THE WAR WAS STILL RAGING IN RWANDA when Praveen Moman, a Punjabi entrepreneur, came looking to start a tourism business in the late 1990s. Driving over hills ringing with the sounds of gunshots, the budding entrepreneur carried a seemingly absurd hope of building a luxury lodge among the green volcanoes of northwestern Rwanda, where clients could visit the mountain gorilla, itself a victim of the ongoing violence.
Moman arrived in the region with ambition and audacity. “I was aware of the menace,” he told me. “I wanted to do something big.”
Moman was ahead of his time, and strikingly so. Fifteen years ago, Africa, and particularly its troubled centre, was seen almost exclusively as an exotic high-risk investment destination for the brave and adventurous, for those with privileged connections to Africa’s dictatorships and large pools of capital to risk. Most investors had all but forsaken central Africa after Rwanda’s 1994 genocide killed more than 800,000 people in three months. The aftermath of the genocide tore the region apart. The Rwandan conflict spilled over into neighbouring Zaire (now called Democratic Republic of Congo), sparking a war that toppled one of its presidents, killed another, and drew in armies from nine different countries.
But the economic interest in Africa has lately become intense. It is now routinely described as the continent of the future: by some measures it is soon to be the world’s fastest growing region, with a large and rapidly expanding consumer base—its middle class is now estimated to be larger than India’s—and an abundance of rich mineral deposits.
Moman is a tall man with a clean bald head. He makes an imposing figure. On the day we met, he wore khaki slacks and a green zip-up sweater against the cold. As his driver took us toward the city of Musanze, along Rwanda’s slick roads, Moman leaned back in the passenger seat and recounted the tenuous early days of his enterprise. He speaks with the confidence of someone who has run against the grain and succeeded; his language is precise, and he chose his words with care.
There was certainly opportunity in this part of Africa, though few were willing to take the risk at the time. Eastern Congo, Rwanda and Uganda form part of what is known as Africa’s Albertine Rift, historically the continent’s most bio-diverse region. Much of the wildlife has been lost to rebels and militias—who shoot gorillas and dynamite pristine lakes to kill fish and hippopotamus for food. But some of the animals had survived the mayhem. And the region had a rich history of conservation to draw on: the Virunga National Park, which straddled the border between what would later become Rwanda and Congo—and whose footprint is now home to both the mountain gorillas and Moman’s lodge—was originally founded by Belgian colonisers in 1925, as Africa’s first wildlife reserve.
The gorillas were also the subject of lore. The astronomer and mathematician Ptolemy, living in Alexandria in ancient Egypt, was said to have heard of this strange “half-man and half-ape” creature living on the Mountains of the Moon, now called the Rwenzoris. European explorers would later mount expeditions into this storied region in search of the source of the Nile and fabled ice-capped peaks on the equator. Moman said all this history and legend held him, firing a passion to press on in spite of the evident challenges. “I was fascinated, and it helped me believe in the place’s potential.”
We were driving to his lodge, and the small rounded hills of Rwanda had started to become taller and more jagged, black and rough as we approached the range of volcanoes in Rwanda that Moman had chosen as the site for his lodge.
Africa was a homecoming of sorts for Moman, who had grown up in Uganda. His family had deep ties to the continent. His father had worked as a postal officer under the British Empire in the 1920s, joining what was then already a sizeable Indian community, consisting largely of the descendants of Indian labourers who had been imported by the British to build Africa’s railroads in the 19th century. But Moman and these Indians had to leave Uganda abruptly in the 1970s, when Idi Amin antagonised and then expelled the Indian community. By then, Moman’s family had lived on the continent for a century. They sought asylum and received citizenship in the United Kingdom, but the scar of that expulsion never quite healed. “There was a strong pull to return because of my childhood in Africa,” Moman said. “And I fell into the wish to build something.” In our conversations, he referred often to his father, who had been obsessed with nature and Africa’s “blue sky”, as a way of describing his own desire to return to the continent, and create something associated with its unique wildlife.
BUT MOMAN FACED THE DAUNTING PROSPECT of building a tourism business in a war zone. There was little development in Rwanda at the time. When he first arrived in the region, villagers used to seeing only government officials, rebels and militias were perplexed at the sight of a tall man without a uniform driving up to their homes. “They took me for a Catholic priest,” Moman said. “They called me padre and gathered in such large numbers that it would be difficult for me to get out of my car. Their curiosity was intense and intrusive.”
