Why Rwanda ranked among top investment destinations

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Why Rwanda ranked among top investment destinations

The Baseline Profitability Index (BPI), published by the Foreign Policy Magazine, has ranked Rwanda among the top 10 countries best destination for investment in the world.

The report puts Hong Kong in the first position with 1.23 BPI value, followed by Botswana (1.22). Taiwan (1.21), and Singapore (1.19), third and fourth, respectively, and Rwanda in the fifth- with 1.18 BPI value out of 102 countries surveyed across the world.

Though Hong Kong and Singapore, regularly top indexes like the World Bank’s Doing Business rankings and the World Economic Forum’s Global Competitiveness Reports, three African countries- Botswana, Rwanda, and Ghana; have managed to surface in BPI report.

Why Rwanda?

Rwanda has put its focus on investment promotion and attracting as many investors –both local and foreign through various institutional reforms and polices. This has enabled many investors to startup business in Rwanda’s untapped opportunities in areas such as: Infrastructure opportunities in rail, air transportation to further develop Rwanda as an EAC hub, Investment in tea and horticulture.

Rwanda also has quality Tea and coffee and growing conditions among the best in the world. The Energy: Power generation, off grid generation and significant methane gas opportunities, and Tourism: Unique assets creating booming sector; growth potential in birding and business (conference) tourism.

Some of the foreign investors say they chose to come to Rwanda without even thinking twice about the decision. Mevlüt Kayar, the Turkish Airlines Vice President of Marketing & Sales says that the star alliance airline chose to invest in Rwanda because of the good governance and political will in the country, which gives assurance of the future.

“When you compare Rwanda to other countries, it is very assuring when you don’t have to bribe to do business. Rwanda is a small country but it has a future and we will be proud to be part of this” he said.

Even mediocre investors, like Peggy Masambu, a Kenyan who run a consultancy have tasted the difference in the way Rwanda is running its investment climate business. I registered my company and I was given the certificate in six hours. That is not common in this region because of the chain of corruption” Masambu says.

Rwanda’s secret magic

Rwanda has given all reasons for making herself an investor’s destination. The country has been defined by a commitment to ensuring an investor-friendly attitude, and its investment climate has totally been re-defined by peace and stability and zero tolerance to corruption.

The Government of Rwanda is acutely aware that achieving the objectives of its Vision 2020 requires a substantial contribution by foreign investors, who need to be welcomed and assisted on the ground. This awareness is reflected in several ways in the investment regime.

Starting a business is much easier and faster in Rwanda, and so is registering property, than it is in any of its neighbors in the East African Community (EAC) according to the World Bank 2013 report on Doing Business in EAC released this May 2.

There are no sectors that are barred to foreign investors and no restrictions on the percentage of equity they might hold. The Constitution of 2003 also guarantees investors against expropriation, except in the public interest and with fair and prior compensation, which may be repatriated.

Rwanda’s investment promotion division under the Rwanda Development Board has been a gateway to investing in Rwanda. The division reaches out investors with specific investment opportunities through international road shows, facilitate prospecting investors coming to Rwanda by putting them in contact with people and entities they wish to meet; organizes sector specific conferences and networking session, assists with inquiries and information gathering on behalf of the investor and seeking potential local and foreign partners in Rwanda for potential investors.

Rwanda’s Tax incentives are offered to both foreign and local investors. The investment code and tax laws and East African Community tax regulations make provisions for tax incentives. Among these incentives are exemption capital goods and raw materials; hotel equipment; as well as a flat rate of 5% in lieu of taxes and duties for property and real estate developers.

 

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About the author

Mr. Sina is the Managing Partner & Chief Editor of RwandaEye. After completing his post-graduation from the Faculty of Economics and Management, National University of Rwanda,he worked in various consulting capacities for equity and business firms in Kigali. A shrewd strategist, he is an Economic Pundit, entrepreneur and Investment Banker.

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