Milan city where the symposium is being held

An investment symposium opens this Thursday (June 13) in the Italian city of Milan at which Rwandan officials will showcase the country’s business opportunities.

Organized by Rwanda’s Consulate in Milan and the Rwanda Development Board, the symposium will host Italian business leaders at the Milan Chamber of Commerce. The event was organized in collaboration with Promos, an agency of the Milan Chamber of Commerce in charge of promoting international trade.

“With about 11 million inhabitants with a high literacy level, Rwanda is experiencing a time of great socio-cultural and economic expansion (economic growth among the highest 7-8% per annum),” said Enrico Morra Lalia, the Honorary Consul of Rwanda in Milan, in a statement.

“The level of social development, culture and infrastructure is far superior to all the countries of sub-Saharan region of reference”.

The organisers of the symposium will display the country’s opportunities in Infrastructure, Trade, Tourism and Investment in general.

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The signing of the memorandum of agreements for the project was on Tuesday 28 may 2013 between the governments of Rwanda represented by the Ministry of sports and culture Protais Mitali and Mustafa Cem-Ozdemir, the international development officer at Babilaks.

 Babilaks representative in Rwanda Mr. Erick Rutayisire said the stadium with capacity to host 40.000 people will be built in Gahanga-Kigali

“This 40.000 seat stadium to be built in Gahanga shall be completed before 2016 in order to host the African Nations Championship (CHAN)” He said.

To be a leader with its concept of high-quality service in projects, the stadium project at Gahanga will also include a manmade lake, Park, Hotel, conference halls, shopping mall and other various training facilities.

According to Mustafa, the international development officer at Babilaks, the stadium project and its surroundings will be among the first successful public private partnerships in the country.

Mustafa said “ Babilaks promise to deliver a first class and beautiful stadium meeting FIFA standards”.

Mr. Mustafa pointed out that the company chose Kigali to host its African headquarters because of its safety and the favorable environment for investment provided by the government of Rwanda.

Babil grup has projects in Azerbaijan, Russia, United Arab Emirates, Cote d’ivoire, Congo Brazaville, Iraq and its international headquarters located in Istanbul, the capital city of Turkey.

The group of companies, operating in the areas of tourism and construction since 2004, gathered under the brand BABIL GROUP in 2011 and increased its areas of operation including Rwanda.

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 A new greenhouse technology project dubbed Smart Adaptive Sustainable Horticulture (SMASH) has come into play to intensively be implemented with high technology use and appropriately designed greenhouses to ensure high productivity per square kilometer.

The project will run for four years and will be sponsored by the Netherlands government through its agriculture support programmes to Rwanda. The ministry of agriculture will sign the MoU with all partners in the project in June 2013 and the project will start to operate in November 2013.

The project comes at a time when greenhouse technology is slowly gaining recognition between different state and non state actors and its introduction is revolutionizing the agriculture sector in the country.

Rwanda Agriculture Board in collaboration with different actors is ensuring full technical support as well as offering essential services to the beneficiaries in promoting of this new technology.

The Ministry of Agriculture facilitates interested farmers to adopt greenhouse farming and farmers have been urged to embrace green house technology but there are few companies in Rwanda that provide this technology. Balton Rwanda is one of the sole suppliers of such technology (Amiran farmer’s Kit) in Rwanda.

However, the farmers who currently use the technology have managed to benefit from it and Innocent Ukizuru, an agricultural officer in charge of Rwamagana District, says that the technology had proved successful in some parts of the country.

Ukizuru also states that the technology works perfectly with horticultural crops such as tomatoes, carrots among others, and can produce good yields.

“Farmers shouldn’t shy away from the technology on the pretext that it is expensive. One green house which can be constructed at a cost of Rwf 1.5m produces double the amount per year when utilized properly,” he told farmers.

Theophile Kayigi, a tomato grower, admits that farmers’ traditional ways of growing crops had to change. He said farmers had to embrace the new technology to make profits in a competitive global market.

