According to the World Bank’s Doing Business Survey, Rwanda is the 45th (out of 183) easiest country in the world to do business in. It takes only two procedures and three days to open a business in Rwanda, compared to an average of eight procedures and 37 days on the rest of the continent.
<div id="attachment_329" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-329" class="size-large wp-image-329" src="/wp-content/uploads/2017/04/iStock_000016937094Medium-1024x685.jpg" alt="" width="474" height="317" />Early morning view from a hill into the tropical cloud forest in Nyungwe</div>
Rwanda by far offers the most business friendly environment in the East African Community (EAC). Truly remarkable for a country scarred by a genocide, less than two decades ago, that saw 800,000 people die in 100 days.
Rwanda’s strong performance is thanks to the government’s drive for regulatory reforms. In 2011 alone, the government has: lowered registration fees for businesses; introduced a credit bureau to provide credit rating data and reduced the frequency of value-added tax filings, from monthly, to quarterly. Reforms have also been underway in the banking sector. The International Monetary Fund (IMF) noted government’s restructuring and modernizing in oiling the wheels of the financial sector and concluded that although the financial sector has a few vulnerable banks, overall the sector can withstand a major shock.
Reforms are likely to continue in years to come given the ruling, Rwanda Patriotic Front’s political dominance. President Paul Kagame secured a landslide victory in 2010, which not only ensured his presidency until 2017, but also ensures policy continuity. Political stability, coupled with policy certainty, will go a long way to attract investors.
A central policy focus for the government will be an East African Community initiative in pursuit of a powerful and sustainable economic and political bloc. The European debt crisis could slow the EAC’s pace of establishing monetary and fiscal union. Member states will avoid rushing matters to ensure that they do not wind up in the same mess as the Europeans.
The economy grew 7.5% in 2010. The government expected growth to decline to 7.0% in 2011, but given the performance of the economy as of the second quarter of this year the government revised its forecasts. Government expects growth to average 7.2% per annum between 2011 and 2015. Growth will be supported by investment expenditure to improve the infrastructural base.
The recently signed Bilateral Investment Treaty (BIT) with the United States is likely to boost trade and investment between the two countries. This was the first new BIT with an African country and signals Washington’s seal of approval on Rwanda’s macroeconomic outlook and reform agenda.
Inflation in Rwanda remains benign in comparison to its neighboring countries. Inflation increased to 7.8% year-on-year in October, from 6.6% in September. Rising inflation pressures prompted the central bank into action in October. The National Bank of Rwanda increased benchmark interest rates to 6.5% from 6.0% in a bid to stem these rising inflation pressures. Rising inflation poses a risk to growth and the central bank has to strike a delicate balance. With inflationary pressures being external—food and oil—the impact of monetary tightening is likely to be limited.

Steady As She Rises

Rwanda’s post-genocide recovery has gone through many hands, but there is one big hand to reckon with—that of entrepreneur Said Sekoko Hatari.
Hatari may not be the richest man in Rwanda, but he is among Kigali’s cash kings. Born to a poor family, he grew up in Uganda as a refugee. One of the bitter legacies of Rwanda’s troubled past is that many of its people grew up sheltering outside the country.
Exile was where Hatari started in business, at the tender age of 20, as a truck driver working for Somalis. He was transporting construction materials from Kisumu in Kenya to missionaries living nearby. He quit the job to trade spare parts and coffee. He made mistakes along the way, including losing $1 million in the coffee business.
More than 30 years on, Hatari, who also served in the Rwandan army, is the king of hospitality and construction in Kigali with a number of business partnerships at his elbow.
“In partnerships, people come with their own money and borrowing connections. When you are alone, you get exhausted,” he says.
Hatari is the executive director of Doyelcy Ltd, founded in 2006, one of the largest firms in Rwanda and under valuation by Ernst &amp; Young. The company may list on the Rwanda Stock Exchange or issue a corporate bond to raise capital for investment in its core businesses of hospitality, property, insurance, renewable energy and agriculture.
Doyelcy is co-investing in hospitality and construction projects in Rwanda along with Dubai World, Chinese investors and Sudhir Ruparelia, one of the richest men in Uganda.
The prime project is the Kigali City Tower, which will be the tallest building in Rwanda and a potent symbol of reconstruction less than two decades after dead bodies littered the streets.
The 1994 genocide took more than 800,000 lives in 100 days. It shattered the country’s infrastructure, as well as its soul. From roads to government offices, private businesses and homes, to water pipes and electric poles—the country needed huge investment to build afresh; money that the government did not have.
Seventeen years later, Rwanda is one of the world’s success stories, with an annual average growth rate of about 8%. It was ranked the top global business reformer in the World Bank’s Doing Business Report in 2010. This was the first time a country from sub-Saharan Africa—the region with the highest poverty levels in the world—won such an accolade.
The tower of Kigali is a bold manifestation of this surge of confidence. It will bring scarce high-end office and retail space to Rwanda as the country plans to position itself as the business-friendly Switzerland of East Africa. Tenants are signing up for 20 floors; they include Rwanda’s plush coffee shop, Bourbon Street; Apple; Kenya’s Nakumatt; and South Africa’s Mr Price.
Ernst &amp; Young valued the tower at $33 million, which also makes it the most expensive landmark in Rwanda.
In another project, costing at least $200 million, Doyelcy is also co-investing with Ruparelia in a modern tax park and commercial buildings in Kigali. Then there is a $60 million five-star hotel with Chinese investors. The 254-room Kigali Marriot will be the largest hotel in Rwanda.
This year, the Central Bank says the economy may grow by more than 7.5%,  with strong recovery in the agriculture and service sectors, in a land where it takes one day to register a business. Inflation is easing and the financial sector grows stronger as more regional banks set up shop in Kigali.
This year, Rwanda expects investments to grow to $550 million, from more than $300 million last year.
Construction and hospitality are the fastest growing sectors in the country. In the first six months of 2011, construction rose by 54.6% compared to 28.7% for the same period last year.
“I believe that the future of this economy is mainly its expansion, going beyond borders as it reduces trade obstacles and introduces new markets,” says Hatari.
Although the construction sector is growing, Hatari says it faces setbacks from a lack of skilled labour and construction materials like cement. There is also a question over long-term finance from the banks.
“Finance is still a challenge and I think it will remain a challenge,” he says.
The good news is that Rwanda relishes a challenge.

Tag: Rwanda

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Steady As She Rises

From A Truck Driver To A King Of Kigali