Some of those villagers, wary of outsiders after years of war, tried to block his plans. Others offered to work with Moman, helping to purchase the land and build the bandas, the bungalows made of volcanic stone in which his clients now reside. “We still have some of those first workers,” Moman told me, “who applied plaster between the rocks and smoothed it out using teaspoons.” This kind of partnership with the local community would be vital to his success.
As Moman put it, he spent two-and-a-half years “wandering in the pouring rain” around the gorillas’ habitat to find a location for his idea. Most sites he visited were unsuitable: they had no view, or were too close to centres of population. There was no tourism in Rwanda at the time. Everything had to be imagined afresh—the visitors coming, the treks to the volcanoes to see the gorillas, the supply chains to build and sustain a lodge. The country was barely functioning, and people in the area were struggling merely to survive, trying to ward off rebel attacks from across the border in Congo. The situation was volatile. And the insurgency in this part of Rwanda was both violent and deadly.
It was in such a context, in this climate of war, that Moman found a piece of land.
Getting to it was difficult. We drove up a five-kilometre stretch of road that Moman had paid for himself, employing local labourers to level it off. Alongside the road, sections of the mud wall had collapsed, and workers were installing metal nets to hold up the soil. Our jeep slowed as it made the wide turns and rose up the hill. As we approached, raggedly dressed children began to gather around us, shouting “Big man!”
But on the hill’s summit, it was easy to sense the forces that might have driven Moman. The view was of spectacular beauty. I felt small, enclosed by the magnificent volcanoes that circled in front of us. Our tiny figures were perched on a ridge that continued from the volcanoes, and on either side of us the earth dropped off steeply, onto shimmering white lakes dotted with black tear-drop shaped islands. Around us the land was bright green, illuminated in an ethereal light. Moman said, “One day I just found this, one of the most beautiful places in Africa.”
Intense negotiations followed to secure the land, which was owned by a constellation of villagers, some of whom asked for hundreds of thousands of dollars for small tracts. Speculators who had got wind of Moman’s plans bought plots in the middle of the area he had already purchased—so as to make his land almost unusable—and refused to sell unless he paid them an exorbitant price. “You had to sit down with the villagers for long meetings. You had to be very patient,” Moman said.
When he first found this area, there was no ready path to it; Moman and his team sometimes slept in tents on the roadside on the way up. The steep slope would become too slippery if it had rained, and a full vehicle would not make the climb—so the next morning the equipment and building materials would have to be carried up the five kilometres on labourers’ backs.
He repeatedly tells a story of when, in the initial stages of building his lodge in Rwanda, he was camped on a hillside near the volcanoes and a powerful gust of wind tore his tent off its moorings, exposing him, his staff and their equipment to the heavy rain. “People said I was mad, that I would never be able to build something here. But I did it.”
Rwanda is today one of Africa’s fastest-growing countries, its government applauded for the progress it has made since the genocide. It is heavily supported by Western aid, and enjoys strong trade with its neighbours. It has also been criticised for repressive policies and some egregious violations of human rights. United Nations investigations recently submitted evidence of Rwandan support for a rebellion in neighbouring Congo that has displaced a million people and led to another wave of rape and executions in that troubled country.
But when Moman was setting up his lodge, Rwanda had been wrecked by the genocide and little was easily available. Toilets and basins had to be imported, while stones to build the bandas for guests had to be imported from 30 kilometres away. “It was a major undertaking to do anything because of the post-conflict reality,” Moman said. “But this was the beginning of tourism here. We really did open up this region to the world.”
There were also philosophical and moral questions as Moman’s plans took shape. “It was odd and anguishing,” he recalled, “trying to build a luxury lodge in a place where people didn’t have enough to eat. People would die in front of you. But I felt that peace might one day return, and that tourism could help develop the region.”
Moman’s first lodge opened in the late 1990s, and his company, called Volcanoes Safaris, began to take clients to see the mountain gorilla shortly afterwards. “One had to know the place intimately to see the possibility for a business at that time,” he said. “I was close to the country, and knew the dynamics of the region. As stability came here we were able to move in quickly, before anyone else.”