“The knowledge I gathered about farming, drove me to think that the majority of vegetable growers are using a lot of energy with minimum output,” the farmer said.

Another farmer Laurent Hakizimana has managed to build a mansion in Kigali city, raise his children in good schools and also invest more in the equipment and technology. Today, Hakizimana’s dreams are set on buying more kits (at least five)- to meet his market demand for tomatoes and purchasing a chicken incubator- which will increase the number of chicks in his farm to at least 10.000 chickens.

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On the first day of an historic joint United Nations/World Bank Group mission to the Great Lakes region, the World Bank Group announced $1 billion in proposed new funding to help countries in the region.

The funding will provide better health and education services, generate more cross-border trade, and fund hydroelectricity projects in support of the Great Lakes peace agreement that was signed by 11 countries in February, this year.

The announcement was made ahead of the World Bank Group’s President Dr. Jim Yong Kim, who is currently traveling with the UN Secretary General, Ban Ki-moon, on a three-day trip to the Democratic Republic of Congo (DRC), Rwanda, and Uganda,

Kim said that a secure and developed Great Lakes region was vital to Africa’s efforts to dramatically reduce extreme poverty and create prosperity for millions who have had little economic opportunity.

“We made extraordinary efforts to secure an additional $1 billion in funding because we believe this can be a major contributor to a lasting peace in the Great Lakes region,” Kim said.

“This funding will help revitalize economic development, create jobs, and improve the lives of people who have suffered for far too long. Now the leaders of the Great Lakes region, by restarting economic activity and improving livelihoods in border areas, can boost confidence, build economies, and give new opportunities for millions of people.”

Kim said the new regional pledge, in zero-interest financing from the International Development Association (IDA), will support two major regional development priorities: recovery of livelihoods to reduce the vulnerability of people living in the Great Lakes whose communities have suffered greatly during conflict in the region; and revitalizing and expanding cross-border economic activity to spur greater opportunity and integration in the areas of agriculture, energy, transport and regional trade.

The World Bank’s proposed additional funding includes roughly $100 million for supporting agriculture and rural livelihoods for internally displaced people and refugees in the region; $340 million to support the 80 megawatt Rusumo Falls hydroelectric project for Burundi, Rwanda, and Tanzania; $150 million for the rehabilitation of the Ruzizi I and II hydroelectric projects and financing for Ruzizi III, supplying electricity for Rwanda, Burundi, and DRC; $165 million toward building roads in DRC’s North and South Kivu and Province Orientale; $180 million for improving infrastructure and border management along the Rwanda-DRC border; and additional millions of dollars for public health laboratories, fisheries, and trade facilitation programs among others.

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Minister of Trade and Industry, François Kanimba requested  Turkish businessmen  to invest in Rwanda. Rwanda and Turkey, developed a profound bilateral relationship since President Paul Kagame’s visit to Turkey in 2012.

Minister Kanimba said that the Government of Rwanda has offered incentives for foreign investments that are as favorable as possible and that Turkish and Rwandan businessmen should come together to exchange ideas more often.

The Minister was addressing a Turkey-Rwanda Trade and Investment Forum, organized by the Turkish Confederation of Businessmen and Industrialists (TUSKON). A delegation of Twenty nine Rwandan businessmen led by Minister of Trade and Industry, François Kanimba attended the Rwanda-Turkey Business Forum and Exhibition held in Istanbul, Turkey starting from 18th to 23nd May, 2013.

“Rwanda stands out with its gold, tin ore, methane and hydro-electricity power potential as well as vast arable lands suitable for farming. And Turks are welcome to invest in the country”, Rwandan Trade Minister François Kanimba told a group of Turkish businessmen in İstanbul.

Rwanda-Turkey Business Forum will be the first of its kind and it comes as part of the growing business relationship between the two countries after President Paul Kagame visited the Turkish people and was introduced to some of the world’s renowned investment organizations like Tuskon, at a world economic summit that was held in Turkey in 2012.

