An Investment Guide To Rwanda: Opportunities and Conditions

An investment
guide to Rwanda
OPPORTUNITIES AND CONDITIONS 2012
UNCTAD
The United Nations Conference on Trade and Development (UNCTAD) was established in 1964
as a permanent intergovernmental body. Its main goals are to maximize the trade, investment
and development opportunities of developing countries, to help them face challenges arising from
globalization, and to help them integrate into the world economy on an equitable basis. UNCTAD’s
membership comprises 193 States. Its secretariat is located in Geneva, Switzerland, and forms
part of the United Nations Secretariat.
ICC
The International Chamber of Commerce (ICC) is the world business organization. It is the only
body that speaks with authority on behalf of enterprises from all sectors in every part of the world,
grouping together thousands of members, companies and associations from 130 countries.
ICC promotes an open international trade and investment system and the market economy in the
context of sustainable growth and development. It makes rules that govern the conduct of business
across borders. Within a year of the creation of the United Nations it was granted consultative
status at the highest level (category A) with the United Nations Economic and Social Council. This
is now known as General Category consultative status.
NOTES
The term “country” as used in this study also refers, as appropriate, to territories or areas; the
designations employed and the presentation of the material do not imply the expression of any
opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal
status of any country, territory, city or area or of its authorities, or concerning the delimitation of
its frontiers or boundaries. In addition, the designations of country groups are intended solely for
statistical or analytical convenience and do not necessarily express a judgement about the stage
of development reached by a particular country or area in the development process.
References to “dollars” ($) are to United States dollars, unless otherwise indicated.
References to “tons” are to metric tons.
While every reasonable effort has been made to ensure that the information provided in this
publication is accurate, no business or other decision should be made by the reader on the basis
of this information alone, without a further independent check. Neither UNCTAD nor ICC accepts
any responsibility for any such decision or its consequences.
UNCTAD/DIAE/PCB/2012/4
© Copyright United Nations 2012
All rights reserved
ii I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

WHY INVEST IN RWANDA?
tSafe, peaceful and attractive location for expatriates.
tAll sectors open to investors with no restrictions.
tNiche opportunities in high-end ecotourism and conference tourism, information and

communication technologies, power generation, agricultural processing and logistics.
tPossibility of acquiring government stakes in banks, insurance, telecommunications, hotels and

agricultural operators.
tMember of the East African Community single market of 138 million people and a gross
domestic product (GDP) of US$ 82.1 billion.
tStable location next to mineral-rich eastern Democratic Republic of the Congo.
tRapid reformer of investment-related laws.
tOnly 48 hours to register a new business.
tLow petty crime and corruption.
AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 I iii

ACKNOWLEDGEMENTS
A great many individuals and institutions have contributed to this project and to the production of
this guide. These include a large number of government officials and company executives who
participated in the consultations in Rwanda. Particular mention is made of the Rwanda Development
Board and John Gara, Chief Executive Officer, Vivian Kayetesi and Philip Lucky.
This guide was prepared in the Division on Investment and Enterprise by Ian Richards under
the direction of Nazha Benabbes Taarji-Aschenbrenner and with the overall guidance of James
Zhan. Essie Saint-Clair provided administrative support. The guide was designed and typeset by
Laurence Duchemin.
The guide was funded by the One UN Fund for Rwanda.
NOTE TO THE READER

This document is published as part of the UNCTAD–ICC series of investment guides. The
publications in this series are intended for the use of foreign investors who are largely unfamiliar
with the countries covered.
They are thus designed to offer overviews of potential locations for investment, rather than
constituting exhaustive works of reference or providing detailed practical instruction. They do,
however, offer pointers to sources of further information in the private as well as the public sector.
There are two other features of these publications that the reader will find worth noting. One is that
they are third-party documents, intended to offer a balanced and objective account of investment
conditions. Their principal advantage in drawing the attention of investors to the countries they
cover is credibility. The other feature is that both their general structure and some of their specific
content are the result of consultations with the private sector.
The executive summary is followed by a brief introductory chapter. Then come the three chapters
that account for the bulk of the contents. “The operating environment” describes the general
conditions in which investors must operate: macroeconomic conditions, infrastructure, human
resources, etc. “The regulatory framework” focuses on regulations governing investment and
foreign direct investment in particular. “Areas of opportunity” offers a description of areas of potential
interest to foreign investors. The fifth and final chapter provides a summary of the perceptions of
the private sector in the country, both foreign and domestic.
iv I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

PREFACE
Foreign direct investment has come to be widely recognized over the past decade as a major
potential contributor to growth and development. It can bring capital, technology, management
know-how and access to new markets. In comparison with other forms of capital flows, it is also
more stable, with a longer-term commitment to the host economy.
An Investment Guide to Rwanda is the concrete product of a collaborative venture by the United
Nations Conference on Trade and Development (UNCTAD) and the International Chamber of
Commerce (ICC). The objective of this project is to bring together two parties with complementary
interests: companies that seek new opportunities and countries that seek new investors. This is
not always a straightforward exercise, for firms are driven by their global strategies as much as
lured by specific opportunities, and countries have economic and social objectives that transcend
attracting foreign investment.
The UNCTAD–ICC investment guides are thus properly seen as parts of a process, a long-term
process at the heart of which is an ongoing dialogue between investors and governments. The
guides themselves are the product of a dialogue, including that occurring among and between the
representatives of business and government during the workshops that precede the completion
of the guides. It is our hope that the guides will in turn contribute to the dialogue, helping to
strengthen and sustain it. We are convinced that in the long run it is this alone that will create
conditions increasingly conducive to greater flows of investment.
Supachai Panitchpakdi Jean-Guy Carrier

Secretary-General Secretary-General
UNCTAD ICC
AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 Iv

THE UNCTAD-ICC SERIES
OF INVESTMENT GUIDES
An Investment Guide to Ethiopia, 1999; new edition in new format, 2004
Guide de l’investissement au Mali, 2000; new edition in new format, 2004;

revised edition translated into English, 2006
An Investment Guide to Bangladesh, 2000
An Investment Guide to Uganda, 2001; new edition, 2004
An Investment Guide to Mozambique, 2001
An Investment Guide to Nepal, 2003
An Investment Guide to Cambodia, 2003
Guide de l’investissement en Mauritanie, 2004
An Investment Guide to East Africa, 2005
An Investment Guide to Kenya, 2005; new edition, 2012
An Investment Guide to Tanzania, 2005
An Investment Guide to Rwanda, 2006; reprinted, 2008; new edition, 2012
An Investment Guide to Uzbekistan, 2007; revised edition, 2009
An Investment Guide to the Silk Road, 2009
Guide de l’investissement au Bénin, 2010
An Investment Guide to the Lao People’s Democratic Republic, 2010
Guide de l’investissement au Maroc, 2010
Guide de l’investissement aux Comores, 2011
An Investment Guide to Zambia, 2011
Guide de l’investissement dans la région de l’Oriental du Maroc, 2011
Guide de l’investissement au Burkina Faso, 2012
www.theiguides.org
vi I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

ABBREVIATIONS
A
ACP Cotonou Agreement between the European Union and the African, Caribbean and
Pacific States
AfDB African Development Bank
AGOA African Growth and Opportunity Act
C
CET common external tariff
COMESA Common Market for Eastern and Southern Africa
D
DTT double taxation treaty
E
EAC East African Community
EPA Economic Partnership Agreement
EPZ export processing commodity zone
EWSA Energy, Water and Sanitation Authority
F
FDI foreign direct investment
FEZ free economic zone
FTA free trade agreement
FTZ free trade zone
G
GDP gross domestic product
GNP gross national product
GSP General System of Preferences
H
ha hectare
I
ICC International Chamber of Commerce
ICT information and communications technology
IFC International Finance Corporation
IMF International Monetary Fund
IPRCs Integrated Polytechnic Regional Centres
ITU International Telecommunications Union
K
km kilometre
kWh kilowatt-hour
AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 I vii

M
MICE meetings, incentives, conferencing and exhibitions
MINECOFIN Ministry of Finance and Economic Planning
MoU memorandum of understanding
MW megawatt
N
NBR National Bank of Rwanda
NSSF National Social Security Fund
P
PCT Patent Cooperation Treaty
PPP public–private partnership
R
REMA Rwanda Environment Management Agency
RDB Rwanda Development Board
RPSF Rwanda Private Sector Federation
RURA Rwanda Utilities Regulatory Agency
S
SEEPZ single enterprise considered as export processing zone
T
TNC transnational corporation
TPMs technical protective measures
U
UNCITRAL United Nations Commission of International Trade Law
UNCTAD United Nations Conference on Trade and Development
UNDP United Nations Development Programme
UNICEF United Nations Children’s Fund
US$ United States dollar(s)
V
VAT value-added tax
W
WB World Bank
WIPO World Intellectual Property Organization
WTO World Trade Organization
WIR World Investment Report
viii I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

TABLE OF CONTENTS
Why invest in Rwanda? iii
Acknowledgements iv
Note to the reader iv
Preface v
The UNCTAD-ICC Series of Investment Guides vi
Abbreviations vii
EXECUTIVE SUMMARY 1
Why invest in Rwanda? 1
I. INTRODUCING RWANDA 5
Rwanda at a glance 5
Map of Rwanda 6
Country and people 7
Government and legal system 7
Government economic strategy 8
II. ASSESSMENT OF THE OPERATING ENVIRONMENT 11

Economic performance 11
Trade and investment 11
Infrastructure 15
Transport 15
Human capital 17
Financial sector 18
The private sector in Rwanda 19
III. REGULATIONS AND PROCEDURES FOR INVESTORS 21

Set up and exit 21
Ownership and property 24
Investment protection and dispute resolution 26
Taxation 27
IV. AREAS OF OPPORTUNITY 31

Information and communication technology 31
Tourism 32
Power generation 34
Agriculture 35
Mining 38
Privatization 40
Other opportunities 42
V. INVESTOR PERCEPTIONS 45
General observations 45
Specific points 45
APPENDICES 47
Appendix I. Public holidays and business hours 47
Appendix II. Bibilography 48
Appendix III. Laws relevant to foreign investors 49
AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 I ix

©Anouk Zijlma
Executive summary
Why invest in Rwanda? neighbourhood but in sub-Saharan Africa more
generally. And it enjoys low levels of crime and
Rwanda has come from far over the past other disturbances of the peace.
18 years. It has established a stable govern- Finally, Rwanda has the potential to serve as
ment, secured peace and safety in its territory, a services hub to access the regional EAC
made great strides in restoring and reforming market, with a population of 138 million and a
the economy and in 2010 was named by the GDP of $82.1 billion, as well as neighbouring
World Bank as the world’s top reformer. It has Democratic Republic of the Congo, for which
also articulated an inspiring vision of its future it constitutes an access to EAC. As a small
– Vision 2020 – that sees the country reaching country with a relatively good network of major
middle-income status over the next eight years roads, it has some special advantages in this
and positioning itself as a high quality hub for context. Nor is Rwanda’s access to other
an increasingly integrated region, the East Afri- markets limited to its neighbourhood. It is a
can community (EAC). Rwanda has shown that member of the Common Market for Eastern
it has the will power and determination to reach and Southern Africa (COMESA) free-trade area.
this. While still a poor country, it has come a It also has duty-free access for a large variety
very long way in just over a decade. of products to the rich overseas markets of
the European Union and the United States of
Advantages America.
Rwanda remains relatively virgin territory

for investors. The domestic market may be Opportunities
small but it offers select opportunities across Rwanda offers a range of niche opportunities.
the board, as so few services are locally The Government is particularly keen on attracting
produced. The country runs a substantial trade investors in activities related to information
deficit, which offers opportunities for import and communications technology (ICT). An
substitution for example in consumer goods. infrastructure has been laid that will shortly see
Being a landlocked country, to which access 75 per cent of the population with access to
only comes with high transport costs, also the Internet and the Government has taken the
means that there is a certain natural protection lead in developing the ICT sector through the
for investors in the country. These features of installation of advanced applications and their
Rwanda as an investment location would be of integration into governmental processes. That
particular interest to small investors, especially lead is now being picked up by the local private
those already within the EAC, who would have sector.
the advantage of a general familiarity with
business conditions in the region. Tourism is the other major area of opportunity.
The best known asset is the mountain gorillas in
Rwanda also distinguishes itself from the region. the national park at Virunga. However, Rwanda
The country has a stable government with a is also known as the land of a thousand
clear and coherent vision of where it wants to hills and is a beautiful country. It has a large
take Rwanda, backed by commitment and number of bird species (estimates vary from
determination. A business can be registered 300 to more than 700), a great variety of plants
and legally established through a two-step and flowers (including over 100 species of
procedure in 48 hours, making Rwanda eighth orchids) and Lake Kivu on the western border.
in the world according to the World Bank’s Opportunities for investors here are varied:
Doing Business for starting a business. It is hotels and lodges, entertainment facilities,
also a country which current investors regard restaurants, tour operations and training
as being notably free of petty corruption, a services (for which there is a major need). The
feature that makes it stand out not only in its Government is aiming both at positioning the
AN INVESTMENT GUIDE TO RWANDA – EXECUTIVE SUMMARY I1

