Rwanda’s huge infrastructure gap, particularly, in areas of energy and transportation dampens private sector productivity and are a major obstacle to attracting private investment into the country, a senior World Bank official has said.
Addressing a press briefing, yesterday, Obiageli Ezekwesili, Vice President for the World Bank’s Africa Region, underscored that addressing these gaps is critical to raising the country’s potential to attract private investment that the country so badly needs to sustain economic growth and reduce poverty.
“You can have the regulatory framework, policy environment very attractive but the fact is that investors have many countries that they could choose to go to and they see many opportunities. What would make a particular economy extra-ordinary attractive would be much more than just the basics,” Ezekwesili said.
Ezekwesili was in the country to help catalyze support for increased investments in Rwanda’s private sector.
“Rwanda has a good record upon which it needs to build – by pursuing the right kind of policies over the last decade, it has been able to position itself as an economy that can grow,” she added.
Referring to creating an enabling business environment as a basic, Ezekwesili challenged Government to focus on making the country more competitive for investors beyond what has been achieved so far, as highlighted by the World Bank’s Doing Business report.
For the second year running, Rwanda has been ranked among one of the world’s top reformers in a World Bank report, released yesterday.
The country was ranked the 2nd best reformer in doing business moving up 12 places, only beaten by Kazakhstan.
“The basics are that we have an improving business climate but there are other lots of considerations.
The cost of doing business in Rwanda is still high. Investors are still going to be looking at the issue of the markets -the regional perspective of markets would make Rwanda attractive,” Ezekwesili said.
She added that the country has to leverage regional integration as it makes, “Rwanda attractive and recognizable.”
While Rwanda has demonstrated that it is transforming itself to be the preferred investment destination through sustained commitment to reforms, the Vice President stressed, bridging the infrastructure gap will be critical to attracting investors.
“Investing in infrastructure to reduce the cost of doing business, whether it is in energy, water, roads, in basic systems that any private sector would like to have in order to do its work, is going to be a critical part of competitiveness,” Ezekwesili said.
According to World Bank, the estimated cost of bringing sub-Saharan Africa’s low-income countries’ infrastructure up to the level of other low-income countries and maintaining it ranges from 10–30 percent of current Gross Domestic Product (GDP).
However, while most of the funding comes from development assistance, the Bank saysm, it remains insufficient.
The official also noted that the Bank has taken a “more deliberate approach” of showcasing opportunities to investors in some sectors, such tea and horticulture, to compliment Government efforts in enhancing competitiveness.
“We are bringing the World Bank group platform to basically showcase these opportunities to investors around the world concerning Rwanda- showing them that policy and competitiveness and the environment really work together to make Rwanda a place that they should consider.”