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Rwanda foreign direct investments rise sharply: report

by June 23, 2016 General

KIGALI, June 23 (Xinhua) — Foreign Direct Investments (FDIs) to Rwanda have increased by 78.1 percent, according to the latest Foreign Private Capital Census (FPC) 2015 report released by the National Bank of Rwanda.

The findings released on Thursday indicate that investments in the small central African country by foreign investors increased to 458.7 million U.S. dollars in 2014 from 257.6 million U.S. dollars recorded in 2013.

“An increase in FDIs is attributed to favourable investment conditions in Rwanda and the country’s attractiveness to foreign investment,” reads part of the report.

Speaking to reporters, Francis Gatare, chief executive Rwanda Development Board said that Rwanda has streamlined investment procedures to allow investors fully explore untapped business opportunities.

“The foreign direct investment is growing very strongly. We expect FDI inflows to increase tremendously because of an improved business environment. Rwanda is still virgin for private investments, a wide range of sectors of the economy are largely untapped,” he added.

According to the 2016 Ernst & Young (EY) Africa Attractiveness Index, Rwanda is one of the 10 most attractive nations in Africa for investors.

The country was ranked ninth and the second most preferred investment destination in East Africa after Kenya, which came fourth on the continental ranking and first in the region. Tanzania and Uganda were ranked 12th and 13th, respectively, on the continent.

The FPC report shows that Mauritius investments in Rwanda are leading with 113.5 million U.S. dollars followed by Switzerland (106.2 million U.S. dollars).

Top ten sectors of the economy accounted for 96 percent of all FDI inflows in 2014. 136.2 million U.S. dollars came from mining while ICT sector investment amounted to 116.1 million U.S. dollars.

Tourism sector investment was at 71.8 million U.S. dollars while finance and insurance sector registered 68.8 million U.S. dollars.

Finance and insurance sector amounted 229.6 million U.S. dollars worth of investments while manufacturing accounted for 172 million U.S. dollars.

Rwanda’s increased FDIs performance is attributed to several reforms in doing business including; a tax holiday of up to seven years, government’s protection of investments, settlement of disputes, transfer of funds and special economic zone facilitations, according to Rwanda Development Board.

Rwanda has put in place a good business environment that is corruption free and reducing the hours of registering a business from 24 hours to 6 hours hence attracting both local and foreign investors.

The country has opened strategic business offices in different countries like Turkey, Canada, UK, US, South Africa, Singapore and China, with the aim of promoting investments in those countries.

In 2014, the overall net profit of foreign companies that registered in Rwanda amounted to 46.5 million U.S. dollars dropping from 73.6 million U.S. dollars this year, according to the report.

The Foreign Private Capital Census (FPC) 2015 is the sixth in a series of annual censuses conducted by the National Bank of Rwanda in collaboration with National Institute of Statistics of Rwanda, Rwanda Development Board and Private Sector Federation.

The report collect information required for the compilation of Rwanda balance of payments, international investment position statements and determines the magnitude and trends of FPC in Rwanda. Enditem