country as a high-end eco-tourist destination Difficulties facing investors
and progressively as a long-haul destination in
The difficulties investors are likely to encounter
itself though for a limited and wealthy clientele.
in Rwanda derive primarily from three
Complementing tourism, the Government is
sources. One is the landlocked nature of
also positioning Kigali as a regional conference
the country. Not only does this mean higher
centre, making the most of its regional air
costs because of long land transport routes,
connections. It is in the process of building a
it means dependence on the infrastructure
convention centre that will seat 3,000 in a single
and administrative procedures of neighbouring
room and encouraging further investment in
countries with coastlines: Kenya and the
business hotels.
United Republic of Tanzania. Rwanda has the
Energy is another high-priority area. Supply is highest imported freight service costs in the
not keeping up with domestically-generated region, which are nearly three times the African
demand. Although some independent power average. It also means that Rwanda’s market
producers are already in operation, more would is relatively small and commensurate with that,
be most welcome and promising developments the size of its opportunities.
are taking place in extracting methane from
Another difficulty is the shortage of qualified
Lake Kivu and in geothermal energy.
human resources. While the situation is
In agriculture, there are opportunities in coffee improving and much investment has gone into
and tea, Rwanda’s primary exports. Rwanda developing the academic sector (the Kigali
can produce high-grade Arabica coffee as well Institute of Science and Technology is making
as fine teas, given its elevation and climate, but great strides) and vocational training, firms
has lacked the resources (training, organization, must nevertheless spend more on training than
quality control) that can help it make the they would in neighbouring countries and for
most of these natural advantages. Foreign senior positions, make use of expatriate labour
investment could play a very valuable role here from the region.
in breaking market patterns and adding value
Investors also need to remember that despite
in Rwanda through processing, packaging and efforts being made by the Government to
marketing. There are also opportunities through reform the investment climate, Rwanda has not
privatization in tea. Beyond these traditional had an extensive history of a private sector-led
exports, there are measured opportunities in economy. The Government is still building its
the nearly unexploited fields of horticulture, skills in facilitating the private sector and fully
floriculture and herbal products. providing it the space it needs to perform its
Opportunities can also be found in mining. The economic role, especially in more sensitive
Government is keen to expand this fledgling sectors.
sector, currently producing tin, wolfram,
coltan and gold and encourage full use of the Investment trends
country’s mineral potential. Other opportunities
The Government has made the attraction
include privatization as the Government
of investment and its role into the Rwandan
decides to divest itself of stakes in banks,
economy a key policy priority and to this end
insurance, telecommunications, hotels and
created the Rwanda Development Board to
agricultural operations. There is also logistics,
integrate all agencies dealing with investment
where Rwanda’s key position between the EAC
and investors. This took place at a time of
and the Democratic Republic of the Congo
strong growth in foreign direct investment
needs to be matched by efficient transport
(FDI), with inflows growing at an average of
and warehousing. At the same time, Rwanda’s 70.0 per cent a year between 2005 and 2009
small domestic market offers possibilities in and reaching a peak of US$ 119 million, before
manufacturing; local production is limited but returning to US$ 42 million in 2010.
so is local competition. Lastly, special economic
zones offer demarcated land, facilities and The principal foreign investors in Rwanda
attractive fiscal incentives. reflect the country’s market size, growing
2I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

regional integration and its history of attracting subsistence agriculture into one led by industry
investment. They originate principally but not and services – FDI can play an important role.
completely from Africa, the Middle East and In addition to capital, it can bring expertise
Asia and cover a range of emerging sectors in and technology and help enhance local skills,
the country. this last a crucial requirement for economic
transformation. Some of the constraints on
Prospects and challenges doing business in Rwanda are only susceptible
of long-term solutions (such as creating a well-
Rwanda has staged a remarkable recovery over educated and highly skilled workforce) and
the past 18 years. Security, stability and clean some are beyond the control of Rwanda on
governance are impressive accomplishments. its own (such as improving the land transport
What the Government hopes to accomplish in routes through neighbouring countries). Yet
the next decade is clearly stated in its Vision others relate to understanding and facilitating
2020. In reaching this objective – broadly, the role of the private sector in the economy.
the transformation of an economy based on
AN INVESTMENT GUIDE TO RWANDA – EXECUTIVE SUMMARY I3

Introducing Rwanda
Rwanda at a glance
I
Name Republic of Rwanda
Political system Multiparty system
Legislature Bicameral legislature with an elected Chamber of Deputies and a partly-elected and partly-
appointed Senate. The Head of State is the President, who is elected directly by the people for a
seven-year term renewable once.
Surface Area 26,338 km2
Population 10.9 million
Density 413 people per km2
Country code RW
Languages Kinyarwanda, French and English.

Kiswahili is also used in commercial hubs
Climate Tropical but mild because of elevation. Two rainy seasons: March–May and October–November.
Frost and snow possible in the mountains.
Average temperature 24ºC (maximum of 34ºC during the day and minimum of 10ºC at night).
Average in Kigali 19ºC
Time Zone GMT+2
Administration Five provinces
Currency US$ 1 = RWF 595 (January 2012)
GDP at current US$ US$ 5.65 billion (2010)
GDP per capita US$ US$ 531 (2010)
Human development rank 166 out of 187 (2011)
Standard & Poor’s Rating B
Transparency International 49 of 182 (2011)

ranking
Doing Business rank 50 out of 183 for ease of doing business. Ranked 8 for starting a business (2012)
Sources: UNCTAD, UNICEF, UNDP, World Bank, Government of Rwanda, Standard & Poor’s, Transparency International.
AN INVESTMENT GUIDE TO RWANDA – INTRODUCING RWANDA I5

Kafunzo
Merama
RWANDA Kagitumba
National capital
UGANDA
Prefecture capital Lake
Mutanda Lake Rwemhasha RWANDA
Town, village Bunyonyi
6I
Airport, airstrip Lubirizi
Rutshuru Kisoro
International boundary Nyagatare
Cyanika Kabale Ka
Provincial boundary
BIRUNGA
mba
ger
Road Butaro a
NAT'L PARK Muvumba
gi t u
Kidaho Lac Katuna
Track
Ka
Lac
Burera Rwanyakizinga
Ruhengeri Mulindi Gatunda
Lac Kirambo Cyamba
Busogo Ruhondo Gabiro AKAGERA
Byumba Ngarama Lac
Kora NORTHERN NATIONAL Mikindi
DEMOCRATIC Mutura PROVINCE PARK Lake
REPUBLIC OF THE Kagali Kinihira Lac Hago Mujunju
Goma Nemba
CONGO Gisenyi EASTERN
Rushashi Kinyami
Kabaya Muhura PROVINCE Lac
Lo Nyundo Rutare Kivumba
Ny
Ngaru
MAP OF RWANDA
wa ab Mbogo Murambi
Lac Rukara
GISHWATI ar
ong Muhazi
NATURAL Ngororero o Shyorongi Lac UNITED
Ile TOWN OF Ihema REPUBLIC OF
Bugarura RESERVE
Kiyumba KIGALI
WESTERN Rwamagana TANZANIA
Ile Wahu Kigali Gikoro
PROVINCE Runda
AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

Lac Bulinga Kayonza Lac
Kicukiro Bicumbi Nasho
Kivu Mabanza Butamwa Lac
Gitarama Mugesera Kigarama Lac Lake
Ile Kibuye Bisongou
Birambo Lac Mpanga
Idjwi SOUTHERN Cyambwe
Bugesera Kibungo
Gishyita PROVINCE Rukira
Bwakira Rilima
Rwamatamu Masango Ruhango Gashora Sake
Rusumo
Gatagara Bare
Kaduha Nemba Kirehe
Ngenda
Ka
Ile
Nyanza ge
Gombo Rwesero
ra
Karaba Lac Lac
Rusatira Cyohoha Rweru
Kamembe Gisakura Gikongoro Sud
Bukavu Karama
Cyangugu Rwumba Kitabi
Cyimbogo Karengera
Nyakabuye Bugumya NYUNGWE
NAT'L PARK Butare
Ruramba Gisagara
Busoro
yaru BURUNDI
Bugarama 0 10 20 30 40 50 km
Munini
an
Ak 0 10 20 30 mi
The boundaries and names shown and the designations used Runyombyi
on this map do not imply official endorsement or acceptance by
the United Nations.
Map No. 3717 Rev. 10 UNITED NATIONS Department of Field Support

June 2008 Cartographic Section
Country and people The main religions practised by the population 1 I The Official Gazette
is available online
are Roman Catholic (56.5 per cent); Protestant on the official website
Rwanda is a small, densely populated country (26 per cent), Adventist (11.1 per cent), Muslim of the office of
the Prime Minister:
in East Central Africa, 120 km south of the (4.6 per cent), and indigenous beliefs (0.1 per
www.primature.gov.rw.
equator. The total area is 26,338 sq. km, cent). It has a relatively young population with
of which about 1,400 sq. km is water. With 42.3 per cent of people below the age of
10.9 million inhabitants, the country has a 14 and only between three to four per cent of
population density of about 413 persons per the population above the age of 60.
sq. km, the highest in Africa. Known as the Kinyarwanda, French and English are the official
land of a thousand hills, Rwanda enjoys a
languages of Rwanda, with the Government
mild climate despite its location. The average
emphasizing increased use of English in all
elevation is 1,500 m and the highest point
official work, especially since membership of
in the country is the Karisimbi volcano at
the Commonwealth in 2009.
4,519 m.
With its hilly terrain and lush green vegetation,

Rwanda is an exceptionally beautiful country. Government and legal system
Its tourist attractions include the Volcanoes
National Park in Virunga, which houses the The Head of State is the President, who is
famous mountain gorilla, and Lake Kivu on the elected directly by the people for a seven-year
western border. It also has a wide variety of term renewable once. The President is also the
fauna and flora, including 670 species of birds Head of Government and Commander in Chief
and more than 100 species of orchids. Thus of the Rwandan Defence Force, and has fairly
far, the country’s tourism potential has largely extensive powers, including the conclusion
been unexploited, although the Government is of international treaties, the declaration of a
trying both to promote tourism and to attract state of emergency and the dissolution of the
investment in it. Chamber of Deputies.
The country is landlocked and borders on Legislative power is vested in the National
Uganda to the North, the United Republic of Assembly, a bicameral legislature with an
Tanzania to the East, Burundi to the South elected Chamber of Deputies of 80 and a
and the Democratic Republic of the Congo to partly-elected and partly-appointed Senate of
the West. The distances from the Rwandan 26. Once the National Assembly passes a bill, it
border to the Indian Ocean ports of Mombasa is presented to the President for his assent. On
in Kenya and Dar es Salaam in the United the President’s assent, it becomes law and, on
Republic of Tanzania are approximately publication in the Official Gazette, comes into
1,600 km and 1,300 km respectively. force.1
As a single entity, Rwanda can trace its In many instances, individual laws enable the
origins to the late 19th century, when it was minister responsible for a particular aspect
unified as a monarchy by King Rwabugiri of public life to make specific regulations. In
(a somewhat larger territory than it later Rwanda, the Minister of Trade and Industry
became). The agreement among the mainly is responsible for most matters relating to
European powers that participated in the Berlin investment, while the Minister for Finance and
Conference of 1884–1885 allocated the then Economic Planning handles fiscal, monetary
Ruanda-Urundi (now Rwanda and Burundi) to and related matters. In other instances, the
the German sphere of influence. But colonial regulatory authorities issue rules to cover
rule properly so-called may be said to begin particular aspects within their jurisdiction.
with the transfer of Rwanda to Belgium after
World War I as a mandated territory under the The judicial system is headed by the Supreme
League of Nations. After World War II Belgium Court, with, immediately below it, the High
moved towards granting independence to the Court, and then the higher instance courts,
territory, which finally occurred in 1962. lower instance courts, the Court Martial

(for members of the Armed Forces) and reforming the business environment of the
commercial courts. The High Court is one country, establishing a reputation as an
court but with branches in different parts of the advocate of entrepreneurial and technological
country. It is an appellate court to the provincial development. UNCTAD’s e-regulations pro-
courts and a court of first instance in respect gramme has worked with the Rwanda
of administrative matters and some criminal Development Board to significantly streamline
offences. the process for registering a business, which
can now be done online, and obtaining licences
and permits. The eregulations.org website also
Government economic contains information on all investment-related
procedures. The World Bank ranked Rwanda
strategy as the world’s number one reformer in its
2010 Doing Business rankings and in 2012
The focus of the Government has been it was ranked as the 45th easiest place in the
on reforming the economy and promoting world in which to do business.
economic growth. The Government is
also pursuing an ambitious programme for The country’s development roadmap is Vision
human resource development to rebuild the 2020. Its aim is to make Rwanda a middle
human capital lost or emigrated in 1994. This income country by 2020, which involves
has led to some important socio-political raising per capita GDP to US$ 900, reducing
achievements, including the restoration of the poverty rate to 30 per cent and achieve an
peace, security, stability and personal safety; average life expectancy of 55 years. Indicators
a zero-tolerance policy towards corruption; show that the country is moving towards
judicial and administrative reforms; regional these goals.
integration; increased investment in education;
and substantial progress towards national Vision 2020 identifies six “pillars” on which the
reconciliation. growth expectations rest. These are:
In addition, a number of regulatory and 1. an efficient state that unites and mobilizes
institutional reforms have been undertaken the people;
to attract increased investment into the
2. human resource development;
country. This includes the establishment of
the Rwanda Development Board, an auto- 3. the development of basic infrastructure;
nomous Government agency with a
wide-ranging mandate (see Box I.1). The 4. the development of entrepreneurship and
Government has been especially successful in the private sector;
Box I.1. The Rwanda Development Board (RDB), a one-stop shop for investors
The Rwanda Development Board was established in 2009 with the express intention of integrating all government agencies
responsible for the entire investor experience under one roof. This includes key agencies responsible for business registration,
investment promotion, environmental clearances, privatization and specialist agencies which support the priority sectors of ICT
and tourism as well as small and medium-sized enterprises and human capacity development in the private sector. The aim is
to provide investors with a one-stop shop.
The RDB reports directly to the President and is guided by a board that includes ministers dealing with finance, commerce,
infrastructure, agriculture. As such, it plays an influential role in Rwanda private sector and infrastructure development.
The RDB modelled on international best practice examples of Singapore and Costa Rica and works closely with those countries
and with multilateral development organizations.
Source: RDB.
8I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

5. the modernization of agriculture and animal moving away from subsistence agriculture to-
husbandry; wards the provision of ICT-based services. The
Government has already invested in 2,300 km
6. reconstruction of the nation.
of SEACOM’s fibre optic cable, throughout
Also identified are four cross-cutting domains: the country in order to provide high speed
gender issues, environmental protection, internet. It is also in the process of establishing
science and technology including ICTs, and a National Data Centre to store public data.
regional and international integration.
The Government is also focused on encouraging
The last two crosscutting domains are of fair and competitive trade practices to stimulate
particular importance in the economic context. entrepreneurship, innovation and investment.
The emphasis on science and technology is To achieve the same it has approved intellectual
meant to address the need for human resource property, insolvency and secured transactions,
development and the creation of an economy and competition laws.