A little over a decade later, his vision has largely been realised. Volcanoes Safaris now operates four lodges in Rwanda and Uganda, and is regularly cited as one of Africa’s premier luxury tourism operators. Its clients have included Barack Obama’s former chief of staff Rahm Emanuel and the presidents of Macy’s and Pfizer; when Bill and Hillary Clinton visited the region, Volcanoes Safaris housed their entourage and assisted with logistics. The legendary photographer Sebastião Salgado, on a tour of the world’s last pristine places, chose to capture the stunning view from Moman’s lodge that had magically held the entrepreneur so many years ago. “It was like love at first sight,” Moman said, as we stood there looking at the landscape. “When I came up to this spot there was nothing here. But the energy of the place grabbed me. I knew we might be able to do something remarkable.
AFRICA STANDS TODAY as the next great frontier for business, a continent of enormous possibilities. Its middle class is rising, businesses are prospering in new sectors like telecommunications, and its land is rich in resources—particularly of the sort that developing countries seek to fuel their growth. There is iron and aluminium, petroleum and gold, and lesser known but lucrative minerals like cobalt, tungsten and tantalum. Africa will very likely be the future arena of geopolitical rivalries between India and China, Asia’s rising powers. But while China has moved rapidly, and with force, to spread its influence across Africa, India is yet to capitalise on its long history, its dynamic entrepreneurs, and its deep social networks on the continent.
Africa was not always seen as a place of hope. And long before such reports elicited excitement and optimism, businessmen like Moman had been building enterprises on the continent, already beginning to tap into its potential.
Indians have a long history in Africa, and their involvement on the continent varies markedly by region. Indians are most visible in East Africa, where they run large and prosperous businesses—including many consumer-goods factories. In West and Central Africa, in places like Congo, Indians are relatively new immigrants, and while some are wealthy—a billion-dollar conglomerate, the RAW Group, run by a Raoji family of Indian origin, is one of that country’s largest enterprises—the majority of Indians run modest shops or are professional employees. They work in the shadow of African businessmen or other immigrant communities of longer standing, notably the Lebanese. Rwanda lies, on this spectrum, somewhere in between. Indians have lived here for several generations. But apart from a textile mill, a consumer-goods factory and some large supermarkets owned and operated by Indians, their presence is fairly discreet.
Moman said that his family’s ties to Africa had helped his business enormously, and were essential to developing his personnel. “We are aligned with traditions on the continent,” he said. His father came to Africa in 1935. His great-uncles had lived in the region since the 1890s. “Our staff, and governments, know that we are part of what is sometimes called the ‘Indian tribe’ of Africa. And the staff are fiercely loyal to me because of this.”
At a staff meeting in Musanze, it was possible to see Moman’s own roots in Africa as a critical element in his connection with his local employees. “What I want is for our lodges to be run by Africans,” he told them, after pointing out some areas in which service needed to improve. “Can we do this ourselves?” Part of the reason Moman started his company was a desire to return to Africa and reclaim his family home in Kampala, the Ugandan capital. He often broke into Swahili during the meeting; his speech was peppered with African idiomatic expressions. Moman wanted Africa to succeed because he felt part African. There was powerful emotion behind his impassioned speech to his staff, as he exhorted them to step up, and it seemed to resonate with the employees: Moman’s driver told me later that he had risen within Volcanoes Safaris from being just a driver to also serving as a guide for clients, and that he hoped to one day start his own tourism company.
But it is important to remember that Indian history in Africa has been far from smooth. Indians have long been resented, particularly in the east, for their economic power. Jomo Kenyatta, Kenya’s independence hero and first prime minister, famously accused Indians of practicing a “cat-and-mouse friendship” and insulting Africans. Idi Amin’s decision to expel the Indians from Uganda was a violent reaction to Indian domination of his country’s economy. There have also been historical tensions regarding Indians’ labor practices, which have sometimes been exploitative. Some recent Indian investments—like the 25 percent stake in a Sudanese oil company purchased by the overseas arm of the state-owned Oil and Natural Gas Corporation, despite sanctions against Sudan for human rights violations including massive atrocities in Darfur—have run against the best interests of Africans, even if they have come under less public scrutiny than similarly controversial Chinese investments.
There are also differences between Indians whose families have been living in Africa for generations—who often run or are employed in family businesses—and the newer immigrants, who can be bolder in their hunt for economic fortune.
