ISTANBUL - Based on the business reforms that the country has enforced to improve its business climate, Rwanda is most favoured among her African counterparts to attract Foreign Direct Investments (FDIs), the World Bank Africa Region Vice President, Obiageli Ezekwesili has said.
This follows Rwanda’s recent ranking as “World’s top reformer” in this year’s Doing Business report by the World Bank.
While it is the first time an African country has received the title, as the global economy takes shape Rwanda is better placed to attract foreign investment as business environment is stable.
“We are very proud of Rwanda for coming top on ‘Doing Business’ rankings report of the World Bank because they embarked on those reforms of improving the investment environment,” Ezekwesili said, during a reception for African Journalists attending the World Bank/IMF Annual Meetings on Monday.
”We are saying to countries that if you maintain with this reforms, when foreign direct investments comes back , investors will see your country as an attractive investment destination,” she added.
Ezekewesili emphasized that recovery of the global economy is still fragile; as such investors are extremely keen on doing business in a very conducive environment giving Rwanda a comparative advantage.
“This is not the time when investors are going to say it is “so-so” (medium) environment, we can go try, no! They do not have resources to go into that kind of environment anymore. They are going to be looking for where there is quality business environment,” she said.
An improved business environment can directly lead to increased investment, job creation, and poverty reduction.
The reforms measured by Doing Business can also play an important role in enabling countries to recover from the economic crisis.
“Let know no one deceive you, recovery is still fragile but Africa needs to prepare itself for when the recovery will begin to strengthen.
When it begins to strengthen, countries ready will take advantage of this,” Ezekwesili said, stressing the need for African governments to sustain business reforms.
In a parallel interview with Business Times, Ezekwesili urged government to continue deepening the reforms as they will facilitate economic growth.
“Projections for Rwanda’s economic growth are still among the best on the Continent. Deepening these reforms is critical for the country to sustain economic growth,” she added.
Growth in Africa, which had accelerated from 3.1 percent in 2000 to 6.1 percent in 2007 she said, is now projected at only 1.7 percent for 2009.
This is down from the projected 6.4 percent, and far below the average growth rates of 5.3 percent posted by the continent’s 15 best performing countries, Rwanda inclusive.
Ezekwesili also noted that the global economic crisis hit in the wake of the food and fuel crisis in 2007-2008, is having a major impact on African countries through decline in commodity prices, tourism earnings, exports, remittances and private capitals flows.
Remittance inflows, which were about $20 billion a year to the region before the crisis, have fallen by 4 percent to 6 percent. Private capital flows which had surged to $53 billion in 2007 and were financing much needed infrastructure and commodity based investments fell by 40 percent in the second year of this year.
“It is important that development institutions like ourselves and bilateral partners, multilateral organizations like our sister organizations like the African Development Bank and the IMF and other European Union and Commission focus on those aspects of responding to the impact of the crisis in low income countries majority of which are in Africa.”
The bank’s lending to the region has increased by 44.3percent this year to $8.2 billion.