Reforms on ‘Doing Business’ fuels investments in 2009
Following closely on being voted as a top business reformer, Rwanda’s Foreign Direct Investments (FDIs) have continued to register a positive growth.
As we enter into the New Year officials say that the country’s integration to regional economic blocs such as the East African Community (EAC) has served to attract FDIs amounting to over $600 million for the year 2009.
Clare Akamanzi, the Deputy CEO of Business Operations at Rwanda Development Board (RDB) told Business Times that Rwanda registered investments worth $1.1 billion (both local and foreign) as of 20th December 2009.
RDB says that a total of 106 investment projects both local and foreign were registered which are expected to create 11,797 jobs. Among these RDB says that 58 projects are already operational representing 54.7 percent, with an estimated level of investment worth $990 million while 48 others representing 45.3 percent are not yet operational with an estimated value of $134 million.
This means that out of the entire basket of total investments registered in 2009, 34 registered projects are principally FDIs representing 47.7 percent of the total registered investments with a value of $536 million.
Additionally 3 projects were undertaken by the diaspora’s community members with an investment value of $9 million. Another 59 registered projects are local, representing 52.3 percent in terms of investment value which are expected to create 8,000 jobs.
Joint venture projects between local business and foreign communities, according to information availed are 9.4 percent with a total of 10 investment projects with investment values of $105 million.
Comparing 2008 and 2009, in terms of the value of projects registered, RDB says that Rwanda registered a 39.96 percent increment.
However in terms of the number of projects, there was a slight decline of 9.4 percent from 117 projects in 2008 to 106 projects in 2009 as of 20th December 2009.
The Financial Times Group while compiling data for FDIs into Africa said that in compiling data involving 59 African countries, judges were impressed with Rwanda which was placed a ‘top destination for foreign investors in Africa in terms of cost effectiveness’.
Along with Ghana and Malawi the report said that Rwanda ‘had cost advantages with regard to registering a property, office and industrial costs, as well as having low minimum wages’.
“When we started 2009 amidst the global financial crisis, we knew that mobilizing capital for investments was going to be tougher than before. However, we have done much better than we expected with a significant increase of almost 40 percent in the value of investments registered, although we have seen a slight decline in the number of projects registered by about 9 percent ”,Clare Akamanzi added.
RDB consequently hopes that for Rwanda the year 2010 will focus on increasing the investment levels even more through improving the investment climate with the aim of making the time and cost of doing business in Rwanda, much easier.
RDB projections for FDIs for the year 2009 have been largely surpassed. Some projects were affected by the spills of the global financial crisis. Some projects like that registered by Dubai World in 2007 were scaled down.
So far, Marriott a reputable global hospitality brand has stepped in to fill the void left by Dubai World. Marriott was appointed in 2009 by a consortium of investors into Rwanda from other sources to oversee construction and then management of a new five-star hotel on the same spot where Dubai World was to invest. This is what has been registered by RDB as the Century Hotel project.
Consequently, the government expects that investments would boost the economy which is expected to grow by 8 percent in 2010.