Assessment of the
operating environment
Economic performance
The Government’s reform agenda under Vision
previous five years has been declining in
proportion to the economy, marking Rwanda’s
gradual economic diversification to services
II
2020 (see chapter I) has been accompanied by (see Figure II.2).
a vigorous programme of capital expenditure, Nevertheless, risks to a continued growth
accounting for 41.1 per cent of the Government scenario exist. The prices of Rwanda’s agri-
budget, of which a substantial proportion has cultural exports (4.83 per cent of GDP) are
derived from donor assistance. Economically highly volatile. Donor assistance flows to the
these efforts have been paying off. Rwanda country account for 26.4 per cent of GDP
has enjoyed a period of high growth averaging and a high proportion of total government
8.2 per cent a year between 2004 and 2010, expenditure. Inflation is significantly influenced
with only a slight respite due to the global by price volatility in fuel and food imports.
economic situation (see Figure II.1). Rwanda’s
GDP is now 5.65 billion and GDP per capita
stands at US$ 531. Inflation has been brought
down by a combination of fiscal prudence and Trade and investment
a benign international environment in terms of
food and fuel prices.
Market Size and Access
Rwanda has an open trade regime. It is a
The main contributor to growth has been member of the World Trade Organization and
services (government expenditure on edu- of two subregional economic groupings, EAC
cation, health and public administration). (see Box II.1) and COMESA.
The industrial sector picked up after 2008
downturn and reflects important government As a member of the EAC single market, all
capital expenditure and greater investment goods manufactured in one EAC country and
in construction. Agriculture while occupying sold in another are treated as if they were
79.5 per cent of the labour force and growing manufactured locally, by virtue of there being
at an annual rate of 5.17 per cent over the no internal tariffs between partner countries.
Figure II.1. Inflation and Real GDP growth, 2001-2010
18
Inflation
16
Real GDP growth
14
12
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: UNCTAD.
AN INVESTMENT GUIDE TO RWANDA – ASSESSMENT OF THE OPERATING ENVIRONMENT I 11

2 I The full schedule of tariffs
Figure II.2. Changes in the sectoral makeup of GDP, 2004-2009
is available in the EAC
Common External Tariff
Handbook. 100
3 I More information can be 90

found at www.eac.int
80
70
60
Percentage
50
40
30
20 Services
Industry
10
Agriculture
0
2004 2009
Source: UNCTADSTAT.
The same countries also levy a common Trade Area (FTA) was created in 2000 and now
external tariff for goods entering the EAC, encompasses 11 of the 19 member states. A
with the aim of promoting manufacturing and customs union is planned in the close future
the processing of raw materials. Under this with the eventual elimination of quantitative
scheme, raw materials are imported duty free, and non-tariff barriers for goods originating
intermediate goods are charged 10 per cent from within the region. Common external
and finished goods 25 per cent.2 tariffs are also foreseen. Given the technical
and legal challenges posed by membership
COMESA forms a major market place in Africa of two different customs unions, it is likely that
bringing together as it does 19 member states the conditions of the COMESA union will be
covering a total population of 444 million. A Free harmonized with that of EAC.
Box II.1. The East African Community

The East African Community (EAC) is the regional intergovernmental organization of Burundi, Kenya, Rwanda, Uganda and the
United Republic of Tanzania. Established in 2000, it consists of seven main organs to enable the Community to fulfil its mission:
the Summit (the highest organ of the Community), the Council, the Co-ordination Committee, the Sectoral Committees, the East
African Court of Justice, the East African Legislative Assembly and the Secretariat. The Community is headquartered in Arusha.
Its official language is English, but it recognizes Swahili as a lingua franca.
The member countries also share a common culture and history, with some variations, and Swahili is widely spoken in the region.
It currently encompasses a population of 138 million and a GDP of $82.1 billion.
The East African Community (EAC) that came into existence in 2000 is actually the second to bear that name. The same three
founding countries – Kenya, the United Republic of Tanzania and Uganda – had established its predecessor in 1967, only to see
it dissolve ten years later. In the 80-year-long history of East African cooperation, the present EAC is only the latest milestone,
but it is a particularly notable one.
Key achievements of the EAC include the establishment of a customs union in 2005 and a common market in 2010 with a
common external tariff (0% for raw materials, 10% for intermediate goods and 25% for finished goods) and the removal of tariff
and non-tariff internal barriers to trade. Future steps include a monetary union and a political federation.3
The EAC is set to expand further. In 2011 South Sudan, with its petroleum industry, applied to join, at the invitation of Kenya and
Rwanda. The Democratic Republic of the Congo, with its vast mineral reserves has observer status.
Source: UNCTAD.
12 I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

Beyond Africa, the country has preferential services area when EPA negotiations take up 4 I World Bank 2011,
Rwanda Economic
access, in some cases duty free access to a this sector. Update, Spring Edition,
number of developed country markets. As a April 2011.
least developed country (LDC), Rwanda enjoys In addition Rwanda also has several bilateral
treaties with other individual countries to which
preferential market access treatment for a large
it exports to including China, Malaysia, South
number of agricultural and industrial products
Africa and Thailand. Rwanda is a member of
markets through the Generalized System of
the WTO through which it has MFN market
Preferences (GSP), and the European Union’s
access.
Everything But Arms Initiative (EBA), the latter
of which also covers the agricultural and food
industry including sugar. Rwanda also enjoys Trade performance
access under the United States of America’s Rwanda has enjoyed steady export growth
Africa Growth and Opportunities Act (AGOA), in the last ten years averaging 16.0 per cent
which covers a substantial range of products, a year. However, import growth has been
including textile and clothing. There are a much more important resulting in a declining
number of rules of origin and safety and quality trade balance (see Figure II.3). Nevertheless,
standards that come with these preferential forecasts for 2011 show the trade balance
schemes. narrowing following a rebound in international
prices and stronger-than-expected volumes of
Furthermore, Rwanda is a member of the interim
coffee, tea, and non-traditional exports.
European Union–EAC economic partnership
agreement (EPA), which would create a free The largest import items are machinery and
trade area between the EAC and the European transport equipment, manufactured goods
Union. Negotiations on a full EPA, which would and chemicals. This is followed by foodstuffs
have to be World Trade Organization (WTO)- such as grain and cereals. Meanwhile exports
compatible, are still ongoing. Once they come are led by agricultural products (45.0 per cent
into effect Rwanda will benefit in terms of of exports). Tea and coffee together constitute
market entry issues relating to standards, rules 90.0 per cent of agricultural exports. This
of origin, investment to build up productive is followed by fruits and vegetables. On the
capacities and development measures to services side, tourism revenues continue to
diversify production and revenue basis. It could increase, contributing US$ 200 million in 2010
also gain in terms of market access in the compared to US$ 175 million the year before.4
Figure II.3. Trade balance, 2004 to 2010

2500
2000 Exports
Imports
1500 Balance
1000
US$ Millions
-500
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-500
-1000
-1500
Source: UNCTADSTAT.

Table II.1. Top export and import markets, 2010, per cent of total
Export markets % Import markets %
Kenya 26.77 Kenya 18.17
Democratic Republic of the Congo 14.78 Uganda 16.80
China 9.62 United Arab Emirates 11.19
Swaziland 5.96 United Republic of Tanzania 6.46
United States of America 5.71 China 5.35
Belgium 4.78 Belgium 3.76
Pakistan 4.61 Korea, Republic of 3.52
Germany 4.39 United States of America 3.31
China, Hong Kong SAR 4.34 India 3.16
United Kingdom 2.19 Germany 3.11
Source: UNCTADSTAT.
Foreign direct investment performance 2009 peak reflects significantly on an investment

of US$ 117 million in mobile telecommuni-
The Government has made the attraction
cations by Millicom under its brand name Tigo.
of investment and its role into the Rwandan
economy a key policy priority and to this end The principal foreign investors in Rwanda
created the Rwanda Development Board in reflect the country’s market size, growing
2009 to integrate all agencies dealing with regional integration and its history of attracting
investment and investors. This took place at investment. They originate principally but not
a time of strong growth in FDI, with inflows completely from Africa, the Middle East and
growing at an average of 70.0 per cent a Asia and cover a range of emerging sectors in
year between 2005 and 2009 and reaching the country. They include investors from China
a peak of US$ 119 million before returning to (ZTE, Star Communication Network), Kenya
US$ 42 million in 2010 (see Figure II.4). The (Kenya Commercial Bank, Equity Bank, Nation
Figure II.4. Rwanda’s inward FDI performance, 2001 to 2010
500
Stock
450
Flow
400
FDI inward flows and stock (millions of dollars)
350
300
250
200
150
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: UNCTADSTAT.

Media, Serena Hotels, Nakumatt), Luxemburg Demand is expected to increase as Rwanda
(Millicom), Nigeria (Access Bank, Ecobank develops further. In order to address this
and United Bank of Africa), South Africa (MTN gap, the Energy, Water and Sanitation
Group, Tong Yang Moolsan) and the United Authority (EWSA, formerly Electrogaz), the
States (Contour Global). country’s national power and water distributor
has adopted an open approach in signing
Continued demand for improved infrastructure, agreements with independent power producers
whether in telecommunications, tourism, targeting a range of energy types. These
energy extraction or the public sector such as include methane extraction, geothermal, hydro
roads, education and health facilities, is likely power and peat. However, while on paper the
to maintain FDI inflows in infrastructure in the country appears to have met its future energy
medium term. needs, concerns have been raised that not all
independent power producers will go through
with their projects. Energy production therefore
Infrastructure remains an important sector of opportunity and
this aspect is examined in greater detail in
Telecommunications chapter IV.
With Rwanda’s ambitions of becoming an ICT There are two rates for electricity consump-
hub in the East Africa region, the Government, tion. Industrial users pay 105 RWF per kWh.
through the Rwanda Development Board, has Ordinary consumers pay 112 RWF per kWh
placed a strong emphasis on developing the excluding value-added tax (VAT).
country’s telecommunications infrastructure.
To this end, a 2,300 km fibre optic backbone, Electrification is concentrated in urban areas
from which operators lease capacity, runs and remains a challenge in the rest of the
through the country, connecting to the country. For this purpose, the Government
Seacom submarine cable. It is expected that established the Electricity Access Scale-up
75 per cent of the population will have internet Roll-out Programme (EARP) in 2010 with
access by the end of 2012 through the further World Bank financing. It aims to increase
deployment of microwave transmitters on the electrification rate in the country from the
telephone towers. The same network connects then nine per cent to 16 per cent in 2014
schools, universities, government departments and foresees the installation of a national
and 65 Rwanda Development Board (RDB) infrastructure of high voltage transmission
telecentres providing business development lines. Under the same target it aims to connect
services to small enterprises. 100 per cent of health facilities and admi-
nistrative offices, at least up to sector level, and
There are three mobile operators in Rwanda. 50 per cent of all schools.
The largest is South African-owned MTN with
2.8 million subscribers. This is followed by
Luxemburg-owned Tigo with 1.55 million as
of December 2011, then Indian-owned Airtel.
Transport
All have invested in 3G technology and MTN
Road transport
and Tigo provide money transfer applications.
The landline operator is Rwandatel, which also Rwanda’s road network covers approximately
provides high speed internet access. 14,000 km, of which 1,083 km are paved and
much of that the subject of a road upgrade
programme and in a good state. The network,
Energy
which links Eastern Africa with the Democratic
Current domestically generated installed ca- Republic of the Congo is one of Rwanda’s
pacity stands at 84.9 MW of which 75.5 MW advantages as a potential hub for the region.
is available. As demand exceeds supply, a The road density is 0.52 km per km2, one of
further 15.5 MW is imported from neighbouring the highest in Africa, and the main arteries are
countries. in very good condition. However, the feeder

roads from rural areas are poor or missing, airport 30 km from the city at Nyamata. Kigali
making it difficult to reach markets in the airport does enjoy cold storage facilities.
interior. It is estimated that close to 50 per cent
of the mostly rural population live more than an There is also an upgraded airport at Cyangugu.
hour away from the nearest market. Because Rwanda also has four domestic airports/
of the great distance separating Rwanda from airfields, at Butare, Gisenyi, Nemba and
shipping ports (1,300–1,600 km) and the state Ruhengeri.
of road infrastructure in the subregion, there is
an estimated implicit tax on international trade Rail and water transport
of over $160 per tonne.
There is no railway system in Rwanda.
Expressions of interest are being sought in the
Air transport
construction of a railway line between Kigali
Rwanda’s main international gateway is at and Isaka in the United Republic of Tanzania
Kigali, which enjoys direct flights to Addis (estimated cost of US$ 3.7 billion), and the
Ababa, Amsterdam, Brazzaville, Brussels, rehabilitation of the line from Isaka to the port at
Bujumbura, Dar es Salaam, Dubai, Entebbe, Dar es Salaam (estimated cost of US$ 1 billion).
Johannesburg, Libreville, Mombasa and This would be as a public–private partnership
Nairobi. Kigali is also the base for national (PPP).
airline Rwandair.
There is some internal lake transport, although
The main foreign airlines flying to Kigali are
only that on Lake Kivu is of significant
Brussels Airlines, Ethiopian Airlines, Kenya
economic value, as it connects Rwanda to the
Airways and KLM. Turkish Airlines is set to
Democratic Republic of the Congo market.
begin operations in April 2012.
Studies are being made on the navigability
The number of passengers, both foreign and of the Kagera River (and its tributaries) which
domestic, using Kigali airport was around passes through nearly all the provinces of the
450,000 in 2011.With only a small terminal country and serves as a border with the United
building, plans are in place to build a larger Republic of Tanzania and Uganda.

