The Government of Rwanda’s Vision 2020 aims for Rwanda to be a middle income country by 2020 and over last decade, the government of Rwanda has made a major push for investment and diversification of the economy by making it investor friendly.
In doing Business, Rwanda was ranked 62/189, first in East Africa; repeatedly voted as the best global reformer.
This was because of the many reforms that have been put in place to create a conducive business environment, combined with a range of various fiscal and non-fiscal incentives offered to the private sector. Incentives vary from free duty importation of machinery, equipment and raw materials; 0% corporate income tax for companies planning to relocate their headquarters to Rwanda and aftercare services to facilitate investment projects even after registration.
The importance of infrastructure in the development of a competitive private sector in agriculture was not left out. An example is the investments made in feeder roads, irrigation schemes, post-harvest handling facilities and the Kigali Special Economic Zone among others.
Rwanda’s abundant rainfall, temperate climate and rich volcanic soils offer ideal conditions for investment in agriculture
Today more than nine airlines are now offering regular service from Kigali to major global and regional hubs plus the fact that on all major global indices of competitiveness and governance, Rwanda ranks top in the region.
The government of Rwanda at all levels is committed to facilitating private investment in the economy and factor costs are competitive, with abundant rural labour, low land-lease rates, ample water resources for irrigation, and improving transport and power costs.
Investors should embrace the newly developed Agricultural Land Lease Client Charter along with standard Contract & Corporate Farming Models - streamlining the process of leasing land for agricultural use.
Dairy Production & Processing
Invest in dairy production and processing and take advantage of Rwanda’s conditions and serve a growing and under-served middle-class in the EAC. In the past 10 years, the total production has increased (189,827 MT in 2007 to 706,030 MT in 2014) and the demand for dairy products consumption has outstripped the local production.
The average import is 1898 tons of dairy products per year while the average export is 4.8MT per year.
Demand for milk currently exceeds supply. The potential estimated demand (Kigali Market) for pasteurized milk products is 680,000 L/day, with sales estimates of 83,000 L/day.
Rwanda produces 2,100,000 liters of milk daily (and increasing), 15% of which finds its way into the formal market.
Demand in urban and suburban markets for good quality fresh milk is unsatisfied with vendors normally running out of supply by the middle of a business day and vendors earn over 100% return annually.
Regional markets in Burundi and DRC absorb 75,000 liters daily of low quality, poorly processed fermented milk and yoghurt from Rwanda which could be produced, packaged and delivered cold at lower cost by a modern facility than the artisanal products.
The market of over 10 million people with a rapidly growing middle class plus free repatriation of capital and profits for foreign investors is an added advantage.
Also the availability of electricity, water and road infrastructure for collection and processing, the supportive governmental institutions plus being strategically located close to underserved high value markets in DRC and Burundi are all favourable reasons for investment.
Horticulture Production for Export
There is a big opportunity to invest in horticulture production by taking advantage of Rwanda’s excellent growing conditions to serve unmet growing year around demand in EU and Middle East market.
While demand in the main importing regions (EU, North America) remains flat, domestic production is declining, this together with changing consumer preferences favors imports from equatorial regions.
Rwanda is well placed to serve growing global, regional and local demand for fruit, flowers and vegetables.
There also happens to be high government ambition in the horticulture sector. The Government targets to increase exports from $ 6m today to $140m by 2020.
“For this target to be achieved, it will require 10-20 medium sized exporters and Production on 2000 ha of nucleus farms with 6000 ha out grower schemes within the next 5 years” Kayonga said
Identified competitive commodities include beans (fine and extra-fine French beans) and peas (sugar snaps, snow peas, while horticulture specialties are baby corn, chilli, mini leek, African eggplants, mushrooms, herbs etc) plus “Exotic fruits” (tamarillo, kamaramasenge/apple bananas, passion fruit, avocados and flowers.
Horticulture sector is still nascent in Rwanda, but in the last 2 years we have seen sizeable air shipments to the EU, lower freight rates and new investors have started exporting from Rwanda (predominantly beans and chilis.
