Investment Climate in Rwanda
Rwanda has a sound macroeconomic management and fiscal discipline that has resulted into consistent economy growth at an average GDP of 8% per annum. According to The National Institute of Statistics of Rwanda (NISR) Rwanda’s GDP is expected to grow by 6% in 2016. The key sectors contributing to GDP will include services 46 percent, agriculture 33 percent and industrial 15 percent. The government has also identified key sectors for fostering economic activity to include Textiles, garments and leather industry, agriculture export crops, agri-business, construction, livestock, wood industry, minerals, tourism and ICT and trade and investment facilitation. GDP is expected to continue growing by 6.5% in the medium term. The government goal is to transform Rwanda from a low-income agriculture-based economy to a knowledge-based, service-oriented economy with a middle-income status by 2020. The private sector is a key driver for the development of Rwanda economy. Rwanda has a unique leadership committed to its development with a culture of zero tolerance for corruption. It is a country with a predominantly rural youthful population. Rwanda is one of the two countries in the world with a female majority in the national parliament and the other country is Bolivia.
The Fourth Rwanda Population and Housing Census (RPHC4) of 2012 confirmed the population of Rwanda to 10.5 million people of which 52% are women and 48% men. Since the 2002 Census, the population has increased by 2.4 million, which represents an average annual growth rate of 2.6%. The population of Rwanda is still largely rural, with 83% living in rural areas. Government recognises that planned urbanisation creates opportunities for socio-economic growth as it enables proper use of resources. The National Urbanisation Policy (2015) by Ministry of Infrastructure indicates that urban population has increased from 4.6% in 1978 to 16.5 in 2012 and it is envisaged to reach 35% by 2020 in accordance to the Vision 2020. The current growth rate of urban population is estimated at 4.1%. In the light of urban population growth, the government is putting in place measures to position Kigali as a centre for investment and business growth but also with a focus of promoting balanced and transformative urbanisation through the development of secondary cities.
Zero tolerance to corruption
The government of Rwanda promotes a zero tolerance approach to corruption backed with affirmative action to create a corrupt free environment. Rwanda is number 44 least corrupt nation out of 175 countries, according to the 2015 Corruption Perceptions Index reported by Transparency International.
The country is quite peaceful and there are no security concerns to investors in Rwanda.
Unemployment and skilled labour
The Labour Force Survey programme of 2016 has indicated unemployment rate at 13.2 percent, with urban unemployment rate of 15.9 percent being higher than the rural rate of 12.6 percent. The government continues to invest a lot in the youth’s education as it recognises the importance of trained and skilled labour force to investors coming to Rwanda. Government will continue its effort to attract high-end education facilities such as Carnegie Mellon University that is already established as well as technical and vocational training in relevant areas. It is also quite easy for employers to get resident permits through The Directorate General of Immigration and Emigration provided the application is accompanied with supporting documentation and there are no local people that qualify for the position.
Rwanda credit rating
Moody’s credit rating for Rwanda in August 2016 was reported at B+ with stable outlook. This credit rating indicates the credit worthiness of a country and has therefore a big impact on the country’s borrowing costs.
Attitude toward Foreign Direct Investment
The country is the most competitive place to do business in East Africa. The country has also put in place a new Special Economic Zone. The Government of Rwanda recognizes the importance of private sector investment for the achievement of the middle-income status by 2020 and reducing the country’s reliance on foreign aid. In Doing Business report Rwanda ranked 46 out of 189 countries in 2015.
Assistance to foreign investors
Rwanda Development Board (RDB) is responsible for attracting investments into priority sectors of services, manufacturing and tourism among others. RDB reaches out for investors with specific investment opportunities through international road shows as well as individual business presentations. RDB facilitates prospecting investors coming to Rwanda by putting them in contact with people and entities they wish to meet
Restrictions on Foreign investment
The government of Rwanda’s focus is on reducing restrictions on foreign investment. No limitations on foreign ownership or control and there is no official economic or industrial strategy that discriminates against foreign investors. There is no mandatory screening of foreign investment. Rwanda Development Board however evaluates the business plans of those investors seeking tax incentives in order to record incoming foreign investment and to allocate incentives to qualified foreign investors. All sectors in Rwanda are open to foreign investment.
There is no serious difficulty in obtaining foreign exchange or transferring funds associated with an investment provided the remittance is done within guidelines issued by the National Bank of Rwanda.
Doing business in Rwanda
The following are some of the key facts on doing business that makes investing in Rwanda quite attractive:
Rwanda is signatory to the International Center for Settlement of Investment Disputes (ICSID) and African Trade Insurance Agency (ATI). Rwanda is also a member of the East African Court of Justice for the settlement of disputes arising from or pertaining to the East African Community (EAC). In 2012, the Government of Rwanda launched the Kigali International Arbitration Center (KIAC), an alternative business settlement venue that aims to reduce the costs of contract settlement and enforcement for investors. Rwanda’s commercial courts address commercial disputes and facilitate enforcement of property and contract rights. National laws governing commercial establishments, investments, privatization and public investments, land, and the protection and conservation of the environment give primary directives governing investments in Rwanda. Rwanda signed and ratified the Multilateral Investment Guarantee Agency (MIGA) convention on October 27, 1989.
Intellectual Property Rights
Ministry of Trade and Industry formulated Rwanda’s Intellectual Property (IP) Policy in 2009. The intellectual property rights are protected under LAW N° 31/2009 OF 26/10/2009.
The mineral resources include the following;
- Cassiterite (tin ore),
- Wolframite (tungsten ore)
Rwanda has the following National Parks
- Akagera National Park
- Gishwati Forest
- Nyungwe Forest National Park
- Volcans National Park
The forests include:
Rwanda is home to one third of the world’s remaining mountain gorillas, one third of Africa’s bird species, several species of primates, volcanoes, game reserve, resorts on Lake Kivu, graceful dancers, and artistic crafts. In addition Rwanda has hydropower, arable land and every beautiful country among other things
Rwanda Vision 2020
Exports of Rwanda
International Trade Agreements with Rwanda
Natural Resources of Rwanda
Trading partners with Rwanda
Security and corruption
Unemployment and skilled labour
Restrictions on investments
Facts on doing business in Rwanda
Investment Authority in Rwanda
Investment incentives in Rwanda
Intellectual property rights