Human capital and Uganda, for management and technical
positions. The Government is aware of this and
Labour is investing heavily in education to fill the skills
gap. As a result, the education system now
The Rwandan population is estimated at accounts for 15 per cent of the national budget,
10.9 million, with the highest density in Africa and is seen as progressive and accessible.
(413 inhab/km2). Life expectancy at birth is
51 years. It is overwhelmingly rural but the Thirty-six per cent of enrolments in Rwanda’s
urban population, currently at 18 per cent is educational programme are in its technical
increasing at an estimated rate of 4.2 per cent and vocational education training system.
per year. The Government is keen to expand this
system, which is composed of a number of
Literacy rates for the 15-24 age group are at elements and there is a proviso for private
77 per cent (comparable to Burundi and the sector involvement. The Ministry of Education’s
United Republic of Tanzania and a bit less Workforce Development Authority offers short
than Kenya and Uganda). Education is free for courses in a range of trades through schools,
the first nine years of school. This is expected training centres and at the workplace to
to extend for a further three years in 2012.
suit the needs of different employers. This is
Primary school enrolment is therefore 96 per
complemented by the state-run Integrated
cent, which is high for the region. However,
Polytechnic Regional Centres (IRPCs). In
enrolment in the 405 secondary schools falls
addition, vocational courses are offered by
to 22 per cent.
a vast network of non-governmental orga-
There are seven public universities, with nizations and private institutions.
a total of 30,000 students enrolled. This
is complemented by a further 14 private Health services
universities. The most prominent universities
Health care in Rwanda is delivered at three
are the National University of Rwanda in
levels: primary care provided at government-
Butare and the Kigali Institute of Science and
Technology (KIST) in Kigali (see Box II.2). or non-governmental organization-run clinics
at the sector level; specialized care provided
The skills gap remains a challenge in Rwanda by district hospitals and specialists; and
with many investors having to hire a significant specialized care provided at national medical
number of expatriate staff, mainly from Kenya institutions. While preventative services are
Box II.2. Kigali Institute of Science and Technology

KIST was established in 1997. It has three faculties (engineering including information technology, applied sciences and
architecture). There are 2,850 students enrolled with 700 expected for the next intake. The institute offers degrees at bachelors
and masters levels.
KIST’s approach is to respond to gaps in the labour market. To this end it liaises with the private sector and various ministries in
developing its curriculum. It also examines the situation in the wider regional market.
The institute is working hard to support national economic development. Aside from courses provided, it has set up a consulting
firm and has established an incubation centre in partnership with the University of Cambridge, where it trains students in
creating an income-generating business. It is also working with the private sector to develop a placement system, which would
at the same time decrease reliance by investors on expatriate staff.
International partnerships have also been made with the Massachusetts Institute of Technology, the Leeds Institute of Transport,
the University of Ghana and a number of universities in South Africa.
While many teaching staff are from abroad, KIST aims by 2015 to be self-sufficient in generating its own staff and in retaining
the staff it has.
Source: UNCTAD.

free, curative care at the institutions mentioned and one discount house in Rwanda. Banking
above is only partly subsidized by government. services tend to be limited to traditional
The rest must be paid for by the patient and loans and deposits, and foreign exchange
is usually covered through membership of transactions and transfers. Combined assets
community health insurance funds, which are equal to US$ 1.14 billion and expanded
are themselves financed by membership 8.3 per cent in 2010. Meanwhile non-
contributions of US$ 2 per person per year and performing loans stood at 12.2 per cent.
government and donor funding. Nevertheless,
the care that can be obtained under this system, All banks are subject to a five per cent
while progressing remains basic and employers minimum reserve requirement. Banks wishing
usually provide more comprehensive medical to install in Rwanda must apply for a licence
insurance schemes. to the National Bank of Rwanda by presenting
a business model showing that there is a gap
Given that health care in Rwanda remains in the market and demonstrating a minimum
limited, expatriates are usually evacuated to share capital of US$ 8.13 million.
Kenya or South Africa for emergency treatment.
However, plans are underway by Aga Khan In order to improve access to credit, a private
Health Services to open a hospital and medical credit reference agency bas been set up
faculty in Kigali (see Box IV.II). (see Box II.3) of which all banks and other
financial institutions must be members. Other
companies such as utilities can be voluntary
Financial sector participants. The agency will shortly establish
a scoring system.
Banking
Insurance
There are currently nine commercial banks (of
which prominent banks are Banque de Kigali, Rwanda’s current insurance market remains
Banque Commerciale du Rwanda, Banque small. The principal actors providing a traditional
Populaire du Rwanda, Ecobank, Equity range of insurance products (life, health,
Bank and Kenya Commercial Bank), three motoring and property) are Société Rwandaise
microfinance banks, one development bank d’assurances (SORAS), Société Nationale

Box II.3. Promoting Access to Credit
In line with its aim to improve the business environment in Rwanda, the Government has taken measures to ease access to
credit in the country. The law governing secured transactions in movable property was approved in 2009 while the law regulating
credit information systems came into force in 2010. Both these laws are intended to increase availability of affordable credit in
Rwanda.
The secured transaction law in movable property now allows the use of movable property in collateral transactions. Movable
property can be either tangible or intangible. Tangible property includes crops, animals, trees to be harvested and other movable
goods, while intangible property includes chattel paper, documents of title, negotiable instruments, investment securities or
money. The above law also makes out-of-court enforcement of movable collateral possible.
The National Bank of Rwanda (NBR) has also put in place a legal framework to regulate the operation of the credit information
system with the aim to create a culture of responsible credit behaviour in Rwanda and to increase investors’ confidence. By
providing valuable information to banks and other credit institutions, the credit information system is expected to increase credit
access and reduce interest rates in the long run. NBR has the role of licensing and supervising private credit reference bureaus
and also has its own credit register. The private credit reference bureau, Africa, is now operational in Rwanda, offering credit
reports on demand. It must be noted that privacy of creditors is also protected by the credit information systems law and lenders
and creditors must be responsible when reporting information on their clients.
Source: UNCTAD, The New Times, National Bank of Rwanda.
des Assurances au Rwanda (SONARWA), enterprises while mobilizing savings, attracting

and Compagnie Générale d’Assurance et de foreign portfolio investment and stimulating
Reassurance (COGEAR). Other companies private sector growth. Its target is for two initial
include CORAR, AAR, and SURMED. In public offerings a year.
addition, locally-based brokers can also
The Government provides fiscal incentives for
provide access to international companies. The
listing. This includes zero per cent capital gains
sector is regulated by the National Insurance
tax and five per cent dividends tax (down from
Commission.
15 per cent). Currently 10 brokers are members
In addition to insurance companies, there of the RSE.
are a number of state-backed funds. These
include: the National Social Security Fund, one
of the largest financial actors in the country The private sector in Rwanda
and responsible for health, old age and
disability insurance, mainly for people in formal Rwanda Private Sector Federation (RPSF)
employment; the Military Medical Insurance;
The Rwanda Private Sector Federation
and community health insurance funds (see
promotes and represents the interests of the
Health Services).
Rwandan business community. It groups nine
professional chambers (agriculture, commerce,
Capital markets crafts, industry, liberal professions, tourism,
women entrepreneurs, young entrepreneurs,
The Rwanda Stock Exchange was established
finance and ICT) and was established in
in 2011 and is regulated by the Capital Markets
December 1999, replacing the Rwanda
Advisory Council. The exchange provides
Chamber of Commerce and Industry.
for the trading of equity and fixed-income
securities. At the time of writing there were It advocates the interests of the private sector
three listed companies and six bond issues to the Government both through the Economic
being traded. However, this is expected to partnership forum and on an ad hoc basis and
grow as the Government sees the exchange provides business development services to its
as a way to divest itself of shares in public members throughout the country.

Regulations
and procedures
for investors
Set up and exit
Foreign investors can invest in any sector in
expansion, restructuring or rehabilitation of
an existing investment enterprise.
t The law defines foreign and local (or EAC)
III
Rwanda. The two principal laws regulating investors. It specifies that foreign investor
entry are the Company Law 2009 and the means a physical person, business company
Investment Law 2006, or partnership. Foreign investors investing
in projects in Rwanda shall be treated in the
The main features of Rwanda’s company law
same way as Rwandan investors in matters
are:
related to incentives and facilities.
t The law makes it possible to establish a new
t Foreign and local investors who invest
business in three (in practice two) days in
US$ 250,000 and US$ 100,000 respectively
Rwanda with only two procedures.
in a priority sector, of which the list is fairly
t Four types of company are recognized by broad, qualify for an Investment Certificate.
the law including company limited by share, With that certificate, they may obtain
company limited by guarantee, company certain specific benefits, which may include
limited by both shares and guarantee and an exemptions on VAT, import duty and
unlimited company. investment allowances.
t No minimum capital (as a percentage of t Non-fiscal incentives are also provided to
income per capita) is required to start a
foreign investors who invest US$ 500,000
business. The overall cost (as a percentage
in one step, which include permanent
of income per capita) of starting a business is
residence, citizenship and access to land.
10.1 per cent as compared to 99.7 per cent
In addition, investing at least US$ 100,000
in sub-Saharan Africa.
gives the investor the automatic right to
t A foreign company is defined by this law as recruit three expatriates.
a company which is registered in a foreign
t The law allows for free economic zones
country and which is carrying on business in
of three types (see chapter IV for more
Rwanda. The process of registration is just
details).
as simple as that for a domestic company,
via RDB.
t Directors are required to disclose their Registering a business
interests in the company to ensure that The Rwanda Development Board (RDB) func-
shareholders can keep a check on their tions as a one-stop centre with delegated
activities and hence protect their investment. authority from various government agencies,
to register businesses and promote invest-
In order to further encourage investment,
ment.
Rwanda’s investment law provides for further
benefits, including to larger investors, and Registration can also be done online, is free
specifies how these may be obtained. The of charge and is complete within 24 hours.
main features are: As a result, Rwanda was ranked eighth in the
t Investment activity is defined as any new world in 2012 by Doing Business for starting a
activity or business asset, or operation of the business.
Table III.1. Steps for registering a business

1. Check Company name, submit registration application and pay a 15,000 RWF registration fee
2. Pickup Registration card
AN INVESTMENT GUIDE TO RWANDA – REGULATIONS AND PROCEDURES FOR INVESTORS I 21

Obtaining an Investment Certificate limits waiting times for connections for water
and electricity to two days upon application
An Investment Certificate can be obtained at
and payment.
the RDB as long as investors meet the required
threshold of US$ 250,000 for a foreign investor
and US$ 100,000 for a local or EAC investor. Environment-related requirements
For investment in existing projects, one remains The Rwanda Environment Management
on the original investment certificate issued for Authority (REMA) was established in 2005, with
the project and the investment is captured as as one of its main responsibilities, to examine
reinvestment. and approve environmental impact assessment
reports. Investors with projects in industry,
The RDB is required to make and communicate
road construction, housing, tourism, water
its decision regarding the Investment Certificate
and sanitation, energy, railways and airports,
within 10 working days after receiving a
fisheries, mining, agriculture and forestry are
complete application. Should the RDB fail to
required to carry out an environmental impact
act within 10 days, the investor may complain
assessment prior to receiving a certificate of
to the Minister of Trade and Industry who is
clearance from the RDB.
in turn required to investigate the matter and
communicate a decision within five working
days. Local employees
Employment is Rwanda is covered by the
Obtaining land Labour Law 2009. Contracts for a period of six
months or more must be written while those
In terms of access to land no difference is of a shorter period may be oral. Article 34 of
made between foreign and domestic investors. the law provides for contract termination in
All procedures regarding purchase, registration case of changing economic conditions and
and transfer of land titles are carried out at skill requirements of an employer. Termination
the District land offices and Rwanda Natural indemnities and other penalties are only
Resources Authority and are explained in more payable to employees with continuous service
detail in the section on land. of at least 12 months.
Employment contracts can be of three types;

Building and construction
fixed term, open ended or for a defined work.
Obtaining a construction permit takes 30 days Fixed term or work-defined contracts are
and can be done at the Kigali one stop centre. automatically terminated at the end of the
The documents that are obtained include defined period or work. Open-ended contracts
deed plans, location contract, building permit, may also be ended at any time by either party
occupational permit and access to utilities such for legitimate reasons and with prior notice.
as water, electricity and telephone. The RDB While renewal of fixed term contracts is allowed
also provides assistance, with in-house EWSA based on mutual consent, such renewal does
staff to help businesses connect to water and not lead to the fixed term contract becoming
electricity. EWSA also has a client charter that indefinite.
Table III.2. Termination indemnities

Years worked Indemnity
Less than 5 One month
5-10 Two months
10-15 Three months
15-20 Four months
20-25 Five months
Over 25 Six months

Competition policy
Rwanda’s Competition and Consumer Protec-
tion Law 2011 is enforced by the autonomous
Rwanda Competition and Consumer Protec-
tion Commission. Competition and consumer
protection disputes currently fall under the
jurisdiction of the commercial courts.
Rwanda must also conform to regional

competition policy requirements under both
EAC and COMESA. This is overseen by the
COMESA Competition Commission, which
enjoys international legal personality, and the
2009 EAC Competition Regulations, expected
to be regulated by an EAC Competition
Authority. EAC competition law will apply only
for cross border economic activity; for disputes
within Rwanda, domestic law will apply.
Price regulation
The Government to the greatest extent
possible maintains a free market economy
approach to all sectors, allowing all private
sector participants to determine a fair value of
their offerings. Energy and transportation are
Expatriate employees
the only two sectors in which it exercises some
The provisions of the Labour Law 2009 also control, by influencing the price of fuel and
apply to the employment of foreign workers. determining the price of electricity through the
They require both work and residence permits, Rwanda Utilities Regulatory Agency (RURA).
which can be issued by the RDB.
Work permits are usually issued to key Exchanging and remitting funds
personnel or for expatriates coming to work The National Bank of Rwanda governs
in an occupation for which there is a shortage matters relating to the management of foreign
of locally available labour. The permits need to exchange. The Rwandan franc is the official
be renewed on an annual basis. However, an Rwandan currency. Financial transfers to
investor who invests more than US$ 100,000 service debt payments, dividends, royalties
is automatically allowed to hire up to three
and profits are unrestricted. However, they are
expatriate employees, with the residence and
subject to a 15 per cent withholding tax. There
work permit fees of the investor and up to three
are some restrictions on the transfer of earnings
expatriate employees waived for the first year.
by expatriate employees, subject to meeting
In case there is a need for more than three
fiscal obligations. There are also reporting and
expatriate employees, the enterprise can apply
repatriation requirements for exporters with
to the agency and will be subject to the regular
transactions exceeding US$ 10,000. Both
conditions for work permits stated above.
residents and non-residents may open foreign
Fees for work permits fall into two categories. currency accounts with domestic banks. Only
Workers who earn more than RWF 500,000 are authorized dealers are allowed to engage in the
classified as Category A and pay RWF 50,000 foreign exchange business, except where the
per year. Those earning under RWF 500,000 Central Bank permits a specific person or class
are Category B and pay RWF 10,000. Workers of persons to do so, subject to the conditions
from EAC countries do not have to pay a fee. it may impose.

