Jali Club, a state owned recreation park, has been sold to Chinese investors who are planning to construct a five star hotel worth $40 million (Frw21.8billion).
Century Development Company is expected to start developing the hotel early next year targeting high end tourists.
Clare Akamanzi, Deputy Director General of Rwanda Investment and Export Promotion Agency (RIEPA), said a memorandum of understanding was signed between Century Development Company and Kigali City to be offered two hectares around Jali Club and Rwanda Television (TVR).
Akamanzi said expropriation has not yet been decided because it is not yet clear where the two hectares will cover. The architecture design is currently being drawn and is expected to be complete in six months.
“It’s the architecture design that will identify who is to be expropriated and when because we are not quite sure whether two hectares would cover up Jali Club and Rwanda Television buildings,” Akamanzi said.
This is only one of many recent projects by Chinese investors in Rwanda.
Yi Zonghua, Economic and Commercial Counselor at the Chinese embassy in Kigali said the exact dollar figure for Chinese investments in the country is difficult to ascertain because private investors do not go through the embassy for assistance.
He said the relationship between the two governments, however, “has been really good.” Noting, there are many small investors here who have opened shops or restaurants, and large investments such as the recent entry of Star Africa Media on the pay TV front.
“That’s quite large,” Zonghua said, adding that the initial investment was for $20 million (Frw10.9 billion).
Star Africa Media chief executive officer Xie Ken recently told The New Times that its arrival on the scene has not only boosted the pay TV industry, but has also tightened the competition in Rwanda by bringing the number of pay TV companies to three.
The current outlets are DSTV, GTV and Star Africa Media.
Star Africa Media, which started its operation in Rwanda in June this year, has so far registered 400 customers. Ken told The New Times that he is positive of the company’s success.
“This is a very good number, it shows people really need our services especially the mid- and low-income earners, who cannot afford the prices of other pay TVs and they have put trust in us,” he said, adding they are working on diversifying content.
Zonghua said this investment will duly benefit China and Rwanda. For Rwandans, he said, they will have more choice and another means of information from around the globe.
For China, not only will Star gain revenue, but it will also “make themselves experienced in the African market, especially in the high technology field.”
A second project, for which the Chinese government is considering providing funding, is 40 kilometres of road upgrades in Kigali worth more than $25 million (Frw13.6 billion).
The China Road and Bridge Corporation is currently evaluating the project and Zonghua said he expects negotiations to be completed this month.
According to a report that was released by the Chinese embassy in Kigali recently, trade between the two nations has increased 45 per cent and the volume of trade increased by 38.6 per cent at the end of 2007.
The size of Chinese exports to Rwanda also grew to $22 million at the end of last year.
At a lecture to staff and students at the National University of Singapore (NUS) in May, President Paul Kagame said that globalisation has helped to increase foreign direct investment in Africa to $39 billion (Frw21.2 trillion) between 2004 and 2006.
“We are convinced that private investment is the real basis for economic growth, greater prosperity and improved lives,” he said in Singapore.
“Success on this front certainly demands relentless and focused efforts at dispelling the misconception that paint our country and continent as unfit for business.”
Kagame noted that following a 2006 China-Africa free trade agreement, Chinese investment has grown to $12 billion (Frw6.5 trillion).
“Mr. Kagame explained that an equally important growth benchmark is that in Africa enterprises are no longer just state monopolies or limited to industries that extract raw materials, as had been in the past,” NUS wrote on its website.
“These companies are now led by entrepreneurs and are to be found in telecommunications, financial services, construction, transportation as well as emerging industries such as media and leisure.”
Zonghua said China is interested in investing in Rwanda for three reasons: to strengthen the political relationship between the countries, to help Rwanda develop its national economy and to help fund new markets in each country.
“I cannot and I should not say whether it is important for China to enter the Rwandan market or whether it is important for Rwanda to receive Chinese aid, but basically speaking this is something mutual,” he said.
For example, Zonghua said, the Rwandan economy is steadily growing at six per cent per year which means there will be good returns for Chinese companies that invest here.
At the same time, he said, Rwanda is largely an agricultural-based economy which can provide food exports to China.
“The future for the two countries in cooperation in economic and commercial fields, according to my own experience, will be quite good,” he said. “We call it mutual help.”