Also the first commercial avocado plantations are expected to produce 600 tons per year avocado exports by 2018 from the two farms plus 14 million stems of roses expected to be exported from GishaliFlower Parkand 4 million stems of summer flowers expected to be exported from Rulindo flower project in 2016
Investment opportunities in the animal feeds sector
Investing in the production of Animal Feeds in Rwanda is an advantage because of the country’s increasing demand for them. Livestock development sub-sector in Rwanda contributes about 10% to the GDP and about 3% of the agricultural GDP with about 65% families raise some type of livestock.
Countrywide, the number of livestock population has been significantly increasing from 2005 to 2014. In the ten years from 2005 to 2014, the number of cattle increased from 1,006,572 to 1,143,553, poultry from 2,841,399 to 4,916,837, pigs from 326,652 to 989,316, goats from 1,263,962 to 2,672,751 and rabbits from 643,927 to 1,203,485
There are tacit indications of increasing demand for animal products that attracts private sector investments in quality commercial feed production for marketing especially in peri-urban poultry and piggery production.
There is an increasing demand for quality animal feeds accentuated by increased numbers of improved breeds which calls for investment in this sector.
Also there is promising interests in animal nutrition extension by some NGOs notably ICRAF and HPI plus a wide range forage species, crop residues and agro-industrial products potentially valuable feed resources and very limited competition here.
The One Cow per Poor Family programme continues to distribute cows to poor families to raise rural household’s incomes and increase in milk production
Institutional support for aggressive animal genetic improvement program plus the favorable climate for lush forage production most of the year should create increasing demand for quality feeds.
Another advantage is the competent nutrition laboratory in RAB that can provide quality assurance services to the private sector and Rwanda Standards Board (RSB) and availability of feed specification booklets at RSB for poultry feeds and dairy meal concentrates for quality assurance.
Poultry Products for local & regional markets
In Rwanda, meat consumption per person per year is estimated at 7.9 kg/ year (2014) and shows an increase from 5.6 kg/year in 2006. Egg consumption was estimated at 0.63 kg per year in 2014 from 0.2kg of 2006.
Rwanda’s advantage here is that the poultry population amounted to 4, 916,837 in 2014 and the total poultry meat produced increased from 7,379MT in 2005 to 16,304MT in 2014.
Another advantage is the new land policy with aim to secure land tenure to encourage investments in farming and the country’s 2017 target of making the poultry industry a flagship of the Rwandan livestock.
The trend of the last 10 years shows thatalthough the production of meat and eggs increased regularly, more eggs are imported than locally produced. In 2012, it was estimated that 900,000 table eggs were imported weekly.
The growing tourism sector which requests quality chicken and egg products calls for investors in this sector.
Pork Products for local & regional markets
In Rwanda, the percentage of livestock-owning households rearing pigs is estimated at 31.9% (EICV 4) from 22.9% of the EICV 2 report. Investing in Piggery is an advantage considering the growing market in Rwanda
Pork meat production in Rwanda more than doubled in the last 10 years, where it increased from 3,585MT in 2005 to 10,210MT in 2014 making the pig population to amount to 1,014,629 in 2014 from 326,652 that we had in 2005
In Rwanda, the stable political environment and strong government support for growth of agriculture and livestock plus the new land policy which aims at securing land tenure encourages investments in livestock.
Also the trend of the last 10 years shows that the production of pork meat increased regularly meaning there is an increasing demand for pork products particularly in Kigali city which should be taken advantage of.
The East African Community and the Great Lakes regions are good potential markets for pork products and the substantial expatriate community in Kigali creates demand for quality products including pork products
Invest in Fishery and Aquaculture and take advantage of a growing market!
Rwanda’s imports of fish amounted to 60,000MT (2007) while the production increased from 9,117 MT in 2007 to 30,000MT in 2015.By 2020, Rwandan projection is 155,000MT of fish nationally.
Rwanda’s fish market demand consists of Tilapia (90%), 5% of Sambaza and 5% of other fish like Cat fish.
Located centrally bordering 3 countries in East Africa, Rwanda has the advantage of a Custom Union and a Common Market that has been in formation since 2010 for 125 million people.
Rwanda is quickly becoming an active redistribution platform towards neighboring countries due to zero corruption and highly inductive business environment, favorable weather, natural water resources and efficient manpower.