Exit Ownership and property
Closure of business is allowed by Rwandan
law, both on a mandatory and voluntary basis. Land
Exit options are usually determined by the The Land Law 2005 governs the use and
agreement the investor has with other investors management of land in Rwanda; it stipulates
in the project. Company law provides guidance that all land belongs to the Government (the
for the liquidation of foreign companies in State, the cities and districts). Both domestic
Rwanda, including the rules to be followed and foreign investors in Rwanda enjoy the same
by the liquidator while the law on insolvency rights with respect to investment in land. Public
clarifies how a company can close its business land is reserved for public use or environmental
in case of bankruptcy or voluntary closure of protection while private land can be allocated
business. The Insolvency Law streamlines the by the Government to natural or legal persons.
process. It then becomes individual land.

Individual land is leased for up to 99 years can be referred to the next higher authority
through a lease contract and against payment with responsibility for land. Such a petition
of an annual lease fee. The lessee can obtain must be referred to the higher authority
an ownership certificate by paying 10 years within 15 days from the date of notification
of lease fee in advance and by constructing a of the decisions of the lower authority; and
building on the land (or by improving/exploiting 3. if the petitioner is not satisfied by the decision
it conforming to its intended use). Land rights of the higher authority, he or she may refer
can be transmitted through sale, donation or the matter to the competent court of law.
inheritance.
Rights to land may be transferred between Intellectual Property Rights

individuals or they may be guaranteed through
Intellectual property in Rwanda is governed
succession; they may be donated, leased or
by the Protection of Intellectual Property Law
sold; rights may also be mortgaged according
2009. The law regulates industrial property,
to requirements and procedures are provided
and copyright and related rights.
for by ordinary civil law without prejudice to
specific provisions of the Land Law. Industrial property may be registered and
obtained at the RDB. Protection for inventions
Customarily occupied land refers to land that
is provided through patents that are issued
has been governed by traditional rules and
for 20 years with no possibility for renewal.
inherited from parents. Such occupation can
Trademarks may be issued for periods of
be officialized by signing up at the local district
10 years and can be indefinitely renewed
office and obtaining a customary title. Much
at the end of each term. Both patents and
land is still owned customarily and the process
trademarks may be transferred or assigned.
of registering it all will take time. Hence investors
Copyrights and related rights are also available
may often have to buy land that is customarily
under the law; for natural persons such rights
owned but then further ensure that the official
are guaranteed for life and up to 50 years after.
customary title is converted into either a lease
Effective technical protective measures are
or ownership title to be formally registered and
protected against circumvention. Furthermore
recognized by the law.
utility model certificates as well as protection
Individual land can be requisitioned by the rights for designs for layouts and industrial
Government in case it is degraded and designs are provided, though on a more short
unexploited for a period of three consecutive term basis.
years, unless there is a reason why the land
Enforcement of intellectual property falls in the
was not utilized. The owner of the requisitioned
jurisdiction of the commercial courts in Rwanda
land can however request for repossession by whose procedures include conservatory and
demonstrating commitment to productively provisional measures as well as injunctive relief.
exploit the land within a year of repossession. Criminal procedures are available for acts of
Land dispute matters are heard by competent infringement and include penalties involving
courts after certain steps to resolve the dispute imprisonment for up to five years and/or fines
have been taken by the parties. According to of up to 500 million RWF. Special Border
Article 57 of the 2008 Ministerial Order relating Measures have been put in place by the law
to requirements and procedures for a land and the circulation of imported goods may
lease, the following steps must be followed: be suspended if they are believed to infringe
protected rights.
1. the matter is first referred to the authority
that took the decision and the latter must Rwanda is a member of the World Intellectual
provide its response within 15 days from the Property Organization (WIPO) and signatory
date of receipt of request; to the Paris Convention for the Protection of
Industrial Property, the Universal Copyright
2. if the petitioner is not satisfied or no reply was Convention and the Bern Convention for the
given within the time specified, the matter Protection of Literary and Artistic works. Since

becoming a member of the WTO in 1996, National treatment
Rwanda has been subject to the Trade-Related
Foreign investors are treated in the same way
Aspects of Intellectual Property Rights (TRIPS)
as domestic investors in terms of investor
Agreement. It is also an observer of the African
rights and protection of assets. There are
Regional Industrial Property Organization
also no general restrictions on the percentage
(ARIPO) and plans to become a full time
of equity that foreign nationals may hold in a
member soon.
locally incorporated company.
Treaties protecting investment

Investment protection and
Rwanda is signatory to several bilateral
dispute resolution investment treaties.
Expropriation
Table III.3. Bilateral investment treaties
The Constitution guarantees protection of concluded by Rwanda
property. At the same time Article 30 of the Partner
Investment Law 2006 stipulates that the
Belgium and Luxembourg
Government is responsible for the protection
of foreign investment. Expropriation of property Germany
may be carried out by the Government in Mauritius
the public interest defined as development,
South Africa
social welfare, territorial integration and
security. However, there should be prior and Switzerland
just compensation that is calculated as being United States
equal to the value of the land and the activities Source: UNCTAD.
performed thereon by the expropriated person,
calculated in consideration of market prices.
Offences against property are punishable in
accordance with the provisions of the penal
Dispute resolution
code. Rwanda’s framework for dispute resolution
consists of commercial courts, and arbitration
Revocation of investment certificate and mediation. Rwanda is also a member of
the International Centre for the Settlement
The Investment Law provides that in instances of Investment Disputes, the World Bank’s
of fraudulent representation or the provision Multilateral Investment Guarantee Agency,
of false or incorrect material, the investment which offers insurance against non-commercial
certificate may be revoked by RDB by giving risk, and the African Trade Insurance Agency,
a written notice to the investor requiring him which are supported by the World Bank and
or her to show cause within 10 days from Lloyds of London. The African Trade Insurance
the date of the notice why the certificate Agency covers risk against restrictions on
should not be revoked. If within that period a import and export activity, inconvertibility,
satisfactory explanation is not provided, the expropriation, war, and civil disturbances.
Board may withdraw the certificate. The entity
affected may, however, continue to operate as The commercial justice system covers
a business in Rwanda while the legal process commercial, financial, fiscal and other matters
takes its due course or even after the certificate closely related to them, and consists of three
is revoked but then without the associated commercial courts and a commercial high
incentives. court. The three lower courts cover commercial
disputes with a value less than US$ 37,000
In practice RDB has never revoked certificates. while the high court covers disputes above this
It normally relies on counselling to achieve the value as well as appeals against decisions from
desired corrective action. the lower courts.

The Arbitration and Conciliation Law 2009 Enterprises whose turnover is less than or
covers informal dispute resoultion. Arbitral equal to RWF 20 million pay a lump sum tax
rewards are treated as final and binding unless of four per cent of annual turnover. All other
in certain specified exceptional circumstances. companies must pay corporate income tax of
The law applies to both domestic and inter- 30 per cent and register for VAT. Losses may
national commercial arbitration and conciliation be carried forward for up to five years, earlier
with respective rules and procedures re- losses being deducted before later losses.
cognized as long as both parties agree to Fiscal incentives are described in Table III.4.
them. Moreover if during arbitral proceedings
the parties settle the dispute, the arbitral VAT is payable at 18 per cent. Exports of goods
tribunal shall terminate the proceedings thus and services are zero-rated and, barring need
encouraging peaceful agreement. The law for further verification, refunds take place within
also clarifies the case of bankruptcy, where a 30 days of a claim being made. Agricultural
provision relating to arbitration specified in the products, pesticides and fertilizers used in
contract relating to the bankrupt person, shall agriculture, health services and supplies,
be enforceable by the trustee in bankruptcy. education services and the supply of education
materials to learning institutions, bus transport
services and water supplies to rural areas are
Taxation exempt from VAT.
Soft drinks and alcoholic beverages as well as

Corporate taxation
cigarettes and telephone communications are
The corporate tax year is based on the calendar subject to excise duties specified in Table III.5.
year. A taxpayer wishing to use another date
must apply to the Minister of Finance and In addition, a number of withholding taxes are
Economic Planning for permission. payable. These are specified in Table III.6.
Table III.4. Corporate fiscal incentives

Investment allowance 40% on acquisition of old and new assets
50% for investments outside Kigali or for those benefiting from an investment certificate
Training and research expenses 100% deduction from taxable profits
Investors in free economic zones Corporate income tax of 0%

Exemption from 15% withholding tax
Tax free repatriation of profits
Microfinance enterprises Corporate income tax of 0% for five years (under specific conditions)
Publicly listed companies Corporate income tax of 20% if at least 40% of shares sold to public
Corporate income tax of 25% if at least 30% of shares sold to public
Corporate income tax of 28% if at least 20% of shares sold to public
Venture capital companies Corporate income tax of 0% for five years
Collective investment schemes Corporate income tax of 0%
Profit tax discounts 2% with 100 to 200 Rwandan employees

5% with 201 to 400 Rwandan employees
6% with 401 to 900 Rwandan employees
7% with over 900 Rwandan employees
3% for exports of US$3 million to US$ 5 million
5% for exports of more than US$5 million
Source: Rwanda Revenue Authority.

5 I The full schedule of tariffs
is available in the EAC
Table III.5. Excise duties
Common External Tariff Item Excise duty
Handbook.
Fruit juices 5%
Lemonades 39%
Mineral water 10%
Beers 60%
Wines and liquors 70%
Cigarettes 150%
Vehicles 5% to 15% depending on engine size
Powdered milk 10%
Telephone communications 3%
Table III.6. Withholding taxes

Item Tax rate
Withholding tax on payments: Flat rate of 15%

- dividends;
- interest on deposits, bonds;
- royalties, management and technical fees; and
- performance payments
Withholding tax on imports 5% on cost, insurance and freight value of goods imported for
commercial use
Withholding tax on public tenders 3% of the sum of the invoice
Quarterly prepayment Quarterly prepayment of 25% of previous income tax declared
Trade taxes Personal taxation

As a member of the EAC customs union, all Income is taxed progressively at 0, 20 and
goods manufactured in one EAC country and 30 per cent. It is withheld by the employer
sold in another and which meet rules of origin under “pay-as-you-earn”. Self-employed per-
criteria are treated as if they were manufactured sons must declare and pay their own pay-as-
locally, by virtue of there being no internal tariffs you-earn on a monthly basis. These rates are
between partner countries. The same countries specified in Table III.7.
also levy a common external tariff for goods
entering the EAC, with the aim of promoting
Table III.7. Personal rates of income tax
manufacturing and the processing of raw
Annual income in RWF Rate
materials. Under this scheme, raw materials
First 360,000 0%
are imported duty free, intermediate goods are
charged 10 per cent and finished goods 25 per Between 360,000 and 1,200,000 20%
cent.5 Investors in free economic zones (FEZs) All income above 1,200,000 30%
are exempted from paying import duties. Source: Rwanda Revenue Authority.

Benefits in kind are also taxed. Taxes on Double Taxation Agreements
benefits must be declared and settled on an
Rwanda is signatory to several double taxation
annual basis. Tax rates for these are specified
agreements.
in Table III.8. The following are not taxed:
t contributions to the state social security fund; Table III.9. Double taxation agreements
concluded by Rwanda
t pension payments under the state social
Partner Type of agreement
security system; and
Belgium Income and capital
t employer’s contribution to a qualified pension
EAC Income
fund not exceeding, when combined with
that of the employee, 10 per cent of the Mauritius Income
employee’s income from employment or South Africa Income
RWF 1,200,000 p.a. whichever is lower. Source: UNCTAD.
Table III.8. Taxation of benefits in kind

Benefit offered Tax rate
Company car 10% of employment income excluding the value of the benefit in kind
Accommodation 20% of employment income excluding the value of the benefit in kind
Interest on loan 10% of income gained as a result of difference between interest paid and what would have been
paid if the rate offered to commercial banks by the BNR had been used
All other benefits Full market value is added to employment income and taxed as such

Areas of opportunity
Rwanda’s location, climate and business-
friendly environment coupled with stability and
security make it a country, which while small,
Efforts have been made to connect schools,
universities, government departments and
65 RDB telecentres providing business
IV
offers investors a range of niche opportunities. development services to small enterprises. It
has also established an ICT park (see Box IV.1).
What follows is a description of Rwanda’s At the same time, over 1,200 primary schools
most attractive and fast-growing sectors. are equipped with computers and at least
These include the sectors of ICT, for which 10 per cent of Rwanda’s secondary schools
the Government is keen to position itself as a have wireless Internet.
hub for the region; tourism where the country
is positioning itself as a high-end ecotourism There are a number of examples of
niche coupled with a central location as a e-government applications demonstrating the
regional conference centre; power generation, Government’s lead in this area. The Rwanda
where there is an urgent need to match supply Revenue Authority has embarked on an
to demand and for which ample resources are initiative to enable businesses to submit tax
available; agriculture, in which there remains returns online. Kiosks are also being installed
plenty of space to increase productivity in tea around the country to cater for businesses
and coffee and improve value-added to assert without internet connectivity. The Department
the Rwanda brand, and where Rwanda has of Immigration and Emigration supports online
an opportunity to emulate Kenya’s success visa applications. Applicants can upload
in horticulture and floriculture; mining in supporting information, track applications and
which there remains unexplored potential print out confirmations with which they can
and opportunities to service operations in travel to Rwanda. The RDB enables investors
eastern Democratic Republic of the Congo; to register their businesses online. Investors first
and privatization as the Government decides obtain an e-signature online, with which they fill
to divest itself of stakes in banks, insurance, in the necessary form, upload documents and
telecommunications, hotels and agricultural receive their business registration certificate
operations. Opportunities also exist in logistics, by email. E-Soko is a system that provides
where Rwanda’s key position needs to be farmers, consumers and traders with the latest
matched by efficient access to neighbouring market prices for agricultural commodities. The
markets, manufacturing for which investors data covers 50 markets in the country with
can gain in import substitution for the local plans to add 20 more.
market, and special economic zones, which
Demand by the public sector is increasingly
offer a very attractive fiscal package.
complemented by the needs of the local private
sector leading to a burgeoning but nevertheless
small-scale Rwandan ICT industry, who have
Information and developed experience both in developing
communication technology software solutions and in providing network
solutions such as a local area network (LAN),
The 2,300 km fibre optic backbone, connected security measures, wireless and data centres.
to the SEACOM undersea cable has significantly However, foreign investors have tended to
improved Rwanda’s connectivity and prospects import their own solutions. The Government is
for the ICT sector. The Government is keen to interested in attracting foreign investors to fill
develop business process outsourcing and this gap and partner with local forms. In the
information technology enabled services. medium term, there may be feasibility to provide
services to the EAC and wider COMESA
The Government has taken the lead in developing market. With many entrepreneurs in the local
both the infrastructure and the sector through ICT sector being self-taught but sending their
the development of e-government applications. staff abroad to train, and graduates in ICT
AN INVESTMENT GUIDE TO RWANDA – AREAS OF OPPORTUNITY I 31

