Many Kenyans may not have heard of Gisenyi, the Rwandan town on the DR Congo border. The one across in DRC is Goma — now everybody has heard of it, if only for its volcano eruptions.
The border point between the two countries, on the Rwandan side, is called Rubavu. With over 90,000 people crossing it at high points, it is thought to be the world’s second-busiest after the main one between the United States and Mexico.
There is a lot of money sloshing around — from the teeming population; (il)legal mining in DRC; large concentration of NGOs and humanitarian workers in Goma, from where most emergency operations for the many crises in eastern Congo are managed; and the emerging lakeside economy on the Rwanda rim of Lake Kivu. This side of the lake is the world capital of methane energy plants, tapping the vast resources of methane gas.
Where there is money to be made in East and Central Africa, Kenyan companies, especially banks, will not be far behind. Gisenyi would be quite recognisable to Kenyans. They would immediately sass out a familiar brand, Serena Hotel, on the Rwandan side. In Goma is a newer and grander one. There is a busy Equity Bank branch in Gisenyi, and in Goma. Footsteps away from Equity Gisenyi is the other behemoth of Kenyan finance, KCB Bank.
The border economy here is quite unusual. The Rwandan side has monetised its peace and security. You see, there’s the occasional lawlessness in Goma, which is good business as it means the meddling reach of the state, with its taxes and extortionate licensing fees, is limited, allowing traders to pocket more of their money. But it also means many loaded fellows who make their money in DRC keep it on the Rwandan side, where they also live. They will walk about in Gisenyi with bags stuffed with money, comfortable in the knowledge that they will not be mugged on the street or robbed in their homes at night.
The banks represent many elements — Kenya’s growing financial diplomacy, but also the rising hegemony of Kenyan finance in the sub-region. In Gisenyi and Goma, they feed off low-hanging fruits. But the sharp end of this Kenyan finance capital hegemony is apparent in the capital Kigali. Last year, KCB acquired BPR Atlas Mara, bulking out its financial muscle further in Rwanda. Shortly earlier, it had seriously invested in the completion of the vaunted Kigali Convention Centre.
Equity has been swinging punches around too. As The EastAfrican noted, when “The Marriott Hotel critically needed a lender to get it out of a difficult phase, Equity stepped in and invested”. For its upcoming regional headquarters in Kigali, it is constructing a complex that will also host Kigali International Financial Centre.
If any bank should move in the opposite direction — from other parts of East Africa to Kenya (and the East African Community in general) — there is one that people outside Rwanda will not have heard of. It is called Zigama CSS (credit and savings society). It is owned by Rwanda Defence Forces (RDF), having started life as the army’s sacco. Highly profitable, Rwanda’s fifth-largest bank could be the only military-owned one in Africa outside Egypt, where the army has its fingers in many pies.
However, it’s not so much its business model as its social policy, which could come in handy in international stabilisation for countries like Uganda and Burundi, where the armies occupy larger-than-life roles, and Kenya, where there has been the rise of a militariat in recent years.
When a Rwandan soldier dies, on or off the field, the bank automatically writes off 25 million Rwandan francs (nearly $25,000) of their loan, if they have borrowed from it — irrespective of their rank. If the soldier was a prudent investor, it is an immediate $25,000 pay-off to their family. Such incentives drive membership up.
The country is now one of the largest troop contributors to UN peacekeeping, numbering almost 6,000 from the military alone. Peacekeepers’ pay is sent through Zigama, providing a constant inflow of deposits. And those who invest their money in business keep Zigama as their banker.
A small but pregnant fact in Zigama’s balance sheet: Peacekeeping is now Rwanda’s single-largest foreign exchange earner. At almost $900 million a year, it is nearly double the take from tourism and many times bigger than gold, tea or coffee.
Equity and KCB probably look at these numbers and wish they had come to the party earlier. But there are many years ahead, and the East African project is still unfolding.
Mr Onyango-Obbo is a journalist, writer and curator of the “Wall of Great Africans”. @cobbo3