About 8%of of the country covered by water with lakes of 128,000 Ha, rivers 7,260 Ha and has wetlands and valleys of 77,000Ha. This makes it a very good investment destination for fish and aquaculture.
The country has over 25 lakes, mostly located in Eastern Province; Lake Kivu is the largest with 2,700 Km2 in size and presents the best conditions for fish farming in cages for its water temperature is 250C all year round with dissolved Oxygen in the 10m layer of 8ppm
The fish industry is still in its infant stage but growing fast in the country. Presently fish farming is being carried out on 218 Ha and 718 cages operating in over 186 cooperatives with a membership of up to 6269 people of which 2,551 are women.
Investment opportunities in the irrigation sector
Rwanda has identified and mapped 589,000ha potential irrigation area for both hillside and marshland development thus making investment in irrigated development and agro-processing in Rwanda an advantage considering the increasing world demand for crop commodities.
Rwanda offers a unique opportunity for contract farming on grains and pulses because of its huge potential of approximately (96%)free land for irrigation development with 24000ha of developed schemes,
The Government Policy on 45 year Land lease Rwanda offers attractive opportunities for “greenfield” leases for long term private investment in irrigation infrastructure development
Rwanda is blessed with abundant water resources in its lakes and rivers with reliable recharge capacity and with diurnal temperatures of 20-25 degrees Celsius, Rwanda offers excellent conditions for production of high value exportable irrigated cash crops such as geraniums, ginger and fruit banana.
Also Rwanda’s central location in East Africa provides easy access to the regional commodity market.
Tremendous prospects for irrigation infrastructure development under PPP and Joint venture investments exist in Rwanda.
So with capital investment from USD8,000/ha on irrigation infrastructure development, the investor can expect returns of 15% with a payback period of 4 years.
As of now, there are investment opportunities from USD 5million for agro -processing of irrigated produce
Investment opportunities in the Sericulture Sector
Investment in the Sericulture sector is an advantage because of the emerging Silk market. Currently the area under cultivation of 953 Ha is mostly made of small scale farms, planned to be increased to 5,000 Ha by 2020.
The sericulture sector has been identified as one of the promising agricultural enterprises suitable for rural development, in income generation and employment creation; in diversification and expansion of the export sector.
The annual cocoons production of less than 10 tones, are under plan to be increased to 300 MT by 2017. The National Sericulture Centre (NSC), has four sericulture provincial centers and one sub-center in Rusizi with 27 active sericulture cooperatives.
The Government of Rwanda is working hard to upgrade silkworm stock through germ plasm enrichment with robust and high yielding races adaptable to Rwandan conditions that provide almost constant temperatures of 20-28 degree Celsius throughout the year.
Field temperatures of 20-35 degree Celsius with consistent distribution of rainfall between 1,200 – 1,700 mm/year is good for mulberry cultivation and are excellent conditions for rearing silkworm
The Government plans to upgrade the existing 3 centers into Cocoons Production Centers at an estimated investment of Frw318, set up a Reeling factory investments USD 2,514,832 and also put in place a total of 12 Cocoons Production Centers in the next 5 years at an estimated Investments of Frw 4,026 Million. These are good investment opportunities for the private sector to take advantage of this emerging market.
Invest in developed terraced land for production of high value crops
The Developed terraces allow movements of power tillers and machinery in and around the fields for modernized agriculture.
In Rwanda, about 92,882 Ha were developed under radical terraces and 901,752 Ha under progressive terraces that need optimal exploitation
The available storage facilities and drying areas to minimize post-harvest losses and improve on the quality of the produce make it worth investing in this area.
Terraced land has greenhouse gas mitigation potential due to reduced erosional loss of soil carbon and Rwanda’s abundant rainfall, temperate climate and rich volcanic soils offer ideal conditions for growing a wide range of crops.
On all major global indices of competitiveness and governance, Rwanda ranks top in the region plus the government at all levels is committed to facilitating private investment in the economy.
Factor costs are competitive, with abundant rural labor, low land-lease rates, ample water resources for irrigation, and improving transport and power costs. Terraced lands present the potential for growing food crops especially grains and tubers for both local consumption and export.