Box IV.1. ICT Park in Rwanda
Rwanda established an ICT park and incubation facility in Kigali in 2006. Kigali ICT Park is managed by the Rwanda Development
Board, and promotes innovation, private sector development, capacity-building and sustainability. The Park offers a service
package including subsidized office space, internet connections, power, and other facilities. There are three main objectives: (a)
incubation (for ICT start-ups); (b) technology production and exhibition (by ICT companies); and (c) the Multi-Disciplinary Centre
of Excellence in ICT. At least six ICT companies have graduated from the Park, and another 12 are being incubated. There are
plans to expand the scope and function of the Park in the coming years.
Source: UNCTAD Information Economy Report 2011, based on information provided by UNECA.
subjects emerging from the Kigali Institute of is a savannah park with typical wildlife – lion,
Science and Technology and the Adventist buffalo, giraffe, elephant, hippopotamus,
University of Rwanda, the country is also hyena, impala, gazelle – that is progressively
building a base of indigenous skills necessary being restocked. There are also water bodies
to the development of this sector. ideal for water sports and fishing, particularly
Lake Kivu in the west and Lake Muhazi in the
east. Lake Kivu also offers beautiful beaches,
Tourism jutting peninsulas and islands.
The Government, through its Sustainable

Rwanda’s tourism sector has been growing Tourism Development Master Plan has
slowly but steadily with total visitor arrivals designated six destination management areas
reaching 666,000 in 2010 and receipts of outside the designated central hub of Kigali.
US$ 200 million. Tourists come principally from These are the Volcanoes Area (north), Muhazi
the United States and the United Kingdom Area (east), Akagara Area (east), Nyungwe
of Great Britain and Northern Ireland. The Area (west), Kibuye (west), and Gisenyi in
country has substantial advantages in the western Rwanda, to be the focus of tourism
tourism sector: great natural beauty with its development.
hills and lakes, a high-altitude climate, a good
road network and a secure environment. It is There are currently 5,000 hotel rooms in
also increasingly linked by direct flights to the Rwanda of which approximately 3,000 are rated
neighbouring region, Addis Ababa, Amster- three stars and above and the Government
dam, Ankara, Brussels, Dubai and through is keen for that number to increase. Rwanda
Nairobi to a much wider range of destinations. currently serves as a tourism add-on to other
trips to the region, principally Kenya. However,
Rwanda’s natural assets include six volcanoes, the aim is for it to eventually become a long-
23 lakes and numerous rivers. Spectacular haul destination in its own right. To this end,
volcanoes and dense tropical forests dominate Tourism Promotion Services East Africa,
the north of the country, while there are hills operating under the Serena brand is aiming to
and valleys, lakes and rivers, and savannah expand its portfolio to seven hotels within the
as well as tropical vegetation in the rest of country, allowing a fully national circuit of ten
the country. The Parc National des Volcans days (see Box IV.2).
in northern Rwanda is home to the world’s
largest number of endangered mountain The Government is also taking steps to increase
gorillas, who live in a protected area and can the attractiveness of Rwanda as a high-end
be viewed in their natural habitats at a fairly tourism destination. Akagera National Park is
close range. 670 different bird species have being fenced and restocked with lions under
been recorded in Rwanda, as have 100 orchid the Akagera Management Company, a joint
species in the Nyungwe Forest National Park, venture between the Rwanda Development
also home to 13 species of primate. The third Board and Africa Parks Network, a South
park in Rwanda, the Akagera National Park African not for profit company. Eventually it will

need to satisfy the need of tourists to Africa to use of its good regional connections. To this
see the big five game. Improvements are also end, it is building a convention centre and
being made to other parks. At Nyungwe, a hotel, to be managed by Radisson, of which
canopy walk is being installed. the biggest room would have seating space
for 3,000 delegates. This would make Kigali
Other attractions being promoted by the
the fifth largest convention centre in Africa after
Government include the annual Tour du
Cape Town, Marrakesh, Cairo and Nairobi. The
Rwanda cycle race. Established in 2009 and
convention centre will add significant capacity
organized by the Rwanda Cycling Federation,
to a growing conference market in Rwanda
it draws an international participation and
with the country already hosting a number
highlights the country’s potential as an activity
of regional conferences focused on issues of
and sports tourism destination.
conflict resolution, health and gender, three
The Government has decided to limit tourism to areas in which the country has made a mark
high-end ecotourism and the cost of a holiday for itself. Accommodation for conferencing will
to Rwanda is therefore in consequence. To be supported by a number of business hotels
that end, investment would need to reflect the opening their doors in Kigali. These include a
potential of such a market. Marriot and the New Century Hotel.
In order to capture further value-added and The massive increase in capacity means that
volume the Government is embarking on a the Government is required to make efforts to
strategy to attract conference tourism, making market the sector abroad. Offices have opened

Box IV.2. Making Rwanda a long-haul destination in its own right
Already well established in the East African region, Tourism Promotion Services East Africa Limited, owned by the Aga Khan
Fund for Economic Development and operating under the Serena brand, has its sights set on Rwanda. Currently it operates two
properties. The first is in Kigali and attracts principally business and conference visitors. It was taken over from the Government
and is now majority-owned by the group. The second is at Gisenyi on Lake Kivu by the border with the Democratic Republic of
the Congo focusing mainly on tourism.
The chain has plans to expand to seven properties, which together will enable visitors to enjoy a 10-day circuit targeting long-
haul travellers. The properties will include:
t Nyungwe Park to observe the chimpanzees and visit a cultural village;
t Ruhungeri, which will provide a spa, and opportunities for trekking and mountain climbing;
t Kibuye, also on Lake Kivu;
t the Parc National des Volcans to see the gorillas; and
t Akagera National Park, where the chain will take over a lodge abandoned by Dubai World.
The Aga Khan Fund also has plans to establish in other sectors in Rwanda. As a majority shareholder of the Nation Media Group
and with a newspaper and FM radio already operating in Rwanda, it also aims to bring in a TV station. Plans are underway to
establish the Diamond Trust Bank and Jubilee Insurance. Aga Khan Health Services may open a hospital and medical faculty,
which would be the second largest in the region after Kenya.
Source: UNCTAD.
in Australia, Canada and China, with an office nine per cent). A 1,000 MW demand is
under consideration in the United States, and forecast for 2017.
the country has a presence at the London and
Berlin trade fairs. The Rwanda Development The country has substantial hydroelectric
Board is also considering direct to consumer resources, as well as natural gas deposits under
marketing. Lake Kivu, which could make Rwanda self-
sufficient in electricity or, even, a net exporter.
In order to develop capacities in the sector, the But the development of thermal power plants
Government is keen to attract hotel training to run on natural gas, or dam constructions
facilities. A Tourism Bill will provide for operating to increase hydroelectric production, requires
licences, harmonize hotel classifications with both time and investment.
those of the EAC and specify certification for
staff. A common visa for EAC countries is also Opportunities therefore exist in power
being envisaged, reducing the cost for tourists generation and EWSA, the country’s national
to add Rwanda on to their holidays elsewhere power and water distributor is open to
in the region. signing agreements with independent power
producers. Sources can include methane
extraction, geothermal, hydro power and peat.
Power generation With the rates for electricity currently charged
to the end-user (see chapter II), returns can
As mentioned in chapter II, domestically ge- be high, even if the Government’s intention is
nerated installed capacity stands at 84.9 MW to reduce those rates over the medium term.
of which 75.5 MW is available. A significant However, at the time of writing, a challenge
portion of that is generated from imported remained for the Government of untying itself
fossil fuels. A further 15.5 MW is imported from contracts passed with producers whose
from neighbouring countries. The gap between projects had not gone through, in order to sign
demand and domestic supply is expected agreements for new projects. All producers will
to grow as the country develops and more be regulated by the Rwanda Utilities Regulatory
of it is electrified (electrification stands at Agency.

One of the most significant and soon to start
producing is the Kivuwatt methane plant on
Agriculture
the shores of Lake Kivu in Kibuye (see Box Coffee
IV.3). The plant is likely to yield 25 MW in the
first phase and it is estimated that methane Coffee is central to Rwanda’s economy. It is
extraction from Lake Kivu could yield a total of the second largest export item by value, with
500 MW although under an agreement with the production in 2010 of 20,000 tons, worth
Democratic Republic of the Congo, Rwanda US$ 57.1 million and representing about
would be limited to 350 MW. 24.0 per cent of total exports.
Other energy projects are currently under The coffee is cultivated by around 400,000
study. Prospects include the following: smallholders on 52,000 hectares. Most coffee
is sold as green beans through farmers’
t two other proposals to extract methane from
cooperatives to exporters who in turn sell to
Lake Kivu;
commodity traders. Coffee is 95 per cent
t detailed and promising geothermal explo- Arabica and is mainly exported to the United
rations are taking place in the Volcanoes States and Germany, where it is blended with
National Park and the faults associated with other beans.
the East African Rift near Lake Kivu, with
Chevron (United States of America), Kengen The little coffee that is roasted in Rwanda
(Kenya), the Icelandic Geosurvey and the tends to be sold locally, though coffee that has
Institute for Technology and Renewable been exported unblended under the Rwanda
Energies (Spain); appellation has been recognized as a high
quality product, winning cupping contests
t funding being sought for a 145 MW hydro
internationally, and buyers are willing to pay a
plant in Rusizi on the western border;
premium. Indeed, in 2007, Starbucks featured
t a large number of additional hydro plants Rwandan coffee in its stores in the United
under study; and States, followed by stores in Europe a year
t two proposals to extract and generate power later. Rwandan coffee has also been sold under
from peat being studied, with interest from its appellation by Green Mountain Coffee,
Indian and Chinese investors. Intelligentsia, and Counter Culture Coffee.
Box IV.3. Generating energy from the depths of Lake Kivu

While it has long been known that Lake Kivu contains significant deposits of methane gas, it is only now that its potential is
coming on tap. Contour Global, the energy branch of United States based Reservoir Capital, is finalizing the first phase of a
project to extract methane from the depths of Lake Kivu and use it to generate electricity. Its first phase, costing US$ 140 million
is likely to yield 25 MW, and will operate under the name of the company’s Rwandan subsidiary, Kivuwatt. In its second phase it
could yield 100 MW, some of which could be exported to neighbouring Uganda.
The extraction takes place 30 km offshore through four gas extraction facilities barges. These are connected by a pipeline ten
metres below the surface of the lake to an onshore marine landing site. The generation plant itself is onshore at Kibuye. Under
this technology, water is pumped up from depths of 360m, the methane is extracted, and the water, without methane, is pumped
back to a depth of 240 m. The technology still needs to be fully tested which is why the first phase is only for 25 MW. Risk factors
include springs in the lake and uncertainty over how the rebalancing of water types will affect the lake.
The novel nature of this venture meant that no outside contractors could be found and Contour Global found itself having to
manage the project. The design also had to change along the way in line with evolving Rwandan regulations. However, the
company is positive about its experience working with the Government and about the project’s prospects.
Funding for the project was provided by the principal sources of development finance, including the World Bank, the African
Development Bank, the Africa Infrastructure Fund and the Belgian Development Fund; funding which could also likely be made
available to other investors entering the sector.
Source: UNCTAD.

Given the favourable climatic conditions, There are opportunities for investment in quality
the soil quality and altitude, the challenge for improvement and value addition through:
Rwanda is to improve its product quality and t the construction of coffee washing sta-
market image, so as to increase the value it
tions which are crucial for the end product
receives for its crop from its current US$ 2 to
targeting the up-market niche segments
3 a kg to international market prices. Several
(requiring an average investment of
projects have been launched under the aegis
US$ 150,000 for a washing station with a
of OCIR-Café, Rwanda’s coffee authority, often
capacity of 200 tonnes);
with donor support. These have broadened
the market presence of Rwandan coffee and t the construction of roasting facilities on a
helped Rwandan farmers capture a higher large scale;
percentage of the value of their product. Many t the setting up of modern coffee-processing
of these initiatives focus on building market and packaging plants; and
awareness in Europe and North America,
t the operating of large-scale coffee plantations.
while at the same time improving coffee
washing, selection, pulping, fermentation
and drying processes and setting higher Tea
selection standards in Rwanda. To this end,
Like coffee, tea is a key part of Rwanda’s
180 washing stations are now operational
economy. Exports in 2010 reached US$ 33.9
and the Government is investing in a coffee
million and accounted for 14.3 per cent of
processing plant with a private company.
its exports, making it the third export item by
There are other challenges that can equally value. According to Rwanda’s national tea
be opportunities. As a landlocked country authority, OCIR-Thé, the sector employs an
Rwanda’s coffee producers face high transport estimated 60,000 people and has 12,000 ha
costs. Moving coffee cherries quickly over under cultivation. Nearly all the tea is grown at
Rwandan roads is one concern; moving above 1,500 metres, in soils which permit the
processed beans out of the country in a timely production of very superior tea. Like coffee,
and cost effective way is a second concern. tea is also grown mainly by small-holders