It is these newer Indians who are today among the avant-garde investors on the continent, often, like Moman, possessing the business foresight to create new markets in conflict-torn regions, the ability to work in Africa’s hostile conditions, and, perhaps most importantly, the willingness to take risks. The Indian entrepreneur operates in numerous African war zones, from Congo to Sudan to Somalia, sometimes in less-than-admirable businesses. I met Indians in Congo who ran diamond smuggling rackets, traded gold for companies with ties to violent militias, and sometimes even supplied those militias with weapons. Indians have also been criticised for producing and selling spurious medicines in Africa. Still, the sight of an Indian shop or small-business owner has become ubiquitous on the continent, and the Indian presence also works for good. Indians run textile factories and automobile dealerships, and manufacture soap and potato chips for millions of Africans. They run printing businesses for politicians in several East African countries, often serving members of the opposition who may one day rise to power. All of this signals that Indians have a long-term interest in Africa: they have become embedded as an essential part of the continent’s fabric.
MOMAN’S STORY IS ONE OF SUCCESS on a continent with a troubled history and reputation. And as Africa’s business reputation slowly trends towards the positive, the challenges for enterprises like Moman’s also evolve. “Ten years ago we were the pioneers. People thought I was crazy to try this, but clients were happy with whatever we could provide,” he said. “Now we are operating in a global economy. Our clients come from New York, London and other major cities. We just sent one of our African staff members to train in the UK. Travellers can go anywhere in the world for a holiday, but we convince them to come to Rwanda and Uganda. We are competing in a global economy with just a handful of rooms.”
But while Moman’s achievements might be impressive, they are dwarfed by the sheer scale of Chinese constructions in Africa. As he was carefully building Volcanoes Safaris with his team of African laborers, he has seen China’s influence profoundly reshape the continent. On each visit to Africa’s capital cities, like Kigali, Kampala and Kinshasa, he could witness immense change—Moman watched as towers, hotels and stadiums sprung up, as new roads were cut into hillsides and paved one after the other by diligent construction workers brought in from half a world away. The Africans, perhaps more than anyone, were stunned. “Everything is moving so fast, sometimes it is hard to recognise parts of my own city,” a Rwandan electronics shop owner, Boniface Kariseka, told me in Kigali. Chinese companies were transforming the African continent, and they were doing so strategically, backed by the full resources of their increasingly powerful and wealthy state.
China is the latecomer to the African party. It has no notable history on the continent—besides training some of Africa’s communist-leaning leaders during the Cold War. And for a long time it had few commercial relations with Africa. But China’s great ambitions now turn on economic growth—not only to reinforce its new status as a global superpower, but also to satisfy an increasingly educated and gentrified population who, if the economic engine slows down and opportunities become more limited, may begin to ask for greater rights.
So China has moved decisively in Africa. It has secured extensive access to Africa’s mineral resources—with speed and on a scale perhaps not seen on this continent since the Cold War, when the West courted African leaders to prevent them from allying with communist states. Oil in Angola, copper in Congo and Zambia, aluminium in Guinea and iron ore in Sierra Leone and Liberia—these are just a few of China’s lucrative deals. Africa contains 40 percent of the world’s known gold reserves, and the China National Gold Corporation, a state-run enterprise, has announced plans to acquire a majority stake in the African operations of Barrick Gold Corporation, the world’s largest gold mining company. China has also made deals for access to Africa’s deposits of chrome and platinum, which make up more than 80 percent of the world’s known reserves. Even after years of extraction, mining has hardly begun to scratch the surface of Africa’s wealth—which could satisfy China’s needs for decades to come.
But resource extraction is only a part of the story, and while India lags far behind China’s investments on the continent, Indian businesses may be advancing, albeit more subtly, in consumer-facing industries. The much-publicised India-China rivalry may not develop into the great battle it is sometimes projected to become—particularly if India decides it does not wish to compete with China for Africa’s natural resources. But India will increasingly need to seek out raw materials: it currently imports 75 percent of the oil it consumes, and is set to become the third-largest energy consumer in the world by 2030. India may also run out of coal, one of its main fuels, in three or four decades.
China’s trade with Africa has increased almost a hundredfold in the last 30 years to over $160 billion annually, according to China’s Ministry of Commerce, making it Africa’s largest trading partner, ahead of the United States and France. In only the last two years, China has committed or proposed a further $101 billion in commercial investments in Africa, with 90 percent of that amount going towards natural resources and construction projects, according to data compiled by the research firm Stratfor. India’s trade with Africa stands, in comparison, at only $50 billion annually, though it is growing at about 25 percent per year, roughly the same rate as China’s trade with the continent. But with a foothold in telecom, agriculture, and automobile distribution, Indians may be well positioned for business on a continent whose growth, according to the consulting firm McKinsey & Company, will be driven not by mineral resources but a rising consumer market. In a November 2012 report, McKinsey projected African consumer-facing industries will grow by $400 billion in the next eight years alone. During the past decade, Africa has been the world’s second-fastest growing region, behind only the same Asian countries that now seek it out as a business partner. Over the next five years, according to the International Monetary Fund, the continent’s economy will have the world’s most rapid growth, and seven of its ten fastest growing countries.
