Laterite web 11

Challenge

Challenge
  • Two of the key challenges that Rwanda’s economy shares with many other countries in the region are: (i) a low industrialization rate (industry and manufacturing account for only a small proportion of GDP); and (ii) a high trade imbalance, with few large exporters.
     
  • To better understand the industrial landscape of emerging markets in Africa, and the underlying reasons why manufacturing and agribusiness firms struggle to export and to attain scale, the Brookings Institute, together with the World Institute for Development Economics Research (UNU-WIDER) and the International Growth Center, started a research program called “Learning to Compete”.
     
  • One of the main focus areas of this research program was to understand the industrial sector of countries not just through the lens of aggregate figures, but through the lens of the individual story and capabilities of major firms in each country.
     
  • Rwanda was selected as one of the case studies, and Laterite was selected to write a book on Rwanda’s manufacturing and agribusiness sectors, in close collaboration with the Ministry of Commerce and Industry and the International Growth Center

Innovation

Innovation
  • This book - based on detailed interviews with the CEOs of Rwanda’s 50 largest industrial firms, data from the Rwanda Revenue Authority and historic documents - provides the first- ever comprehensive overview of firms in the country’s agribusiness and manufacturing sectors.
     
  • It puts these sectors into context historically, explaining how decisions and initiatives going back to the 1930s have contributed to determining the shape and composition of agribusiness and manufacturing in Rwanda today.
     
  • The book also profiled the 50 largest firms and key sectors of the Rwandan economy, including coffee, tea, staple crops, horticulture, and specialty plants, dairy and beverages, construction materials and other light manufacturing.
     
  • The key to our approach was to understandapproach adopted was one of understanding the core competencies of these firms, which involved understanding the complexity of their products and how these products came to be, what their corporate systems (strategic management, product development, available technology, sourcing and distribution chains, etc) and how they have evolved;, what are their resources and how they have used them; and finally, what are their main exports and how they evolved into exporters given the historical and economic environment in the country

Outcome

Outcome
  • Completed in 2012, this enterprise mapping exercise continues to be a reference book for anybody whothat wants to understand Rwanda’s manufacturing and agribusiness sectors, be it scholars or policymakerspolicy makers.
     
  • It provided key input for policy makers preparing Rwanda’s Economic Development and Poverty Reduction Strategy for the next 5 years, a large part of which focused on Economic Transformation.
     
  • It also highlighted the importance of understanding the unique story of Rwanda’s largest companies and the historical context in which they emerged, an approach we hope will serve as an example for future research into the development of firms.