“Welcome to the pride of every farmer in this province,” said Angelique Karekezi during my first trip to Rwanda in 2005. She was 25 at the time, and I recall my visit as if it were yesterday. We had traveled on back roads all morning, finally winding up at a coffee washing station owned and operated by Koakaka Cooperative, a farmer business that Angelique managed.
“This building has become a meeting and healing place for our members,” said Angelique as we toured the village-based processing plant that had been inaugurated in the wake of the war-torn 1990s. She presented the cooperative’s latest harvest figures to a room full of Hutu and Tutsi farmers, former enemies who, despite their past, had come together to earn income through enterprise.
As one of the world’s fastest-growing economies, Rwanda has demonstrated the powerful role of entrepreneurship in reconstruction and reconciliation. The country’s annual GDP growth has averaged 8 percent over the past several years, and the percentage of people living in poverty has declined significantly. Within the next five years, Rwanda aims to become what it describes as a “knowledge-based, service-oriented economy with middle-income country status.”
It is an ambitious goal. Despite its success, Rwanda remains a low-income, agriculture-based economy. Away from Kigali’s perfectly paved boulevards and towering office buildings, extreme poverty remains a reality in the rural villages that dot the country’s steep hillsides. An estimated 75 percent of Rwanda’s 12 million people live in rural areas, and a majority of them are subsistence farmers. These hardworking men and women cultivate small plots of land to meet their own food needs and, when possible, sell surpluses to earn income. For them and for their country, most opportunities for a better future originate in the soil.
In 2005, when we expanded our business from Latin America to sub-Saharan Africa, we started our journey in these same Rwandan hillside communities. A decade later, Root Capital is among the top agricultural lenders in the country. From this unique vantage point, we have observed Rwanda’s economic growth and development through the lens of rural business leaders and entrepreneurial farmers.
Take a closer look at coffee, for example. In the aftermath of the 1994 genocide, devastated communities in Rwanda’s coffee-growing regions struggled to rebuild. Before 2000, Rwanda exported virtually no fully washed Arabica coffee, which earns a premium in the global market. For decades, the country’s roughly 400,000 small-scale coffee farmers produced rather unremarkable commodity-grade coffee. They lacked the proper infrastructure to wash and process raw coffee beans, and were trapped in a vicious cycle of low quality and low prices.
Knowing that it couldn’t compete on volume due to the dominance of coffee-producing juggernauts like Brazil and Colombia, Rwanda chose instead to focus on quality. With increased donor and private-sector support and a wave economic liberalization, the country started its drive to become one of the world’s leading producers of specialty coffee.
Last year, Rwanda exported roughly 12,000 metric tons of Arabica coffee. These high-quality, award-winning beans, once unknown, are now enjoyed in cafés around the world, including a Rwandan-owned specialty coffee shop just up the street from my home in Cambridge, Massachusetts.
Angelique Karekezi has contributed to that progress as much as anyone in the country. She now serves as the managing director of the Rwanda Smallholder Specialty Coffee Company (Rwashoscco), a federation of six farmer cooperatives, including Koakaka. Last month I traveled to Rwanda to meet with a half dozen of the agricultural businesses that Root Capital finances and 10 years of investing in the country. While I was there, I had a chance to catch up with Angelique,now 35 and a working mom with four children. She still has the same charming gap between her front teeth and the bubbly laugh that makes her a disarming negotiator and belies the challenges she has endured.
“That was a dark period in my life,” said Angelique, reflecting on the late 1990s. She was in high school when the 1994 genocide began, but returned to school as soon as she could to study commerce and accounting. Within a year of graduating, Angelique became the manager of Koakaka. She later moved on to advise 16 coffee cooperatives across Rwanda on issues of management and governance. In 2008, she joined Rwashoscco and worked for six years as their chief accountant, finally becoming managing director last year.
“Cooperatives had a lot of bumps and bruises in the beginning,” said Angelique, who partially attributed these challenges to outside support from international donors and NGOs. While donor helped rebuild the Rwandan coffee sector following the genocide, some of it also undermined enterprise discipline, according to Angelique. Much of that funding has now dried up — a good thing, in her eyes — and cooperatives have since adopted a more rigorous approach. “Many of us studied business,” said Angelique, who is now also earning her Master’s degree in economics at the University of Kigali. “We changed and adapted to this new environment where we must be aggressive, know our customers, align interests and compete in the market.”
Last year, Rwashoscco exported 32 containers of coffee on behalf of its member organizations, and Angelique now manages 15 people. She’s sought after for her knowledge and experience, having received a delegation of coffee entrepreneurs from Ethiopia just days before I arrived.
The transformation of Rwanda’s coffee sector occurred relatively quickly.Behind all the business plans and balance sheets are incredible people, like Angelique, whose inspiring stories of hard work and determination I’ve witnessed. This is the kind of entrepreneurship that transforms post-conflict economies and helps to unite previously divided nations. To me, this is the story of Rwanda, and it’s one that economic indicators and development statistics cannot convey.
As my plane ascended out of Kigali International Airport, I looked out the window across Lake Kivu to the mountainous peaks of neighboring Democratic Republic of Congo (DRC). It is a country that has endured similar struggles but stands in stark contrast to the Rwanda of today. Yet given the transformative effect that entrepreneurship can have on post-conflict recovery and poverty alleviation, I suspect that I’ll soon meet leaders just like Angelique on the hillsides of DRC.