THE CHINESE ARE VISIBLE across Africa now. There are increasing numbers of independent Chinese entrepreneurs running small businesses, but, for the most part, they work for state-owned or affiliated Chinese corporations. During the daytime, Chinese workers can be seen on many African roads, wearing construction hats and thin blue overalls, mixing and laying cement. But these workers generally disappear at night. One doesn’t see them on the streets, in supermarkets, or even in Africa’s lively nightclubs. The workers themselves remain distant: if I approached them at work sites, they refused to talk to me—they shook their heads, sometimes violently, as if puzzled that anyone would take an interest in them. Managers would immediately come up to shoo me off. Often none of the Chinese on site—including the managers—spoke anything but Mandarin.
Hoping to gain some sense of their perspective, I began to spend time at a Chinese restaurant in Kigali. It is one of the few independent Chinese businesses in Rwanda, an offshoot of a distribution business that sells Chinese-manufactured food, electronics, and even electric motorcycles. (Other Chinese private enterprises in Rwanda include a supermarket and some acupuncture clinics.) This restaurant was called Great Wall, and I had seen groups of Chinese occasionally come here for dinner. It was situated on the terrace of an old building, with canopies erected to protect one from the rain and sun. At night, the darkness was pierced by compact fluorescent lamps, and by the light of the flat-screen television hung up on the wall. It was here, on one evening, that I met Li Ye.
He was a supervisor at a Chinese construction company—he refused to give its name—in Rwanda to build a hotel, and though he was guarded, he was willing to speak. He allowed me to join him at the table, and ordered me a vegetable soup. We started to talk about his business.
Li said that he was responsible for managing about 80 workers, who slept in a single building in Kigali town. The workers retired to the building every evening, which is why one did not see them out at night. These labourers, like Li, had come on short-term contracts. They would be transported back to China once their portion of the construction was completed—the rotation helped keep the workers fresh. Some Chinese workers, in a growing trend, stay back in Africa after such short-term contracts—many of them start businesses, or are employed by Chinese already working there.
Li said he came from the area around Guangzhou, which as a manufacturing hub had strong ties to Africa. Back home he had often seen Africans on the streets, in hotels and in restaurants. They were there to purchase cheap Chinese goods—telephones, electrical appliances, construction materials—to take to Africa and sell for a profit.
But Li felt China has far more to offer Africa than cheap consumer goods. He said that he was a sign of the changing relationship between the two regions. “Africa wants us because we work fast,” he said, picking at spongy black mushrooms with his chopsticks. He said his workers cared little for their living conditions as they were paid a premium wage for work abroad. “They are experienced workers from China. They don’t have time for leisure.” It was clear from my conversation with Li that his workers generally built little connection with Africa during their stints. Li himself had not had time to see much of Rwanda. He said he had no Rwandan friends. He followed the news from his hometown, not the papers in Kigali.
Men like Li had come to Africa to build, and they built large. In return for access to resources, China has given African governments great megalithic prizes —cement structures that now dominate the skylines of some African cities. The Chinese were also in the tourism game—their gigantic hotels were everywhere in Rwanda. There were dozens of new stadiums on this football-crazy continent. Spanking new roads. New hospitals.
Much of this construction came in the Chinese utilitarian fashion: often as big, characterless masses of concrete. In parts of Africa, however, this was still progress. And these mammoth prestige projects had helped African leaders create a new sense of pride among their people. “Look at the skyscrapers,” Evariste Mugabo, a Kigali taxi driver, told me one day, pointing to a 30-storey Chinese-built structure that stuck out on the city’s rather flat skyline. “Who can deny our rise when such towers are coming up in front of our eyes?” The construction cranes in African capitals had begun to move, manned by Chinese labourers. Chinese lettering marked boards announcing the large buildings that had begun their ascent.
THE CHALLENGES FOR FOREIGNERS working in Africa—particularly in private enterprise—can be constant. Old problems with the land that have seemingly been resolved can resurface without warning. Supply chains can be suddenly disrupted because of a conflict or political tensions. All this in addition to the formidable challenge of running the business—transporting clients safely, keeping employees happy, and maintaining and upgrading the lodgings to keep up with the competition.
