Home NewsNational Kagame Explains Rwanda’s Formula in Luring Investors

Kagame Explains Rwanda’s Formula in Luring Investors

by Jean de la Croix Tabaro
9:18 am

Prioritizing change of mindset of Rwandans is secret of the country’s economic revival

President Paul Kagame has shared tactics Rwanda applies to lure investors during the Corporate Council on Africa Presidential Dialogue on the Future of US-Africa Business.

The dialogue brought together CEOs, decision makers and heads of State who trade with United States of America.

Rwanda participated in the meeting because it is part of African Growth and Opportunity Act (AGOA), a United States Trade Act. Selected products from countries under AGOA receive duty-free treatment in US according to an Annual Product Review of June 2016.

At the summit, Kagame said the secret behind Rwanda’s revival of its economy was to first prioritize change of mindset of its people.

“There is one factor that is the most important in ensuring success: the people. We want the people to play their role,” Kagame said.

“We have made a conscience effort to invest in human capital. People with skills and the knowledge to do what is needed,” He added.

The President further noted that Rwanda has ensured that doing business is as comfortable. He said that comfort in doing business in Rwanda was enabled by several factors and the president mentioned some of them as being; improved regulatory framework, governance, fighting corruption and others.

To that, the country added a mechanism of “bringing in the private sector and ensuring that they can do business at a lesser cost,” said Kagame.

Rwanda reduces the cost of doing business in several forms including tax holidays.

In a new investment code that was published in May 2015 replacing a code of 2005, Rwanda reduced its corporate income taxes from 30% to 15%, for priority sectors, including energy, financial services, transport, affordable housing and logistics.

The country is giving up to 7 years of tax holidays to projects investing $ 50 million in energy, manufacturing, health and ICT, key sectors in country’s economy.

In these priority sectors Rwanda does its best to make sure that no investor returns home with his money without investing in Rwanda.

For example, in affordable housing, Rwanda pays 30% of the project by providing key infrastructure to the site including water, electricity and roads.

In terms of enabling doing business, Rwanda eliminated bureaucracy from getting information about desired investment to registration of a business and from launching the business onward.

Kigali has a very strong construction one stop centre where all applications and queries regarding construction project are obtained. The One stop centre has now put in place an online portal where an investor can obtain every document, service or information without necessarily going to the office.

President Kagame (l foreground) at the Corporate Council on Africa Presidential Dialogue on the Future of US-Africa Business this afternoon in New York

Rwanda Development Board (RDB), an institution which is in charge of attracting investors among others has recently dedicated Friday of every week to an Open Day.

The RDB’s CEO sits with investors and each of them raises their concern with her and the answer is obtained right from there or just a breakthrough is obtained.

“Rwanda over the years continues to rank highly in ease of doing business, globally,” Kagame said at the meeting.

President Kagame also shared Rwanda’s drive to participate in value chain. He said; “Mindset is important. We had to develop a different way of thinking.”

“We had to start thinking and having a conversation around what we have for ourselves, what we can do for ourselves.”

Kagame said, Rwanda graduated from being spoon fed, and is currently trying to find solutions to its problems independently.

“We had to move away from a thinking of people who sat back and expected to be fed, provided with medicine, handouts.”

The current concern now for the country, is to convince every citizen that it is high time to find solution to country problems at home, not from abroad.

“We are aware that we can’t do everything, so where we are unable to succeed alone, we seek partnerships elsewhere,” Kagame said.

“We have to build on the fact that many things can be done at home. We have to industrialize. This should be the mindset.”

Whatever the country is to produce however, there should be eagerness to be competitive to the international market. With this, quality and quantity are at play.

“We have what it takes to compete globally, but we need to start at home. Home being Rwanda, Nigeria and Africa,” Kagame said adding that bringing everyone on board-private sector, the citizen is always paramount when you want to grow and this is the formula Rwanda used.

Kagame told the rest of the world to stop seeing Africa as home to the evil.

“A lot of what happens in Africa, happens around the world. Africa is just presented more raw,” Kagame said.

“The rest of the world should see Africa as a partner. A place to do business with.”