Rwanda Reaps Fruits of Reform: Rwanda Today Is Barely Recognisable from the Country Left in Ruins after the Genocide 16 Years Ago. It Heads the World Bank's List of Reforming Nations and Investments Are Flooding in. Much More Still Needs to Be Done, but This East African Country Is Well on Its Way to a Bright Future
Rundell, Sarah, African Business
Rwanda's accession to the Commonwealth last November marked another step in the landlocked African nation engaging with the outside world. The group of mostly former British colonies brings together industrialised and developing nations, espouses democracy and good governance, and is a consensus-seeking forum on issues like economic policy, trade and climate change.
Rwanda's accession is a recognition of its rehabilitation since the genocide in 1994, said Rwanda's Foreign Minister Louise Mushiki-wabo at an audience with journalists in London. "The genocide and discrimination was, in some ways, due to a paranoia and fear of opening up, Our government now has a deliberate policy to open up. The more Rwandans come and go, the more they will benefit, and Rwanda joining the Commonwealth is part of this policy to open doors."
Rwanda's joining the Commonwealth is just the latest in a stream of initiatives to engage with the outside world that is starting to entice investment into the country. Despite the chill of last year's global economic downturn, foreign investment jumped 40% to $1.1bn in 2009 and is expected to rise 20% this year.
Rwanda recently became the World Bank's biggest business reformer according to its Ease of Doing Business Index, rising to 67th position overall, with starting up a business, registering property, paying taxes and enforcing contracts all getting easier.
The Rwanda Development Board says it will simplify the issuance of land and building permits and promises to work with the East African Community trade bloc to address red tape and non-tariff barriers. "It now takes a Rwandan entrepreneur just two procedures and three days to start a business," said the World Bank.
Rwanda's drive for private sector investment to transform its smallholder agricultural economy into a regional hub for financial services, ICT and tourism is finally starting to bear fruit. Investment is moving into the banking sector as groups seek to tap Rwanda's unbanked population.
Kenya Commercial Bank set up in Rwanda in 2008 and has expanded its branch network to nine; it is the only company that is quoted on the Rwanda bourse following its cross listing in 2009.
Nigeria's Access Bank has a 75% stake in Rwanda's fourth-largest bank, Bancor SA, and is anchoring its East Africa push out of Kigali. "Access Bank's presence in Rwanda is vital for our reaching the vast East African market," said Access Bank's Deputy Managing Director Herbert Wigwe.
Dutch group Rabobank has a stake in Banque Populaire du Rwanda; and Shore-Cap International and Germany's African Development Corporation--which also has a controlling stake in Simtel, the national electronic payment transactions provider--are also on the ground.
Tourism, the country's biggest foreign exchange earner, is growing. In 2007, tourists spent $209m and in 2008, visitor numbers to resorts like Virunga National Park and Lake Kivu jumped 50%.
Commentators highlight investor opportunities in high-end resorts. "There are 187 hotels in Rwanda and only seven are upper range," says the Rwanda Development Board (RDB). Rwanda was among the countries hit by the fallout from the collapse of the Dubai sovereign wealth fund in 2009. A $230m venture with Dubai World to build six tourism projects collapsed, leaving just two--the Nyungwe Forest Lodge and Gorilla's Nest Hotel--worth around $25m.
Plethora of investments
In Rwanda's biggest foreign investment to date, New York-based ContoursGlobal, a privately owned renewable power developer, is ploughing $325m to harness methane gas to boost electricity generation compressed under the waters of Lake Kivu, one of Africa's great lakes, which lies on the border of Rwanda and the DR Congo.
The company plans the first 25MW of the project to connect to the grid by October this year and says it will total 100MW on completion in 2012. …