(67 per cent) grouped into 13 cooperatives role in sub-Saharan Africa’s exports. A success
but, in addition, there are also 11 tea factories story in East Africa is Kenya, where the export
with associated estates, two of them still state- of flowers, fruits and vegetables generated
owned. $ 1.16 billion in foreign exchange in 2010 with
destinations including the Netherlands, the
Two kinds of tea are grown, swamp tea and United Kingdom, France, the United States
mountain tea, of which the latter has a lower and the United Arab Emirates. The sector has
yield but higher quality. In general, yields per grown quickly in Kenya, from small beginnings,
hectare are lower in Rwanda than in competitors and can integrate outgrowers, to whom
like Kenya and Sri Lanka and studies show that exporters provide extension services. Together
yields of 3 tonnes of black tea per hectare could with similar climatic conditions to Kenya
be reached in the marshlands and 2.5 tonnes in although alternating rainfall seasons (March to
the hills, up from 1.5 tonnes currently. May and September to November), and rich
volcanic soils, this suggests the possibility of
Most tea is produced by the CTC (cut, tear,
successful replication in Rwanda.
curl) method and apart from a limited tea bag
production for the local market, there is little The critical requirements for successful
value addition. Ninety per cent of tea is sold exports are compliance with the sanitary and
directly at auction in Mombasa. The Government phytosanitary standards of importing countries
is keen to encourage investment in this sector and the efficient organization of logistics
to increase value-addition through blending, (essential to the export of perishable products).
packaging and branding. The Government Foreign investors have helped meet these
is also preparing its two last tea factories and requirements in Kenya and could do so in
estates for privatization. The first is Mulindi, Rwanda. The Government is also negotiating
one hour from Kigali, with 2,013 ha of which air cargo capacity. Regulations and procedures
1, 437 are planted. The second is Shagasha in for importing key inputs (seeds, fertilizers and
the Western Province, with 1,573 ha, of which equipment) have been streamlined and a
1,306 are planted. In addition, the Government strong institutional base has been put in place
encourages investors to set up independent to support the sector, including out-grower
tea factories and to establish contracts with education and skill-development, quality and
surrounding grower cooperatives. To this end certification programmes.
opportunities have been identified in Karongi
District in Western Rwanda, at Gatare in In 2009 according to the Food and Agricul-
Nyamasheke District and at Mushubi in ture Organization of the United Nations (FAO),
Nyamagabe District. In order to increase value- Rwanda exported US$ 3.25 million worth
added orthodox processing methods are also of fruits and vegetables. These included
being encouraged. US$ 1.37 million of dry beans, US$ 334,000 of
green beans, US$ 22,000 of carrots and over-
The Government, through OCIR-Thé provides all US$ 42,000 of fresh fruit and US$ 5,000
continuing support to the sector. It markets of tropical fruit. With demand growing in both
the Rwanda’s tea abroad, assists investors Western and Middle Eastern markets for fruits
and cooperatives, identifies ways to improve and vegetables, buoyed by a trend towards
the competitiveness of the sector and carries more healthy eating, opportunities exist in this
out research on methods of growth, plant sector. Opportunities also exist in selling high-
densities, fertilizers, pruning methods, plucking land crops grown in Rwanda to the lowland
frequency, soil fertility, species and clones, regions of the EAC.
adaptation of technology, and soil sustainability.
With regards to floriculture, while attempts
have failed in the past due to sanitary
Horticulture and floriculture
and phytosanitary standards and market
The horticulture and floriculture sector is uncertainty, the Government is keen to promote
mostly undeveloped in Rwanda, although investment in this sector and has earmarked
it has become important in many African 200 ha of land in the Eastern Province for a
countries and plays an increasingly important flower farm. With an investment in the form of

a public private partnership of US$ 21 million The country’s mining sector consists mainly of
it believes that production could start at artisanal miners, cooperatives and a limited num-
60 million stems a year initially, rising to ber of private industrial mines, of which some
95 million stems a year. result from privatization. The sector contributed
1.24 per cent of GDP in 2010 with revenues
Other opportunities: herbal products of US$ 67.7 million, up from US$ 10 million in
2003. The Government’s strategy is to increase
Rwanda’s high altitude, soil composition the size of the industrial mining sector.
and climate could also lend themselves to
the production of other high-value, low-bulk Foreign investors already established include
agricultural products for export. Specifically, Transafrica (Belgium), Kivu Gold (Canada),
conditions may be particularly suitable for Rogi Mining (Russian Federation) in gold; and
herbal products, to be used in medicines, Mineral Supply Africa (United Kingdom and
health supplements or cosmetic products. The Belgium), Sotraco (Switzerland), Rutongo
global market for herbal products is estimated Mines (South Africa) in the three major mineral
to reach US$ 93 billion by 2015. Indian investors elements of tin, tungsten and niobo-tantalite.
have been prominent in this area and may find
the potential in Rwanda of much interest. The sector is regulated by the Rwanda National
Resources Authority (RNRA) under the Ministry
of Natural Resources. The overarching law is the
2008 Law on Mining and Quarry Exploitation.
Mining It describes the requirements to obtain a two-
year prospecting licence and a subsequent
Rwanda is part of the Kibaran rock system, rich four-year research licence and how to convert
in mineral deposits, stretching from the northern these into five-year renewable small mine
United Republic of Tanzania through south- exploitation licence (up to 40 metres deep)
western Uganda, Rwanda, Burundi, eastern or a 30-year renewable vast mining conces-
Democratic Republic of the Congo, Zambia sion licence and accompanying exploitation
and Angola. The principal mineral output agreement. It also details procedures to obtain
is casseterite (tin), coltan (niobo-tantalite), a quarry exploitation licence. Together with the
wolfram (tungsten) and gold. However, the implementing decrees it also details issues
full geological potential or Rwanda remains related to environmental impact, transfer of
to be discovered. Box IV.4 identifies possible licences and taxes (see Table IV.1).
mineral targets for the sector, taking into
account current mining activities and those in It should be noted that Rwanda provides a
adjacent countries. stability clause fixing the fiscal framework in
Box IV.4 Possible Mineral Targets

t Tin, coltan and wolfram: provides short to medium term investment opportunities. Currently all production has a ready market.
t Base metals: known occurrences of nickel and others in neighbouring countries provide an indication of their possible
presence. Requires long term exploration strategies.
t Precious metals: likely small occurrences of gold and possibly associated silver. There are larger deposits being exploited in the
Democratic Republic of the Congo and the United Republic of Tanzania, which have yet to be identified in Rwanda.
t Rare earth minerals are known and could provide a rapid return for the electronic and similar markets.
t Semi-precious gemstones: there may be some potential, but it is most likely to be small scale, and therefore accessible to
local as well as specialist foreign investors.
t Others: industrial minerals, such as talc, kaolin, travertine, dolomite, sand, clay, diatomite, etc., which will be important in
building infrastructure.
Source: UNCTAD.

force at the start of an exploitation licence for the investor’s favour, the investor may opt to
the duration of that licence. However, if during benefit from those changes.
that period, the fiscal framework changes in
Table IV.1. Principal fiscal features of the mining sector

Prospecting stage Right to temporarily import all equipment free of duty
Full relief from:
- corporate income tax
- capital gains tax
- VAT on imports (on condition of being registered as investor)
Research stage Right to temporarily import all equipment free of duty
Full relief from:
- capital gains tax
Exploitation stage up until first production Full relief from:
- capital gains tax
Fees paid for extractable mining and quarry
Prospecting stage 25 RWF per ha per year
Research stage 100 RWF per ha per year
Exploitation stage up until first production 200 RWF per ha per year
Exploitation stage as of first production 200 RWF per ha per year
Exploitation of quarry 5 RWF per square metre extracted
Taxation of Mining Activities
Taxation of quarry licences Eligibility for a licence 15,000 RWF
Renewal of a licence 25,000 RWF
Transfer of a licence 25,000 RWF
Assignment of a licence 25,000 RWF
Renting out a licence 25,000 RWF
Renouncing of a licence 25,000 RWF
Taxation of mining licences
Prospecting Licence Eligibility for a licence 50,000 RWF
Renouncing a licence 25,000 RWF
Exploration Licence Eligibility for a licence 100,000 RWF
Small Mine Extraction Licence Eligibility for a licence 150,000 RWF
Concession Licence Eligibility for a licence 250,000 RWF
Sale of a licence 1,000,000 RWF
Mortgage of a concession 1,000,000 RWF
Renouncing a concession 250,000 RWF
Source: Ministry of Natural Resources.

An important consideration remains Rwanda’s
location as it has an impact on the logistics
Privatization
lines for imports and exports. This becomes The Government currently has a broad portfolio
particularly significant for large industrial scale of assets consisting of wholly-owned or partly-
exploitation of base metals, which require bulk owned companies across a range of sectors.
concentrates to be exported and plant and These are managed by the Government
equipment to be imported. This suggests that Portfolio Department in the Ministry of
a more profitable exploitation would lie in the Finance and Economic Planning. In order to
exploitation of high value-added minerals that promote private sector development, in line
not require significant power such as precious with Rwanda’s Vision 2020, the Government
metals, coltan and gemstones. However, established the privatization programme in
Rwanda’s location is an asset for servicing and 1996. The Government sees the main objectives
acting as a transit point for mining operations of privatization as (a) relieving the financial and
in eastern Democratic Republic of the Congo administrative burden on the Government,
(see below). (b) improving the efficiency, productivity and
A further consideration is the local skills financial, accounting and budgetary discipline
base. The current profile of the mining sector of the enterprises privatized, thus augmenting
means that investors will need to plan training sources of government revenue, (c) ensuring
of technicians, laboratory staff, mechanics more accountability, (d) reducing the size
and all the other skills required in mining. The of the public sector in the economy and (e)
Government facilitates work permits where broadening the ownership base of Rwandan
skills cannot be found locally and can facilitate enterprises and (f) stimulating Rwandans to
the establishment of training programmes participate in private ownership and to enhance
with local educational institutions. Models entrepreneurship among Rwandans.
for this are already present in neighbouring Since the programme came into force,
Uganda. 60 companies have been successfully priva-
Given the size and unrealized potential of the tized. Seven companies have been liquidated
mining sector, opportunities will mainly be of while 18 are awaiting privatization (see website
interest to short term investors such as juniors, www.rdb.rw for more details). One of the most
who often concentrate on exploring to discover successful examples of privatization so far has
potential deposits and then seek a partner to been Rwandatel, which is now the leading pro-
develop any discovery, or entrepreneurs with vider of high speed internet in the country. At
knowledge of local investment conditions, who the same time, three of the hotels privatized
may be seeking to diversify. in the late 1990s, have now reverted to state
ownership, following disagreement between
Aside from exploration and development, the Government and buyers as to whether
opportunities also exist in the areas of commitments to rehabilitate the hotels had
mining supplies at every stage of the mineral been met.
investment cycle. This industry could equally
serve the mining industry in eastern Democratic Three methods of privatization are currently
Republic of the Congo. Potential exists in: employed. The newest method, which the
Government is keen to encourage further, is
t building products: steel fabrication (e.g., steel through the Rwanda securities exchange. An
sections for mine buildings), cement supply example of such a privatization is the Bralirwa
and concrete products; Brewery. Another method is through public
t consumables: mines are large consumers of tender. For strategic enterprises calling for
tyres, fuel, lubricants, chemicals, explosives substantial investment and specific know-how
and grinding balls; and the Government encourages public private
t technical services: geological and mine engi- partnerships.
neering services, environmental engineering, For privatization by tender, which his managed
drilling and construction will be extensively by the RDB, the process begins with a public
used as the industry develops.

invitation to tender in two parts, a technical Public private partnerships (PPPs) are dealt
offer and a financial offer. The technical offer with by the PPP secretariat in the Ministry
is opened first and, if it is satisfactory, the of Finance and Economic Planning. The
financial offer is opened next. The results of secretariat is charged with preparing feasibility
the evaluations of the bids are presented to studies and structuring the deals after which
the Cabinet for a final decision. Divestiture the RDB is charged with finding a strategic
is followed by monitoring to ensure that the investor. However the international tender
buyer respects the terms of the contract and process may be commissioned by the Ministry
implements the business plan proposed. Table directly for huge projects.
IV.2 provides a comprehensive overview of
the procedure for privatization and the parties The Government is keen to encourage public
responsible for each step. PPPs, especially for the development of
Table IV.2. Procedure for privatization by tender

Step Activity Parties involved Outcome
Preliminary phase Contacting responsible ministry to RDB Notification of potential
obtain authorization for the sale government assets for sale
of government assets under their
supervision
Contacting board of directors, site RDB Obtain information and gather
visits and contact with personnel stakeholder support for the sale
Drafting terms of reference for RDB Commission consultant or
consulting bids for auditing the consultancy firm to perform audit
proposed enterprises
Diagnosis and Perform diagnostic financial, legal Consultant and RDB Present audit report to RDB with
statutory framework and social audit recommendations
Liquidation Consultant and RDB Liquidate company in line with
regulations
Commission valuation of RDB Invitation to tender submitted,
government asset through tender best bidder selected and valuation
process completed with valuation report
submitted to RDB by consultants
Selling the Invitation to potential investors RDB Potential bidders are invited and
Government asset to tender for purchase of submit their proposals
government assets
Evaluation of tender RDB and representatives of Best bidder identified with one
relevant government agencies or two reserve bidders (runner
up bids)
Cabinet paper written to RDB and representatives of Cabinet approval or decline
seek approval for sale of the relevant government agencies
government asset to best bidder
Once approved best bidder RDB and representatives of Sale completed, contracts signed,
is notified and negotiations relevant government agencies regularization of workers and
commence recovery of debts
Monitoring and Follow up on business plan RDB Ensure business plan is
evaluation execution and implementation implemented as per the proposals
of agreements. This takes on during sale
average 5-7 years
Recovery of money owed to the RDB Recover money owed to the
government with regard to the government
sale in case the asset was not
totally paid for
Source: RDB.

infrastructure. Opportunities identified so clearance is appreciated by investors as being
far include Bugesera International Airport swift. However, a greater presence of logistics
to replace the current international airport operators will enable investors and traders in
at Kigali; a railway to link Kigali to the United Rwanda to find better solutions to their needs.
Republic of Tanzania; Hydro power plans at Currently they need to group together to fill a
Rusizi and Rusumo; and geothermal methane container.
power generation.
Already present in Rwanda and making use of
Whichever method chosen, it should be recalled the location as a hub for the regional market
that the process of privatization involves a are SDV Transami (part of the Bolloré group),
process of negotiation with government and World Freight Panalpina, AGS Fraser’s of South
clear communication is key. Africa and Maersk. However, with the growth in
retail and wholesale businesses as well as the
boom in construction, significant opportunities
Other opportunities for investment exist in this sector.
Transport and logistics Manufacturing

Despite Rwanda’s location bridging EAC and
While Rwanda’s internal market remains small,
the Democratic Republic of the Congo, getting
there are opportunities for small investors
goods in and out of the country remains a
for import substitution. The country runs a
logistical challenge, mainly for reasons outside
substantial trade deficit because it imports just
the control of the Rwanda authorities. This
about everything. This offers opportunities for
includes congestion at the port of Dar es
Salaam, an approximate seven-day delay import substitution, for example in consumer
to clear goods through Mombasa or Dar es goods, the largest category of imports. Current
Salaam ports, and the time for containers to manufacturing takes place in beer, soft drinks,
arrive by truck or a combination of train and cigarettes, sugar, wheelbarrows, soap, cement
truck from Kenya, through Uganda and to (see Box IV.5), mattresses, plastic pipe, roofing
Rwanda (for 70 per cent of imports), or from the materials, textiles and bottled water. Being a
United Republic of Tanzania. In total a container landlocked country with high transport costs,
can take between two and three weeks to also means that there is a certain natural
arrive in Kigali following the arrival of the ship protection for investors in the country. The
at port. At the same time, roads within Rwanda Government is making available industrial land
are of good quality and Rwandan customs through the Kigali Free Zone.
Box IV.5. African Development Bank finances cement plant

In October 2010, the African Development Bank (AfDB) approved a US$ 30 million loan to finance the construction of a
700,000 tonne per annum cement plant in Rwanda that will replace the existing 100,000 capacity plant. The aim is to make
up for cement supply shortage and satisfy local demand, which continues to be high, mainly driven by housing sector growth
and infrastructure development. The plant will also operate several open-pit quarries located near the plant site.
The project will be the Bank’s first private sector industrial investment in Rwanda, and one of the largest industrial investments in
the country. It will therefore pave the way for other private sector projects by demonstrating local entrepreneurs’ ability to initiate
large transactions with significant knock-on effects on the national economy.
The operation will further boost the construction sector and foster economic growth. It is estimated that 285 jobs will be created.
It will also provide additional resources to the Government in terms of foreign currency savings through import substitution, as
well as improve regional trade within the EAC.
Source: African Development Bank.

