Economic outlook of Rwanda today – and what are the prospects for the country?

Rwanda is now in its third decade of uninterrupted economic growth and social progress, a remarkable turnaround since the devastating 1994 Genocide against the Tutsi. Economic growth averaged 7.5% over the decade leading up to 2018, national poverty declined from 59% to 39% between 2001 and 2014, and inequality declined from 0.52 in 2006 to 0.43 in 2017 (Gini index). This is thanks to a highly strategic approach to development; the implementation of economic and structural reforms; and the efficient use of domestic and external resources towards nationally defined goals. Promotion of gender equality has also been key to the country’s recovery and development.

Rwanda’s Vision 2050 outlines the country’s aim to attain Middle Income Country (MIC) and High-Income Country (HIC) status by 2035 and 2050, respectively. The Vision will be reached through a series of seven-year National Strategies for Transformation (currently NST1, 2017-2024), which outline the priority strategies for economic, social and governance transformation. With regards to transformation of the Rwandan economy, this will seek to accelerate inclusive economic growth and development that is driven by the private sector, knowledge and the country’s natural resources.

Looking ahead, Rwanda aims to become a regional trade, logistics, and conference hub, and has undertaken key interventions and significant investments in order to achieve this, including establishing a country wide high speed internet network, the construction of several new international business class hotels, a state of the art convention center in Kigali, expanding the fleet for the national airline carrier RwandAir as well as construction of the new Bugesera International Airport that is expected to be complete by the end of 2020.

Kigali Convention Center (©) Government of Rwanda

Which kinds of business opportunities are there for Finnish companies in Rwanda?

Rwanda is currently ranked by the World Bank as the second easiest country in Africa to do business, and 29th easiest globally (among 190 economies). For comparison, Finland is ranked 17th globally. This means that Finnish companies looking to do business in Rwanda should expect to find a conducive regulatory environment like they may find at home. According to Team Finland, the industry sectors with the greatest potential for Finnish companies are Mining, Energy, ICT, Agriculture and Forestry. This matches with our identified priority sectors.

Rwanda’s economic growth in recent years has been driven by strong growth in the services sector, which has overtaken agriculture as the leading driver of growth. Many companies in the services industry could benefit from professional training from Finnish companies, for example in customer services training and ICT. Kigali’s rise as a top conference and event destination on the African continent means there are plenty of new opportunities in the hospitality sector. Looking at ICT, the Rwandan government is looking to capitalize on previous investments in country-wide fiber optic roll-out by developing high-tech services, including for export. Recently, Mara Phones launched its manufacturing plant in the Special Economic Zone in Kigali, becoming the continent’s first manufacturer of Smartphones. Investments are expected in ICT-enabled financial services, security services and so on.

Value-addition and export of agri-products is a key priority for transformation of the Rwandan agriculture sector and offers business opportunities for Finnish companies. For example, Rwanda is a major coffee exporter, while Finland is recognized as the world’s highest coffee consuming nation per capita. As the country seeks to increase coffee production, while improving local value addition (roasting, packaging, and branding) there are extensive opportunities for companies interested in linking Rwandan coffee to the Finnish market. Other agri-products like nuts, vegetables, flowers etc also offer attractive business opportunities.

Kigali residents enjoy a jog on the bi-monthly car free day (©) Government of Rwanda

Please, also explain us which kinds of investment opportunities there are for Finnish companies in Rwanda?

Rwanda’s sustained high economic growth, stable political environment, ease of doing business, good governance and zero tolerance for corruption make it a lucrative investment destination for Finnish companies. Investors would have access not only to Rwanda’s market of 12.3 million people, but also to an additional market potential of over 125 million people in the East African Community common market and customs union. There has been increased investment interest on Rwanda in recent years from Finnish companies, such as Taaleri Plc that invested in the modern commercial and office complex Kigali Heights.

Finnish companies can have a lot to offer in fostering the management of natural resources and the sustainable use of forests, which is of relevance to Rwanda given the importance of extractives to the Rwandan economy and targets to ensure sustainable exploitation of the country’s forests. The agriculture sector in Rwanda is currently labour-intensive and has yet to reach its full potential, and investments in value addition as well in climate resilience techniques for farming will be necessary for continued economic growth and poverty reduction.

There are other sectors of relevance to Finnish investors such as the manufacturing sector, which remains small but is expected to grow as Rwanda’s economy diversifies. For example, the country imports most of the packaging materials it needs for domestic and regional markets. Specific products in high demand include construction materials (e.g. electric cables, steel materials, wood products), textiles and garments – the country has only one major textile manufacturing company and has banned imports of second-hand clothes, as well as paper and paperboard products.

