Rwanda targets $1 billion from FDI’s

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Rwanda aims to increase foreign direct investment in 2015 to $1.2 billion, a fourfold jump from two years ago, helped by a new investment code that offers tax breaks and other incentives, a ministry of finance official stated.

World Bank rankings show Rwanda is one of the easiest places to do business in Africa, after Mauritius and South Africa.

“This year we aim to achieve $1.2 billion worth of private investment into the economy and to grow that annually by 20 per cent,” Francis Gatare, chief executive of the state’s Rwanda Development Board, told a meeting of local businesspeople.

“That’s an ambitious target we’ve given ourselves based on the broader objectives of our economic growth ambitions.”

In 2013, the latest year for which figures are available, foreign direct investment in Rwanda was $257 million.

Long praised by Western and other donors for rebuilding swiftly after the 1994 genocide, Rwanda has been aiming for double digit economic growth. Although it has not attained that level, the economy managed 7 percent in 2014.

Rwanda published a new investment code in May, outlining incentives that included a seven-year corporate tax holiday to firms investing at least $50 million, of which 30 percent was equity in strategic sectors.

The sectors included manufacturing, tourism, health, information technology, other export-oriented industry and energy projects with capacity of at least 25 megawatts (MW).

Incentives to those investing $50 million or more were designed to attract large single investments “that can have bigger and sustained impact to the economy,” Gatare said, adding the sectors were ones expected to have “wider multiplier effects.”

Officials have said more investment and spurring on growth would help wean the country off foreign aid, which now accounts for almost 40 percent of the annual budget although the proportion has been gradually falling in recent years

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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