Free economic zones and incentives telecommunication switching and distribution
centres;
Although no free economic zone currently
exists in Rwanda, the Government is in the t Petroleum-related: storage tanks, head office
process of building a free economic zone in functions, maintenance; and
Kigali to serve as a commercial platform to t Other: open spaces for recreational and land-
access the regional market. Land for the FEZ scaping purposes The targeted sectors in-
has been acquired at Nyandungu, east of clude coffee/ tea, horticulture (cold storage),
Kigali, about 15 km from the city centre and ICT, textiles and apparel, petroleum (storage),
about 5 km from the Kigali International Airport. dry goods (warehousing and merchandizing),
Initially, 100 hectares are to be developed, with and high-value trading and crafts.
expansion occurring as needed.
In order to be located within a FEZ and therefore
The FEZ is envisaged as a mixed-use free zone benefit from the duty free import of goods and
covering a diversity of uses: inputs and other fiscal incentives described in
t Industrial: logistics, warehousing, merchan- chapter III, an investor must meet one of the
dizing, distribution centres, light and medium following conditions:
manufacturing, processing, relabelling, and t qualify to be in an export commodity
assembly; processing zone (EPZ) or single enterprise
t Commercial: call centres, conference and considered as export processing zones
training centres, offices, showrooms, bank- (SEEPZ) by being a manufacturing company
ing facilities Administrative and institutional: that exports at least 80 per cent of production
customs facilities, operational and mainte- or a professional financial and technical
nance facilities, religious facilities, day-care investment enterprises engaged in export of
facilities, parking structures, fire and police services; or
stations; t qualify to be in free trade zone (FTZ) by
t Utilities-related: water treatment and stor- being a trading enterprise that exports at
age facilities, sewage units, power stations, least 80 per cent of production.

Investor perceptions
This chapter summarizes the results of consul-
tations with the private sector in Rwanda. The
consultations were carried out through indi-
quickly and were reliable and hard working.
No industrial labour problems were mentioned.
V
vidual meetings with investors, firm managers Infrastructure
and representatives of business associations.
Overall investors were positive about several
This summary should be seen as no more than aspects of the country’s infrastructure.
indicative of private sector opinion in Rwanda. This included roads within the country,
telecommunications and the availability of
fibre optic connections to the outside world.
General observations Concerns were raised about road transport to
the surrounding region and specifically about
getting containers from sea ports to Kigali.
Overall, investors were positive about their
Delays of three weeks to one month were
decision to establish in Rwanda. They cited
cited although it was made clear that this
the absence of corruption, the ease of doing
was due to factors beyond the jurisdiction of
business and the advantage of getting early
the Rwandan authorities. Indeed, Rwandan
into the market. Many also cited the proactive
customs clearance was praised for its speed
role being taken by the Government to integrate
and efficiency. Power supply within Kigali was
with the surrounding region.
reliable but was not present everywhere in the
country. Investors, especially in the tourism
sector, were pleased with the efforts being
Specific points made by the Government to attract foreign
airlines and to expand the reach of the national
Licensing procedures carrier. With regards to financial infrastructure,
investors noted that the arrival of more foreign
Investors cited the speed and simplicity with
banks had increased competition and driven
which they were able to register their businesses
down costs. However, while improving, access
(two to three days). They appreciated the
to liquidity remained a concern.
transparency of the system and that the rules
were closely followed. Furthermore, they
generally did not report encountering significant Dealing with Government
difficulties with obtaining the licences necessary Investors appreciated the pro-business stance
to establishing and maintaining their operations. of the Government and the speed with which
Investors noted that obtaining work permits did licences could be obtained. However, concerns
not present a challenge, nor purchasing land, were raised that once installed, there seemed
although given the country’s density, land itself less interest in taking on board the needs of
is not easy to come by and investors were investors. The Rwanda Revenue Authority
therefore not always able to obtain the amount was cited as being particularly rigorous in
of land expected or required. auditing companies and while this was done
transparently it was felt that the agency did
Human resource and labour issues need to show greater flexibility in interpreting
particular and unusual circumstances
Finding suitably qualified and able human re-
applicable to companies with international
sources locally was cited as a challenge, espe-
exposure.
cially for managerial positions. Companies had
to invest significantly in training and complement Investors were impressed with the speed at
with senior ranks with expatriate labour, often which some legislation was being renewed.
from Kenya (although obtaining work permits However, there were concerns that it could
was problem-free). However, local staff learnt sometimes be hard to keep up and that
AN INVESTMENT GUIDE TO RWANDA – INVESTOR PERCEPTIONS I 45

legislative requirements were sometimes be- Quality of life
yond the needs of a small developing country
Investors were keen to highlight the quality of
and the abilities of the kind of investors who
life in Rwanda. They pointed to its pleasant
would be attracted; although the Government’s
strategic ambitions were acknowledged. climate, landscapes, wildlife and virtually
crime-free environment. With a strong police
Some investors also raised concerns about the presence and well-maintained roads, driving
presence of Government-owned companies was safe. There was also a ready availability
and agencies competing – some felt with an of broadband internet and 3G phone access.
inbuilt advantage – with the private sector. This There are three international schools, of which
included in the sector of banking, pensions one, the Belgian school, provides instruction in
and insurance, although it was understood that French. Housing is easy to come by and rents
the creation of such institutions had been an are reasonable.
important stage in Rwanda’s early development
path. Investors felt the Government sometimes A good range of flights mean that expatriates
needed to better understand the economic role can easily reach other destinations in the region
that the private sector could play. for the weekend.

Appendices
APPENDIX I. PUBLIC HOLIDAYS AND BUSINESS HOURS
LIST OF PUBLIC HOLIDAYS IN 2012

The official Rwandan holidays for 2012 are:
1 January New Year Day
1 February Hero’s Day
6 April Good Friday (a)
7 April Genocide Memorial Day
1 May Labour Day
1 July Independence Day
4 July Liberation Day
15 August Assumption Day
19 August Eid-al-Fitr (a)
25 December Christmas Day
26 December Boxing Day
(a) The dates of these public holidays vary from year to year in accordance with the lunar calendar.
BUSINESS HOURS
Government working hours 7 a.m. to 4 p.m., Monday to Friday, with a one-hour lunch break.
Private-sector working hours 8 a.m. to 5 p.m., Monday to Friday, with a one-hour lunch break.
Most private-sector organizations also work half days on Saturday.
Banking hours 8 a.m. to 5 p.m., Monday to Saturday.
Most shops are open from 8 a.m. to 6 p.m. on weekdays.

Shopping hours
Some are also open during weekends from 8 a.m. to 5 p.m.
AN INVESTMENT GUIDE TO RWANDA – APPENDICES I 47

APPENDIX II. BIBILOGRAPHY
Boudreaux, Karol C. (2010). A better brew for success: Economic liberalization in Rwanda’s coffee sector.
East African Community (2009), EAC Common External Tariff.
Economist Intelligence Unit (2011). Country Profile 2011. Rwanda. London.
Friend, Andrew and Frohmader, Ricardo (2000). Cold chain for agricultural products in Rwanda, Chemonics
International, Inc.
Jaeger, Peter Dr. (2001). Study of the market for Rwandan passion fruit in Europe, Chemonics International, Inc.
Kayonga, Caroline (2007). Towards Universal Healthcare in Rwanda (summary note).
Ministry of Commerce, Industry, Investment Promotion, Tourism and Cooperatives (2002). Vision 2020.
–––– (2008). Economic development and poverty reduction strategy 2008-2012.
National Institute of Statistics of Rwanda (2011). Rwanda external trade statistics: 2009-2011.
OCIR-Thé (2005). A new tea sector strategy for Rwanda (2005-2010).
RDB (2010). Sustainable Tourism Development Master Plan.
UNCTAD (2006). Investment Policy Review: Rwanda. New York and Geneva.
–––– (2010). World Investment Report 2010
–––– (2011). World Investment Report 2011
UNDP (2011). Human Development Report, 2011.
World Bank (2008). Report on the observance of standards and codes.
–––– (2010). Doing Business in 2010. Washington, D.C.
–––– (2011). Rwanda economic update, Spring edition, April 2011.
–––– (2011b). The success of tourism in Rwanda – Gorillas and more.
–––– (2012). Doing Business in 2012. Washington, D.C.

APPENDIX III. LAWS RELEVANT TO FOREIGN INVESTORS
Privatization and Public Investment Law, 1996;
Protection and Conservation of the Environment Law, 2003;
Constitution of Rwanda, 2003;
Income Tax Act, 2005;
Value Added Tax Act, 2005;
Customs and Excise Act, 2005;
Investment Law 2006;
Land Law 2005;
Arbitration and Conciliation Law, 2009;
Companies Law, 2009;
Law on Secured Transactions in Movable Property 2009;
Law Relating To Commercial Recovery And Settling Of Issues Arising From Insolvency, 2009;
Labour Law, 2009;
Insurance Law, 2009;
Protection of Intellectual Property Law, 2009;
Credit Information Systems Law, 2010;
Competition and Consumer Protection Law, 2011.
AN INVESTMENT GUIDE TO RWANDA – APPENDICES I 49

An Investment Guide To Rwanda: Opportunities and Conditions

Uploaded by

Copyright:

Available Formats

An Investment Guide To Rwanda: Opportunities and Conditions

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

An Investment Guide To Rwanda: Opportunities and Conditions

Uploaded by

Copyright:

Available Formats

An investment

ii I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

tSafe, peaceful and attractive location for expatriates.

tAll sectors open to investors with no restrictions.

tNiche opportunities in high-end ecotourism and conference tourism, information and

tPossibility of acquiring government stakes in banks, insurance, telecommunications, hotels and

tStable location next to mineral-rich eastern Democratic Republic of the Congo.

tRapid reformer of investment-related laws.

tOnly 48 hours to register a new business.

tLow petty crime and corruption.

AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 I iii

The guide was funded by the One UN Fund for Rwanda.

NOTE TO THE READER

iv I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

Supachai Panitchpakdi Jean-Guy Carrier

AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 Iv

An Investment Guide to Ethiopia, 1999; new edition in new format, 2004

Guide de l’investissement au Mali, 2000; new edition in new format, 2004;

An Investment Guide to Bangladesh, 2000

An Investment Guide to Uganda, 2001; new edition, 2004

An Investment Guide to Mozambique, 2001

An Investment Guide to Nepal, 2003

An Investment Guide to Cambodia, 2003

Guide de l’investissement en Mauritanie, 2004

An Investment Guide to East Africa, 2005

An Investment Guide to Kenya, 2005; new edition, 2012

An Investment Guide to Tanzania, 2005

An Investment Guide to Rwanda, 2006; reprinted, 2008; new edition, 2012

An Investment Guide to Uzbekistan, 2007; revised edition, 2009

An Investment Guide to the Silk Road, 2009

Guide de l’investissement au Bénin, 2010

An Investment Guide to the Lao People’s Democratic Republic, 2010

Guide de l’investissement au Maroc, 2010

Guide de l’investissement aux Comores, 2011

An Investment Guide to Zambia, 2011

Guide de l’investissement dans la région de l’Oriental du Maroc, 2011

Guide de l’investissement au Burkina Faso, 2012

vi I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 I vii

viii I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

II. ASSESSMENT OF THE OPERATING ENVIRONMENT 11

III. REGULATIONS AND PROCEDURES FOR INVESTORS 21

IV. AREAS OF OPPORTUNITY 31

AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012 I ix

Rwanda remains relatively virgin territory

AN INVESTMENT GUIDE TO RWANDA – EXECUTIVE SUMMARY I1

2I AN INVESTMENT GUIDE TO RWANDA – OPPORTUNITIES AND CONDITIONS 2012

AN INVESTMENT GUIDE TO RWANDA – EXECUTIVE SUMMARY I3

Political system Multiparty system

Surface Area 26,338 km2

Population 10.9 million

Density 413 people per km2

Languages Kinyarwanda, French and English.

Time Zone GMT+2

Administration Five provinces

Currency US$ 1 = RWF 595 (January 2012)

GDP at current US$ US$ 5.65 billion (2010)

GDP per capita US$ US$ 531 (2010)

Human development rank 166 out of 187 (2011)