Red tape hurting business, says PSF

Despite the government’s efforts to promote investment, red tape remains one of the challenges frustrating both local and foreign investors, the Senatorial Standing Committee on Economic Development and Finance heard.
An RDB staffer guides a client on how to register business online. / File
An RDB staffer guides a client on how to register business online. / File

Despite the government’s efforts to promote investment, red tape remains one of the challenges frustrating both local and foreign investors, the Senatorial Standing Committee on Economic Development and Finance heard.

The Private Sector Federation (PSF) Chief Operations Officer, Yvette Mukarwema, told Senators that though Rwanda Development Board (RDB) is doing its best with a one-stop centre, the issue of industries is still not fully uncoordinated.

To illustrate her point, Mukarwema cited an investor who has spent more than one year trying to negotiate a deal to build a hydro-power plant but until now, he has not received any feedback.

She explained that though due diligence was done and approved, they have failed to move from the negotiation level.

“The issue is that there are so many people that have to decide that in the end, so much time is lost. They have to go through different levels that are supposed to provide input, that require agreeing on before signing etc. Spending two years on a project then after that having to go to WASAC for water, then RDB which promises to work on it and a year elapses and later being told that the Ministry of Finance must be consulted is discouraging,” she said.

She also suggested the need for incentives, saying that though Rwanda had a geographical advantage, there was need to boost incentives given to investors if the country is to benefit.

“Let us not give incentives of just five years yet that’s when a factory is just beginning to find its footing. Let us think of long term incentives like 15 years because at the end of the day, they are not going to take the industry out of the country and they will be employing our people, they can produce specifically for export so that they do not compete with those that are paying taxes,” she said.

The PSF Chief Executive Officer, Stephen Ruzibiza, chipped in, saying that there was need to focus on the country’s resources that have potential, including farming, construction and furniture.

He pointed out the importance of institutions working hand-in-hand to avoid costing the government money.

“Government incurs losses because of its failure to consult the private sector. Before you award a tender, it is important for you to come to us and check if indeed this person has the ability that he says he has because we are the ones who deal with them on a daily basis,” he said.

Senator Evariste Bizimana said that one of the remedies for this was to find a way how PSF, the Ministry of Trade and Industry and RDB could work hand-in-hand on everything concerning investment.

“I don’t understand why these three institutions don’t work together because they are all directly involved in this. How are you supposed to reduce on the percentage of imports if you are not working together the way you are supposed to?” he wondered.

When contacted for a comment, RDB’s Acting Head of Investment Winifred Ngangure Kabega told The New Times Tuesday that her institution is trying its best to ease the business process as stipulated in the investment law.

“Coordination with other stakeholders is also improving as the business environment is getting more dynamic,” she added.

In regards to the one-stop centre, she said there are several desks in place, such as migration, utility desk and the environmental impact assessment to ensure that the process is smooth.

These, she said, work closely with the incentives management and aftercare service to follow up on investments registered to ensure that all hurdles are addressed.

Though Kabega admitted that there was need for improvement, she said that additional agencies like the Rwanda Standards Board had come on board to ensure that factories that are being set up are aware of the required standards and certification for an industry.

editorial@newtimes.co.rw

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