Kagame’s visit to Turkey has sparked-off profound business collaboration between the two countries- which also share some common aspects in culture. Various Turkish investors, including the world class airline-Turkish Airlines, have invested in Rwanda. Other Turkish organizations and operations in Rwanda today, include education, hides and skins business among others.

The Tuskon Deputy Chairman Ahmet Ciğer noted that food and mining are the most promising investment fields for Turkish entrepreneurs in Rwanda.

“Ten years ago, Rwandan villagers would ask the government for food and basic necessities; today they demand better roads, improved electricity access and fast broadband,” Rwandan President Paul Kagame wrote, describing his country’s economic development in an article published in The Wall Street Journal on Sunday.

As Rwanda moves quickly to overcome the destructive impacts of the 1994 Genocide on the economy, Rwanda is looking to attract long-term foreign investments and through the Rwanda Development Board (RDB) Rwanda investment lobby, the country hopes to attain this goal and become a region hub for business.

Starting a business is much easier and faster in Rwanda, and so is registering property, than it is in any of its neighbors in the East African Community (EAC) according to the World Bank 2013 report on Doing Business in EAC released this May 2.

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Following the attractive incentive, Rwanda has also this May 2013 welcomed a new entrant, the Rwanda East Africa Exchange (EAX)- a regional commodity exchange initiative, whose head offices are now located in Rwanda’s Capital-Kigali.

The Rwanda East Africa Exchange initiative was launched in January 2013, in Davos, Switzerland at the World Economic Forum; by President Paul Kagame, and Ambassador Jendayi Frazer, among other representative dignitaries,

The EAX is expected to link small scale farmers with better access to agriculture and financial markets, enabling them to sell their products at a fair and competitive price and facilitating access to financing opportunities.

Ambassador Jendayi Frazer, who is also a Managing Partners of EAX representing the Africa Exchange Holdings (AFEX) says that “the investors in this initiative chose Rwanda because of its political environment, which is also backed by a zero tolerance to corruption and better ways of doing business in the region. We are certain of the support from the Rwandan government and this is what we need in order to succeed”

Most of the east African countries are largely dependent on agricultural produces and the problem of markets will no longer be an issue any more since the EAX will now be able to connect farmers to the highest bidders, and also enable them to easily sell their products after a seasonal harvest, without a necessary direct contact with the buyers as it has always been the hustle for most.

“This initiative is believed to be a solution to the problems of African farmers in the region. They will be able to sell their products at good prices and to buyers that they choose to” says Paul Kukubo, the EAX Chief Executive Officer,

Creating awareness of this new initiative will be the next challenge but the proprietors and managers of the commodity exchange forum believe that the media has a major role in creating awareness while the farmers will also be able to receive training and information about the way the EAX operates.

“We need the media to come on board and educate the community about this initiative and in this regard we will come up with a program of training journalists so that they can understand better the system of exchanges” Kukubo noted

While at the EAX offices in Kigali, the initiative will be using state of the art trading technology that will enable all stakeholders and key players to access information on the market trends and how and where to sell their products.

With the installation of e-Warehouse Receipts (EWRS) a physical commodity sitting in a particular certified warehouse will be transformed into a tradable commodity which will facilitate ongoing trade functions, including hedging.

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President Kagame speaks to a group of women during a visit to Southern Rwanda in February 2013. The President told an event at Oxford University today that accountable leadership has put the country at its current level (Photo by PPU)

President Kagame has said that his leadership style of being accountable to the people has contributed to Rwanda’s performance in development.

Speaking at Oxford University May 18, Kagame emphasised the need for “taking responsibility for what I need to take responsibility for”, adding: “I work with my team – hold them accountable and am held accountable to them.”

The President made the remarks this afternoon at the Oxford Africa Business Conference where he gave a keynote address and was later awarded the inaugural ‘Distinction of Honour for African Growth Award’ by the Oxford Business Network for Africa.