And while the Chinese were importing cranes, bulldozers and armies of labourers, Moman has had to contend with minimal resources, and mostly seek financing on his own. A lack of trained professionals is one of the great challenges of working in Africa. China’s solution, thus far, has been to import workers who speak their language and are trained in their methods—the small Chinese businesses that exist in Africa also mostly employ Chinese. The familiarity means construction projects are completed with great speed—almost in the blink of an eye in tropical time scales—and enterprises are run by groups and networks of influence that benefit from a great degree of internal trust. But Moman, like most Indian entrepreneurs in Africa, works with local resources, and the means he has at his disposal.
In speed and in scale, through its ability to transform cities with armies of workers, China has leapfrogged India on this continent. It has forged close ties with African leaders and laid powerful claim to the continent’s riches. Chinese companies in Africa are funded by state-owned banks, ordered by Beijing to provide low-interest loans for politically significant projects. China exercises its infamous “no interference” policy, asking few questions about human rights or other sensitive issues that come up in the halls of the United Nations. It accepts cash payments for infrastructure contracts, seeming to care little for whether the money has come from corruption or trafficking.
Both India and China benefit from past Western failures in Africa. Many Africans are tired of Western intervention on their continent, which led to support for disastrous dictatorships during the Cold War. Ruthless dictators—like Mobutu Sese Seko, Juvenal Habyarimana and Jean-Bedel Bokassa—received vast sums of foreign aid from the World Bank, the International Monetary Fund and bilateral agreements with Western governments. Much of this aid money was lost—knowingly—to corruption. The buildings, bridges and roads that were promised never materialised. And the African people were left with a hefty bill to repay.
China’s practices may be less than transparent or democratic, but it has delivered on its commitments, and Africans have benefited. Western companies, as a result, no longer automatically receive preferential treatment in Africa. The Asian giant has dramatically shifted Africa’s economic landscape, and opened up new opportunities for Eastern enterprises. China has already taken over the significant infrastructure sector in Africa, for example, which American, European and Japanese companies once dominated.
India has tried similar tactics, in a seeming attempt to play catch up. And in fact, trade with Africa represents a larger part of India’s overall trade (seven percent, to be precise) than is the case for China. India’s Export-Import bank has a strong African emphasis: 60 percent of its lines of credit, worth $2 billion, are in Sub-Saharan Africa. India’s Pan-African e-Network project, launched in 2009, aims to use fibre-optic technology to bring India’s medical and education expertise to Africa cheaply. India has also hinted at ambitions in the diamond industry. And it has offered $1 billion in lines of credit to West African countries in exchange for oil exploration rights there. But African governments are lining up to ask for new Chinese loans, which are more plentiful, and increasingly seeking out China as a business partner.
Li Ye said many observers missed the point of China’s push. “People say China is only here for its own interests,” he said. “But we are here to partner with Africa, and develop their countries. The hotel I am building is proof. It will be used by Africans, not Chinese. But people don’t want to see this aspect of our work.”
As China’s presence in Africa grows, there have been cultural misunderstandings between Chinese and African communities that have historically had little communication with one another. Rumours spread quickly, and the damage caused can be difficult to undo. Newspapers in Rwanda recently reported that Chinese restaurants were selling dog to their customers, pretending it was chicken. I mentioned this to Li as we asked the Rwandan waitress, in red Chinese costume, for the bill. He grew livid. “Yes, it is in our culture to eat dogs sometimes,” he said. “But to say that we are feeding it to our customers and not telling them, that’s wrong.”
I HEARD ABOUT PK JAGAN from his brother, who helped run Kigali’s La Sierra restaurant, one of the oldest businesses still operating in Rwanda, having been set up in the 1920s by Indian immigrants. Jagan, I was told, had his foot in several businesses in Rwanda, and was expanding rapidly. With his old ties in Africa as well as his new enterprises, I felt he might be able to give me a sense for how the fortunes of Indians on the continent were changing.
Jagan was a short man, with a thick crop of hair parted sideways; he wore sunglasses on a cloudy day. I found him standing amongst his African employees, who wore blue overalls, in a dingy room strewn with pipes and bolts. This was the depot for his automobile spare parts company. Twenty-two years ago Jagan had come to Africa from Kerala, to work as an accountant at an auto-repair firm. A decade later, tired of working for others, he said, and of seeing opportunities pass unexploited by his employers, he decided to quit their firm and found his own business.
