Investment Climate
The best definition of Rwanda's investment climate is its peace and stability, as well as its commitment to democracy and good governance. The December 2002 World Bank report ranked Rwanda as Africa's leading light in terms of good governance.
International observers also hail the country for its low levels of corruption, and minimal crime rate compared to others parts of the continent. Many point at the safety and predictability of the Rwandese environment as a significant achievement.
Besides its commitment to good governance, Rwanda has fully embraced the principles of free market economy. Since 1994 the government embarked on a comprehensive liberalization of its economy, initiated appropriate legislative reforms, promoted free trade and pursued regional integration targets as set out under the Cross-Border Initiative (CBI) and the Common Market for Eastern and Southern Africa (COMESA).
Apart from its COMESA membership, Rwanda has also been invited to join the Commission for East African Cooperation (EAC). Membership should happen during this year.
In keeping with its regional integration commitments, Rwanda has reduced its tariffs rates and eliminated all export taxes and other non-tariff barriers. Presently, Rwanda's trade regime is one of the most open in sub-Saharan Africa. Under the existing tax regime, COMESA originating goods taxes were slashed by 80% in 2002, 90% in 2003, 100% in 2004 and the country is getting ready for implementation of the COMESA free trade area in the current year.
COMESA membership will provide Rwanda-based enterprises, a duty free and quota free access, to a huge market of nearly 380 million consumers and a combined GDP of nearly US$170 billion.
As part of the AGOA program, Rwanda also has a duty and quota free access into the
USA and EU markets, in line with the provisions of the African Growth Opportunity Act (AGOA) for the US and the Cotonou arrangements for the EU respectively. AGOA opens the lucrative USA market to over 6400 products from deserving African countries, Rwanda among them.
To promote better economic performance, Rwanda has also pursued an economic reform agenda centred on privatisation. Privatisation of public enterprises took off in 1998 with 90 entities earmarked for privatisation. Already 48 enterprises have been privatised, eight are at the final stage privatisation and seven have been liquidated while 27 remain ˇ°unspokenˇ± for. Last year two tea factories at Mulindi and Pfunda were put on the auction block. This comprehensive privatisation programme provides enormous opportunities for investment. Already, there has been significant International Investors interest in all the states assets set for the auction block.
The combination of political commitment to free market economy, the privatisation programme, good governance, an attractive investment code and appropriate institutional reforms to support private sector development make Rwanda's investment environment the equal of any in the region and continent.
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