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Monday, August 28, 2006
Rwanda Reports Increased Investment
Rwanda’s economic development continued to make progress in the first six months of 2006 with 28 projects worth over $US 58 million (Frw 33 billion). Foreign Direct Investment (FDI) accounted for nine projects with a combined total value of $US 21.2 million (Frw 12 billion).
Of these, seventeen projects valued at $US 35 million (Frw 20.2 billion) have launched implementation programs. Local entrepreneurs accounted for projects whose value stands at Frw 21.1 billions or 63 percent of total investment and will create 1042 jobs as they become fully operational.
Building and mining sectors dominated others in terms of investment volumes. As the figures show, these sectors accounted for 32 percent and 19 percent of projected investments, respectively. This was followed by manufacturing with 12 percent, hides and skins 9 percent, and construction with 8 percent. Hotel and tourism both combined make 9 percent of total investment volume.
The Director of the One Stop Centre in the Rwanda Investment and Export Promotion Agency (RIEPA), James Kamanzi, stated that by mid June 2006, over 76 investment projects had benefited from different facilities, ranging from duty and tax exemptions to work permits and immigration facilities. Since the beginning of January this year RIEPA recorded 453 exemptions, representing 25 exemptions per week issued to 48 projects. These exemptions included 254 for raw materials, 116 for equipment, 44 spare parts, 37 for building materials and two for expatriate vehicles.
In terms of work permits and immigration facilitation, Kamanzi said that 30 projects were issued with 21 work permits and 43 projects were assisted to renew their visas , while 32 visitors were facilitated with entry visas, and six were facilitated with short-term visas and 27 with long term visas.
At a recent meeting of the Rwanda Private Sector Federation (FRSP) and RIEPA, International Finance Corporation (IFC) Director of Sub-Saharan Africa Thierry Tanoh lauded recent business regulation reform in Rwanda and strongly encouraged further improvements to promote a better business environment.
Tanoh specified that Rwanda had made improvements in areas such as getting credit, trading across borders and enforcing contracts.
“Rwanda was identified among 155 countries surveyed in its 2006 report as one of the world’s top business climate reformers,” said Tanoh. However, he further advised that to achieve the next level of development, Rwanda needs even more efficient business regulation to help entrepreneurs and encourage large private sector projects.
Through its technical assistance program, the Private Enterprise Partnership for Africa, the IFC has already designed leasing and entrepreneurship programs to support the financial, industrial, and small and medium enterprise sectors. Thierry Tanoh also disclosed that the IFC has been appointed as the transaction advisor for the sale of Rwanda Air to private investors.
The IFC will collaborate with the World Bank to establish model public-private partnerships in infrastructure. It is also working to structure and invest in innovative power projects and to support investment in the transport sector in Rwanda. In other areas, the IFC aims to support private banks through trade finance or by encouraging the financing of small and medium businesses and micro enterprises. The IFC is also scoping business prospects in agri-business, manufacturing, and tourism.
Rwanda business regulation reform consists of new investment policies and incentives conducive to investment promotion. Those policies include duties and tax exemption. An investor intending to make new investment, rehabilitate, expand, renovate or restructure an existing business enterprise and for that purpose import plant, machinery and equipment which is zero import tax rated under the Commodity Code is exempted from Value Added Tax otherwise payable on those goods.
Furthermore Rwanda is already a member of the Common Market for Eastern and Southern Africa (COMESA) and its free trade area. Sources told the Great Lakes Centre for Strategic Studies (GLCSS) that Rwanda is also benefiting from various blocks like the Economic Community for Central African States (ECCAS), and the African Growth Opportunity Act (AGOA).
The Great Lakes Centre for Strategic Studies in a London-based think tank.
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posted by GLCSS at 3:51 AM
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