“Africa has so much opportunity,” Jagan said, “that you didn’t need a lot of experience or knowledge, especially back then, to succeed.” His auto company had survived over the years, and he told me it was still doing well. But the challenge of that business had diminished for Jagan, who is 47, and he had turned to real estate. “There is a lot of land in Kigali that will become very valuable soon,” he said. “Now is the time to get into this business.” He had launched a commercial real-estate company. He was constructing one multi-storey building and planning two others. And at the same time he had been thinking about his own future. This modest man who had come to Africa as a simple accountant was now making for himself a large villa in Kigali’s centre. He wanted this villa to have a jacuzzi, and when we met for our interview Jagan had just received news that this jacuzzi had arrived at Rwandan customs. “After the first two days they start charging you storage fees,” he said. “So I have to sort it out.” I asked if I could join him on the drive.
We climbed into his new Toyota Landcruiser, fitted with plush beige interiors. Four Rwandan workers in blue overalls quietly got into the backseat. Jagan handed me his business card—it listed companies in Rwanda, Burundi, the United Arab Emirates and Chennai. “This is the new Africa,” he said. “Ten years ago what I am doing would be unthinkable. But Africa is so connected now that I run all these businesses from Kigali.”
And though Jagan has prospered on the continent, and is optimistic about his own future, he said he fears that the Chinese may soon grow so powerful in Africa that they will corner the most profitable business opportunities for their own people. He rues India’s lack of initiative, which he believes will cost him dearly in lost opportunities in the years to come—and even threaten the businesses he is working hard to build.
The African continent has in fact drawn the attention of some large Indian enterprises. Among the biggest of these is Bharti Airtel, which paid $9 billion for the large African operations of the Kuwaiti mobile company Zain, to become Africa’s second-largest telecom operator. It was India’s second-largest overseas acquisition, and Airtel’s billboards are now visible across central Africa, painted on the sides of buildings and small shops. It has shaken up the telecoms market in Africa, playing the Indian game of high volumes and razor-thin margins. Notably, Airtel seems to hire few Indians—on a visit to its Rwandan headquarters I saw and met with only African workers.
India has also announced it will build a $1.2 billion fertiliser plant in Ghana. Tata Motors has an automotive assembly plant in South Africa. India is also involved in major IT projects across the continent, and Indian education institutions are busy expanding their franchises to Africa, attracting students eager to learn in the English language. China is all but absent from these sectors.
Only in a few businesses—but increasingly so—do India and China confront each other head on. The light-automobile sector is one of them, in which players like Bajaj and TVS sell mostly 125cc motorbikes, and compete with companies like China’s Li Fan. Workers at Kigali’s garages say they have begun to receive more Chinese-made cars, even four-wheel drives, though they rarely recommend that clients purchase them. Innocent, a mechanic at one Kigali garage, told me that the Chinese cars “look good when they are new. But when they crash they crumple up like paper.”
Indian companies have now begun to mine for coal in Mozambique—one of the few instances where India is treading on China’s toes is the race for Africa’s mineral wealth. Mozambique has in recent years become a Chinese mining stronghold, and China is one of that country’s largest trading partners. But India also needs resources to fuel its growth, and it seems to be slowly awakening to the potential in Africa.
Yet the newer Indian immigrants say that their vision and enterprise are often stymied. They express frustration at the number of opportunities they see slip away for a lack of seed capital, or professional labour that would be readily available in India, or relationships with African governments. Running their small businesses by the bootstraps, their vitriol against the Indian government comes heavy and hard.
“Africa is the future. I believe this, that is why I stayed here after the genocide,” Jagan told me. “But this is where we need to criticise India. Our government does not care. Everything we have achieved has been done on our own. Indians could expand so quickly in Africa. But without government support we only progress in small steps.” We drove down Kigali’s neatly paved roads—almost all Chinese jobs—and Jagan parked to take a call, in Swahili, from the manager of his automobile spare parts company.