Drawing on Rwanda’s recent development trends, President Kagame said that the nation’s growth has relied on structural factors like political stability.

Now Rwanda is 5^th best place in the world to do business, as it takes only six hours to open a business in Rwanda. Rwanda targets 11.5% growth in the next 5 yrs, said the President.

He said the current government never envisaged the struggle to develop Rwanda to be anything easy, which helped to make hard, but right decisions.

Turning to education, Kagame explained how Rwanda’s education system has changed and produced more university graduates, from 2500 in 1995 to 75 000 to-date.

Brushing off sceptics

Regarding criticism about his administration, Kagame took a swipe at sceptics describing their views as not based on facts on the ground about Rwanda’s gains. “It’s not possible for positive and negative sides of Rwandan story to co-exist,” he said.

“How can providing health coverage and education to over 90% be authoritarian?,” he asked the audience of business personalities, academicians, politicians and university students.

He added that democracy and human rights are about people and Rwanda’s good record on health, education and women empowerment are indicative of Rwanda’s positive gains.

“We have focussed on the number one asset, which is our people,” he said, adding: “our people are mobilized, motivated and ready to embrace meaningful partnerships and meet their full potential.”

Aid cuts confused

The Q&A session also touched on the recent suspension of donor aid to Rwanda, that the President described as “confused”, adding that Rwanda is being blamed for the failures of the DRC government and the UN.

Several donor countries slashed aid to Rwanda amounting to about $240m, but most have already reinstated their packages to Rwanda. Rwanda criticised the alleged support to M23 rebels, as baseless and unfounded.

Recently Rwanda initiated the Agaciro Development Fund as a pool where Rwandans and well-wishers can contribute as the nation works towards self-sustainability.

Third Term talk

On speculation that he may seek a third term, President Kagame said that this is not part of his plans. “I have not even given thought to a third term,” he said.

Even as questions keep piling up on the topic, President Kagame has stated on numerous occasions that he does not intend to seek a third term come 2017 when his current term ends.

His call to the nation has centred on looking at continuity, change and stability for Rwanda.

Progress on unity and reconciliation

President Kagame also responded to questions regarding unity and reconciliation as the nation recovers from the 1994 Genocide against the Tutsi. He said that the government had opted to achieve justice and reconciliation at the same time.

Rwanda adopted Gacaca, a traditional justice system that has tried about two million cases relating to the Genocide.

Through the Unity and Reconciliation Commission, Rwandans are also encouraged to reconcile and live together.

Optimism over Africa’s potential

Talking about Africa’s development, President Kagame expressed optimism over the continent’s growth pattern, saying that what remains is how such growth can be sustained. He advised that structural changes are needed to sustain it.

Kagame predicted that about 40 African countries will gain middle income status by 2025 due to increasing stability and governance.

He said that poverty rate in Africa is falling and there is indication of a bright future for investment.

Kagame praised African countries for “charting their way forward and recognising the need for partnership”.

The Oxford Africa Business Conference was attended by academicians, business personalities and university students. President Kagame is also scheduled to attend the Rwanda Day 2013 event in London that has attracted over 3000 guests.

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The Baseline Profitability Index (BPI), published by the Foreign Policy Magazine, has ranked Rwanda among the top 10 countries best destination for investment in the world.

The report puts Hong Kong in the first position with 1.23 BPI value, followed by Botswana (1.22). Taiwan (1.21), and Singapore (1.19), third and fourth, respectively, and Rwanda in the fifth- with 1.18 BPI value out of 102 countries surveyed across the world.

Though Hong Kong and Singapore, regularly top indexes like the World Bank’s Doing Business rankings and the World Economic Forum’s Global Competitiveness Reports, three African countries- Botswana, Rwanda, and Ghana; have managed to surface in BPI report.

Why Rwanda?

Rwanda has put its focus on investment promotion and attracting as many investors –both local and foreign through various institutional reforms and polices. This has enabled many investors to startup business in Rwanda’s untapped opportunities in areas such as: Infrastructure opportunities in rail, air transportation to further develop Rwanda as an EAC hub, Investment in tea and horticulture.

