gorillas, but Thoms is highly impressed with everything else he saw on his recent visit to the Rwandan capital, Kigali.

“This is a very young nation and there’s a new generation of Rwandans who are determined to make something of their country,” he said. “There’s a huge level of enthusiasm for the future of Rwanda, and though it still faces a lot of difficulties – not least a dicey Western border and the fact that it’s a landlocked nation – I believe Rwanda has great potential.”

Between 2001 and 2012, Rwanda’s economy grew at a rapid pace of more than 8%, and poverty significantly reduced. Rwanda has not been able to rely on commodities like other African countries to drive growth, but it has been making a name for itself in other ways, notably in information technology.

All these factors helped Rwanda sell its $400 million Eurobond with speed and ease in 2013. Proceeds from the bond were used to fund large-scale projects including the country’s national carrier, RwandAir, and a large hydropower plant. Rwanda’s goal is to become a business friendly country, Thoms said, and the government has been making great strides in ensuring that happens in order to continue attracting much-needed foreign investment.