As of a few months ago, Jagan’s medium-sized African conglomerate also includes a franchise of Aptech Computer Education, a well-known Indian private education company. Rwanda’s government has promoted Information Technology as a future engine of its economy, and Rwandan students are keen to learn from Indian institutions. Thousands of African students now travel to India for education, spending as much as $10,000 a year—though some benefit from a handful of Indian government scholarships. Jagan said his idea was to bring the education to Africa for a fraction of the cost. But he has faced difficulties with financing. “We would like to build a full-fledged education campus. The demand is obvious. But loans are very expensive in Rwanda,” Jagan said. “The Chinese get interest-free loans from their government. Why can’t the Indian government do the same?”
Jagan said that direct flights from India to more African cities would aid businesses enormously, as travel between the regions was often prohibitively expensive for commerce. New cargo routes would help cut the costs of freight and benefit Indian exports. A wider network of Indian embassies would help build ties to African governments, and open opportunities currently closed off to Indian investors. “All this requires government-to-government negotiation,” Jagan said. “But when we ask the High Commissioner in Kampala for help, he does nothing. He hardly spends one day per year in Rwanda, a country that he officially covers.” (The High Commission in Uganda, contacted by phone, refused to comment.)
India may not need to do more, at least in the eyes of its businessmen, than systematically reach out to the continent. They say that India’s various African initiatives are piecemeal, with limited impact. “Governments in Africa want Indians to come, and set up small-scale industries,” said MJ Sebastian, a commodities trader and the chairman of the Indian Association Rwanda, a private organisation that represents Rwanda’s 1500 Indians. “Africa needs infrastructure, schools, hospitals and IT. Indians thrive in every one of these sectors. If we build better relations with African governments the sky is the limit for us.” He pointed out that in many East African countries, like Kenya and Tanzania, Indians run important and successful businesses. “There is a lot to do. But India is not observing the changes in Africa.”
In some ways Sebastian’s office was itself emblematic of India’s position and resources on the continent. Here was the representative of Indians in Rwanda, and his cubbyhole of an office had no space in front of his desk for even a visitor’s chair.
Sebastian said that India had a window of two years in which, with substantial investments, it could catch up with its Asian rival. “What we need is a special administration for Africa. India is under threat. We are seeing many Indian businesses in Africa being taken over by the Chinese.” Sebastian explained that the Chinese were gaining influence in traditionally Indian-dominated sectors like import and export trading, textiles and food manufacturing. “There is not much we can do. They are taking over everything, even from those of us who have been here for three decades.”
During a 2011 India-Africa summit held in Ethiopia, Prime Minister Manmohan Singh reiterated the importance of Africa to India. He stressed the importance of forging new partnerships with the continent, calling for greater “South-South cooperation”. At the time, Singh promised $6 billion in loans and investments over multiple years. It was a significant commitment, but not nearly enough to change the nature of India’s engagement with Africa.
An Indian diplomat I met was pessimistic about India’s prospects on the continent. He was visiting Kinshasa to discuss economic partnerships with Congo’s president, Joseph Kabila, and he spoke to me on condition of anonymity, because he was not authorised to discuss such matters, and because his opinions ran against the official government line. India’s current cooperation with Congo includes some support for defence programs, and the setting up of a medical and educational e-network there. The diplomat was working with Congo’s government to set up a diamond-polishing center that would bring in expertise from Surat. But plans for the center are still to be finalised, even after years of negotiations. “When China decides it wants something, they send an army to get it,” the diplomat said, at the home of a prominent Indian investor in Congo. “It’s top-down governance. But for India even to decide it wants to be in Africa it has to go through all these negotiations in parliament. It’s called democracy. Africa is moving fast. We’re too slow to compete with China.”
India has a distinct advantage in Africa: a long history, and deep social networks. Jagan, for example, said he had no plans to return to Kerala. His children, aged eight and ten, had been raised entirely on the continent. “In many ways I feel much closer to Rwanda than I do to India,” he said.
Africans I spoke to shared, with a few reservations, some of the optimism Indians have for their future in Africa. “Indians can be egoistic, not paying their employees enough,” said Kariseka, the Kigali electronics shop owner. “But we know each other well, and we know that we can work together.”
In the meantime, both Moman and Jagan seem to feel that the world is catching up to the continent, and the old Indian ways of business—using local labour, with limited resources, and living small—may no longer work as well. It is a sign that Africa’s economies are coming of age. The new immigrants—from China, India and the West—are developing deeper links between the continent and the world. New opportunities and sources of financing will emerge. Markets that had for long remained out of reach will become viable. Indians, given their history, will be a part of this African future. And the continent will likely attract increasing numbers of India’s economic adventurers, seeking out the new frontiers of the global economy as a place to make their fortunes.