Rwanda also has quality Tea and coffee and growing conditions among the best in the world. The Energy: Power generation, off grid generation and significant methane gas opportunities, and Tourism: Unique assets creating booming sector; growth potential in birding and business (conference) tourism.

Some of the foreign investors say they chose to come to Rwanda without even thinking twice about the decision. Mevlüt Kayar, the Turkish Airlines Vice President of Marketing & Sales says that the star alliance airline chose to invest in Rwanda because of the good governance and political will in the country, which gives assurance of the future.

“When you compare Rwanda to other countries, it is very assuring when you don’t have to bribe to do business. Rwanda is a small country but it has a future and we will be proud to be part of this” he said.

Even mediocre investors, like Peggy Masambu, a Kenyan who run a consultancy have tasted the difference in the way Rwanda is running its investment climate business. I registered my company and I was given the certificate in six hours. That is not common in this region because of the chain of corruption” Masambu says.

Rwanda’s secret magic

Rwanda has given all reasons for making herself an investor’s destination. The country has been defined by a commitment to ensuring an investor-friendly attitude, and its investment climate has totally been re-defined by peace and stability and zero tolerance to corruption.

The Government of Rwanda is acutely aware that achieving the objectives of its Vision 2020 requires a substantial contribution by foreign investors, who need to be welcomed and assisted on the ground. This awareness is reflected in several ways in the investment regime.

Starting a business is much easier and faster in Rwanda, and so is registering property, than it is in any of its neighbors in the East African Community (EAC) according to the World Bank 2013 report on Doing Business in EAC released this May 2.

There are no sectors that are barred to foreign investors and no restrictions on the percentage of equity they might hold. The Constitution of 2003 also guarantees investors against expropriation, except in the public interest and with fair and prior compensation, which may be repatriated.

Rwanda’s investment promotion division under the Rwanda Development Board has been a gateway to investing in Rwanda. The division reaches out investors with specific investment opportunities through international road shows, facilitate prospecting investors coming to Rwanda by putting them in contact with people and entities they wish to meet; organizes sector specific conferences and networking session, assists with inquiries and information gathering on behalf of the investor and seeking potential local and foreign partners in Rwanda for potential investors.

Rwanda’s Tax incentives are offered to both foreign and local investors. The investment code and tax laws and East African Community tax regulations make provisions for tax incentives. Among these incentives are exemption capital goods and raw materials; hotel equipment; as well as a flat rate of 5% in lieu of taxes and duties for property and real estate developers.

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Rwanda Revenue Authority (RRA) has called on the business community to start registering with the new technology tax declaration (e-filing and e-payment) ahead of the registration deadline set for May 1^st, 2013.

Rwanda Revenue Authority has also announced plans of a countrywide training for traders on the new system, which will begin in May to enable the business community to usage of electronic tax payment platforms, a move aimed at easing the process of tax collection.

The month long campaign will be conducted in collaboration with the Private Sector Federation (PSF) and will be geared towards helping traders become familiar with automated tax payment which is a new phenomenon in the economy.

“Many merchants face skills barriers in the use of newly launched automated systems. PSF is therefore planning to provide training and workshops to improve their knowledge, as well as enable the efficient recovery of taxes,” Alex Ntale, Director of ICT Chamber in PSF said.

“The training and workshops will target business owners in all spheres of the economy particularly Small and Medium Enterprises (SMES) projects.”

One of the traders, Damascene Gakuba says that the new system is good for business transactions. But the capacity for all businesspersons to access it and later use it remains a challenge”.

“We have realised the importance of paying taxes. That RRA is bringing its services to our door steps is great news for of us. We don’t need to default anymore,” he said.

RRA rolled out electronic platforms last year to facilitate taxpayers to declare returns as well as pay taxes through the internet to boost fiscal revenues and curb rampant tax fraud. However, their use has been singled out as a challenge to SMEs, which are more familiar with paperwork such as handwritten invoices.

