Ease of doing Business; Key lessons from Rwanda Featured

12 Feb 2018
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Key lessons on the Ease of doing business can be drawn from Rwanda, a country ranked number two, after Mauritius, in the Ease of doing business rankings in Africa. This follows the business mission to Rwanda trip in which the Zimbabwe National Chamber of Commerce (ZNCC) partnered Investment Access Group (IAG), and led a business delegation to Rwanda from 23 to26 January 2018.

The trip which was meant to scout for business opportunities for Zimbabwe in Rwanda and also market Zimbabwe as an investment destination saw the Zimbabwe delegation having an opportunity to engage with the Rwanda business community and Zimbabwean business community in Rwanda.

The government of Rwanda came up with a position under the Vision 2020 to bring to the fore the economy of the country. With over 72% of Rwanda’s population in Agriculture, the strategy included opening Rwanda to business and linking it to the rest of the world. The country is also a member of the Commonwealth.

Among other reforms, the Rwanda Development Board (RDB) was formed in 2008 after merging 8 different institutions. The vision of the RDB was to move GDP per capita from $720 to $1,200, to increase exports (currently they are experiencing a trade deficit), to advocate for policy change, assess the needs and develop the labour market. The merging of 8 institutions was to bring all services together to reduce bottlenecks, time and bureaucracy for investors. Opening up a business in Rwanda takes less than 6 hours at zero cost and this can happen online. An after-care division was also set up to oversee the registered projects. An Investor Open Day was established every Friday to interface with investors.

Manufacturing is one key area RDB is promoting as they are on the move to narrow down the trade deficit; overall imports are at $450 million with construction materials mainly forming the components of the imports ($202 million). Focus is also on labour intensive jobs, textiles and garments, Agro-processing (fertilizers, cooking oil, wheat flour) and has the desire to be the regional destination for conferencing having raised $46 million last year from conferences alone. The country has also introduced an open visa regime and now even non-Africans can get visas on arrival. Rwanda is targeting 1.5 million jobs by 2022 and 22% growth in exports annually.

Meanwhile, the Zimbabwe Business delegation had an opportunity to visit and tour the Kigali Special Economic Zone (KSEZ) which is located about 10km east of Kigali, a few kilometers from the Kigali International Airport occupying 276 ha of land. The land was donated by the Government as a subsidy, after compensating the sitting tenants.  The development of the KSEZ started in 2013 by merging the former Kigali Free Trade Zone and the Kigali Industrial Park projects. KSEZ was developed in two phases with phase 1 built on 98 hectares completed in 2013 and occupied by 61 investors. Phase 2 (178 ha) is still under construction and 7 companies are already operational.

The Special Economic Zones are structured in such a way that plots are sold to investors at a subsidized rate with incentives, including installments with a down payment of 30%, and a grace period of two years given after which they either fully pay the balance of 70% or pay in installments for five years with an interest rate of 10- 15%. At the regulatory level, the Special Economic Zones Authority of Rwanda (SEZAR) has been established to regulate, administer, and provide strategic planning and monitoring for Special Economic Zones in Rwanda.

Lessons from Rwanda call for the need to implement reforms so that the Special Economic Zones (SEZ) can be implemented for they will attract investment needed to resuscitate the economy.

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Zimbabwe National Chamber of Commerce is a non-profit making membership-based organisation that provides services designed to support its members in business development.  

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