WEF lauds Rwanda’s fiscal discipline, friendly business environment

Rwanda Development Board (RBD) notes that the competitive investment climate in the country is supported by a stable macroeconomic landscape that boasts one of the highest growth rates in the world.

The EAC bloc member, which aspires to be a middle income economy by 2020, also offers abundant investment opportunities in a wide ranging spectrum of sectors.

RDB says sectors that offer most lucrative business and commercial opportunities include agriculture, manufacturing, real estate and construction as well as financial services.

Others are mining, infrastructure development and education especially in technical and vocational training. Higher education, research and ICT studies are other key investment opportunities.

Having exorcised the ghost of the genocide, Rwanda’s current peaceful environment and overall security are also its other competitive edges.

“The Gallup global report for 2015 ranked Rwanda as the safest place to walk at night in Africa and the 5th safest country in the world,” RDB notes in the Investor Infopack distributed at the World Economic Forum on Africa (WEF-2016).

Rwanda was also applauded at the summit for its liberal visa policies that have enabled it to attract huge investments and position itself as a preferred conference destination in the region.

RDB figures show that in 2015, conference visitors were about 26,000, a 36 per cent increase on the previous year when about 19,000 delegates were hosted.

Analysts say the ease in visa openness is helping the tiny landlocked country remain on course on its goal to be a middle income economy by 2020.

It is estimated that cross border trade between Rwanda and her neighbours has increased by 50 per cent while the EAC single tourist visa enabled Rwanda increase tourist arrivals by 17 per cent in 2015.

GDP growth has consistently averaged about eight per cent with RDB Chief Executive Officer Francis Gatare saying the target is to increase it to 10 per cent in the medium term.

“In fact, over the last 15 years, Rwanda has featured among the fastest-growing economies. In the last 10 years alone, we have had an economy registering, on average, eight per cent growth of GDP. We have seen that translate into the per capita income of our citizens increasing by more than 400 per cent,” Gatare said at the WEF summit.

The World Economic Forum (WEF)’s global competitive report released in July 2015 ranked Rwanda the best efficiently governed country in Africa and 7th globally, with minimal waste in government spending.

The Global Information Technology Report of 2015 ranked the country as the first in the world in the promotion of digital technologies.

Rwanda has managed to keep inflation at a single digit since 2008 and the country has been one of the most resilient to external shocks in sub-Saharan Africa.

Finance and Economic Planning minister Claver Gatete said that the diversity of its economy has seen it put on a brave face on the fiscal shocks of the commodities crunch.

It is also one of the top reformers in the books of the World Bank. RDB says that these rankings have positioned the country to be the easiest place to do business in the EAC bloc and second in Africa.

The new Paying Taxes 2016 report ranks it top in the region in terms of total taxes as a percentage of commercial profits, the time it takes to comply and the number of payments businesses are required to make annually. It is ranked 48th globally followed by Kenya (101), Uganda (105) and Burundi (111) while at 150th position, Tanzania takes up the rear on the global ladder.

“We aim to achieve more than 30 per cent of private-sector investments into the economy by 2020. We have a target of growing private investment by a factor of 20 per cent on an annual basis to reach the kind of targets we have set for ourselves,” CEO Gatare noted.

“Rwanda has 12 million people within a larger environment of an East African community of 145 million people. So, what previously had been seen as a small economy has now become a large economy that is attracting businesses into the country as a way to also assert itself in the wider East African Community,” he added.

“By making Rwanda a core advocate of regional integration, and also being seen to participate actively in that, we have expanded the market reach for any business that comes into Rwanda.”

Fiscal incentives it offers investors include zero corporate income tax for companies planning to relocate headquarters to the country and an exemption of capital gains tax. Strategic investors in energy, transport, affordable housing, ICT and financial services enjoy 15 per cent preferential corporate income tax.

There is also repatriation of capital and assets as well as seven-year corporate income tax for large projects in other strategic sectors such as exports, tourism, health and manufacturing.

Non-fiscal incentives are quick business and investment online registration, assistance with tax-related services and exemptions as well as assistance to access utility water and electricity services.

In the list too, are assistance with obtaining visas and work permits, one-stop centre that provides notary services and provision of aftercare services to fast track project implementation.