E-filing and e-taxation was introduced by RRA in 2012. It offers an option to the clients to file taxes like VAT, PAYE, Excise duty and Withholding taxes electronically on RRA’s website without having to visit an RRA premise.

However, e-filing is supposed to be complimented by e-payment system such that a taxpayer, after declaring taxes online, he can as well pay online…such that he/she doesn’t have to go to the bank to queue for payment

Apparently, Rwanda heavily depends on taxpayers’ money; however this time around, Rwanda will profoundly have to depend on taxation since the country is dealing with shocks of donor communities suspending their funds to the national budget support.

In 2012, RRA introduced a new tax regime for small and medium en­terprises in which business that make annual profit of Rwf2-4 million and between Rwf4-7 million now pay flat tax rates of Rwf60,000 and Rwf120,000 per annum re­spectively.

The revenue authority has set its eyes on making at least Rwf641.2 billion in the financial year 2012/13 from tax revenues.  In the meantime, the electronic filing system has resolved a number of loopholes and fil­ing of tax return made simpler, the tax body is experiencing an improve­ment in tax compliance and efficiency.

At least Rwf 318 billion was collected during the first half of the fiscal year that ended December 2012—an estimated 15.6% increase in the revenue collected during the same period of the previous year, which has registered growth in the economy by at least 8% in the last decade.

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An International Monetary Fund (IMF) mission led by Paulo Drummond has commended Rwanda for its efforts to cushion the country’s economic performance despite the challenge of adjusting to the partial suspension and delays in donor budget support.

In a statement released by the IMF team, in Kigali during their visit from April 5-18 to conduct the sixth review under the Policy Supports Instrument (PSI), the team stated that the government appropriately adjusted economic policies in 2012 by re-phasing some spending to the first half of 2013.

The government prepared a supplementary budget this year which reduces current spending in line with available resources. At the same time, the National Bank of Rwanda (BNR) responded by tightening monetary policy, and tapping into its foreign reserves buffer to cushion the impact of the aid shortfall.

“Economic activity has been quite resilient. Despite a modest slowdown in the second half of the year, gross domestic product (GDP) growth was 8 percent in 2012, driven by the expansion of the construction and service sectors.

Though the downside risks predominate, stemming from possible cutbacks in aid, delays in project implementation, and a more challenging global environment, and a general economic outlook for 2013 weakened somewhat since the fifth review; growth is expected at 7.5 percent for the year and Inflation is expected to rise to 7.5 percent by end-2013.

Apparently, the growth of the construction and service sectors is expected to slow down in response to tighter economic policies. This will be partly offset by stronger growth in agriculture (food crops), for which the first harvest of the year was good, and an acceleration in foreign-financed investment projects

The mission team met with the Minister of Finance and Economic Planning, Ambassador Claver Gatete, BNR Governor, John Rwangombwa and other senior officials, as well as representatives of the private sector and development partners.

The meeting agreed on economic policies and reforms that are consistent with the objectives of the economic program supported by the PSI. In particular the decisions to preserve policy buffers and allow greater exchange rate flexibility, while making full use of monetary policy instruments.

The 2013/14 budget will aim to sustain efforts to mobilize revenue, adjust spending to available resources while protecting priority spending, and limit domestic financing.

The authorities agreed to prepare a medium-term revenue mobilization plan by June, building on advice from the IMF’s Fiscal Affairs Department. On monetary policy, the NBR aims to maintain a tight monetary stance with a view to preserving macroeconomic stability.

“The authorities plan to issue a euro bond in the coming days in the amount of US$400 million, to be used exclusively to retire short-term debt and complete strategic investment projects as planned.

The mission also noted that the second Economic Development and Poverty Reduction Strategy (EDPRS2), particularly the emphasis on innovative and inclusive growth and further reduction in poverty and mobilizing resources to support this ambitious economic agenda will be vital to facilitating its effective implementation.

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