Rwanda’s foreign direct investment portfolio hit the one billion dollar mark for the first time last year, beating its East African Community peers Kenya and Uganda for the first time.
Rwanda’s impressive performance is largely linked to its aggressive investment promotion strategy that has seen it focus on reducing the cost of doing business and tax incentives to large investors.
Data from the Rwanda Development Board (RDB) shows that the country registered foreign investments worth $1.04 billion in 2017 — representing about 62 per cent of a total of $1.67 billion, inclusive of domestic investments.
This is a significant jump from the$650 millions worth of foreign investments registered in 2016.
In contrast, Kenya recorded $672 million worth of FDI, while Uganda registered $700 million, according to the World Investment 2018 report by the United Nations Conference on Trade and Development.
Major investments Rwanda targeted for FDI include the new Bugesera International Airport, real estate projects, thermal and hydropower plants, textiles, oil reserve and horticulture.
“To deliver prosperity for all Rwandans and become an upper middle-income country by 2035, the private sector will be of paramount importance.
Only a vibrant private sector will sustainably create jobs and exports leading Rwanda’s transformation into a knowledge-based economy,” said RDB chief executive , Clare Akamanzi.
The country has over the years invested heavily in promoting its investment climate, and attended international missions mainly in Europe and Asia to showcase its incentives to foreign investors.
The incentives include a seven-year tax holiday for investments reaching at least $50 million, a preferential corporate income tax rate of 15 per cent if 50 per cent of a company’s locally made products are exported, and a zero tax rate if the company exports 80 per cent of its products outside the EAC.
Tanzania continues to top the EAC in attracting foreign direct investment.
The country absorbed $1.2 billion in foreign investments last year, buoyed by strong prices for gold and a steady increase in local production for exports, according to Unctad.