MPs on the Standing Committee on Economy and Trade, yesterday, toured the Kigali Special Economic Zone and Export Processing Zone at Kigali International Airport to acquaint themselves with investment and manufacturing situation on the ground. 

The tour comes as lawmakers seek to amend the law on investment promotion in the country, which will among others, extend more incentives to investors.

The parliamentary committee is making final amendment on the draft law, expected to be passed later next month, according to Connie Bwiza, the chairperson.

The amendment of the law aims at facilitating private sector development, which is among the objectives underlined in the country’s Vision 2020.

Speaking to journalists, Connie Bwiza, the committee chairperson, said the investment incentives are expected to reduce the country’s trade imbalance.

"We want to see how best and fast we can amend the law to promote investment in the country,” Bwiza said.

It is understood that the current investment promotion law, enacted in 2005, was designed to attract investment and promote exports, but did not include clear incentives for priority sectors.

But the draft law provides for more incentives in priority sectors such as energy, manufacturing, agriculture and tourism.

Some of the incentives will be a preferential corporate tax of 15 per cent, mainly in energy, tourism and manufacturing.

Investors decry high water, energy charges

Belo Adewumi, the finance and operations manager at Airline Services and Logistics (ASL), told legislators that despite the good market and government good will toward investment promotion, their business is still faced by high rates of water and energy.

Three months old in Rwanda, ASL provides services such as Lounge and Restaurants operations to RwandAir and the Royal Dutch Airlines-KLM. It also manages Duty Free outlets.

"The situation has been so good, we are increasingly getting more clients, but water and electricity charges are quite high, which is a challenge,” Adewumi said.

Established in 1996 to provide catering and related services to airlines operating within the Nigerian aviation industry, ASL has since worked with a number of major airlines such as Emirates, Qatar, Air France, Lufthansa, Kenya Airways, Delta Airlines and South African and British Airways among others.

MP Bwiza noted that one of the main factors for the amendment of the law was to encourage investment in the energy sector, which would increase electricity generation.

Bwiza’s comments were echoed by Joseph Mpunga, the head of Investment implementation at the Rwanda Development Board (RDB).

"There are several projects coming up that will help increase the amount of energy on the national grid. This will reduce the cost of electricity,” Mpunga said.

Defending the Bill before the parliamentary committee, last year, Francis Gatare, the RDB chief executive officer, said the proposed incentives will, among others, help government to achieve its energy target of at least 563MW on the national grid by 2017. The country currently produces 155MW.

Management of ASL says they intend to have between five and six airlines served by the end of the year.

The arrival of ASL in Rwanda is expected to boost the small Rwandan Airlines Catering market as well as food processing export sector.

The new legislation will particularly provide for a 50 per cent reduction in preferential corporate tax for investments in the priority sector – up from the current 30 per cent.

The new law will also provide clearly defined tax holidays of up to seven years depending on which sector one has invested in and how much is involved.

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