Additionally, there are considerable investment opportunities in the transport and infrastructure sector (railway, road, air and ferry) in Rwanda, which is key for reducing the cost of travel and trade in the country and region.

Kigali Logistics Platform (©) Government of Rwanda

If a Finnish company decides to invest in Rwanda, what are the most important issues this enterprise must take into its consideration to succeed in the market?

Given the plethora of business opportunities for Finnish investors in Rwanda, the first issue they may face is choosing one business opportunity and focusing on growing this before taking on the next. Therefore, we encourage anyone to first visit the country and do their research on what opportunities would be most suitable for them to pursue.

As Finnish enterprises get started with their business and start engaging with Rwandan teams and clients, it is important be cognizant of differences between Rwandan and Finnish culture – like it is anywhere in the world.

With regards to language, Rwanda is a multi-lingual society and English and French are the official working languages in business, government and international offices. All Rwandans speak our mother language Kinyarwanda, and some speak Kiswahili to some degree. On some more minor points, Rwandans respect hierarchy, they value physical appearance and follow a casual-smart dress code during the workday. Sandals and shorts are f. ex. not considered appropriate in a working environment.

Which kind of assistance and which kinds of benefits there are in Rwanda for Finnish companies which would like to invest in Rwanda?

Rwanda is an open and easy country to do business, where services are efficient and corruption-free. Finnish companies and investors will appreciate this. It is quick and easy to get an entry-visa upon arrival at the airport in Kigali or through our Embassy in Stockholm. Investors can register a business online in less than 8 working hours. Any citizen of the world can lease or purchase land and property in Rwanda and foreigners who own companies in Rwanda are not required to share their shares or profits with local partners, as some other countries.

For investors, the Rwanda Development Board (RDB) is truly a ’one stop shop’ for Finnish companies looking to invest in Rwanda. RDB hosts the online investment registration system, and facilitates investors during this process, including the attainment of non-fiscal and fiscal incentives as provided by the Rwandan investment law. Once approved, investors are automatically assigned key account managers to support their projects and facilitate with obtaining visas and work permits, land acquisition, construction permits and so on. RDB can also inform on the fulfilment requirements for various tax incentives available for investors. The RDB Aftercare team also host an Investor Open Day every Friday from 9am-12pm, where investors can go to seek advice with any issues they may be facing.

Mara phones factory, Kigali (©) Government of Rwanda

Please, explain us how Rwanda has benefited from the free trade agreements?

Rwanda is an open economy committed to the strengthening of regional and global economic integration. We are member of three key regional integration blocs: the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Economic Community of Central African States (ECCAS) that promote trade and free movement of people. Rwanda also ratified the 2015 Tripartite Free Trade Area (TFTA) agreement between the regional blocs EAC-COMESA-SADC, which incorporates 26 African nations with a population of 632 million people. Rwanda also has international trade agreements such as the Economic Partnerships Agreements (EPA) with the EU.

During his tenure as African Union (AU) Chairperson (Jan 2018 to Feb 2019), our President H.E. Paul Kagame, championed the AU intra-regional free trade agreement, and hosted over 50 African heads of state and government in Kigali in March 2018 for the signing of the African Continental Free Trade Area (AfCFTA). The AfCFTA is expected to be the largest trade bloc of its kind, with a potential continental market of 1.2 billion people, and a combined gross domestic product of more than $3.4 trillion. Once the AfCFTA comes into effect on July 1, 2020, the signatories will need to drop 90% of their tariffs for imports from other African states, thus greatly boosting intra-African trade. This bears immeasurable opportunities for Finnish companies. The smartest move would be to get established in Rwanda and, given our geographical central position, get access to the rest of the continent.

Beyond the regional and continental integration, Rwanda is member of the Commonwealth and the Francophonie, providing even more opportunities globally.

Singita Kwitonda Lodge (©) Government of Rwanda

We know Rwanda as a great holiday destination for Finns. Please, tell us more about the tourist attractions and holiday resorts in your country.

Rwanda is one of the most gorgeous countries in the world, offering winding roads, peaceful lakes, volcanic landscapes, picturesque sceneries and endless green hills, thereof its nickname “Land of a thousand hills”. In fact Forbes magazine just listed Kigali among the top 20 best places to visit in 2020, citing the capitals cleanliness, safety and enlightening cultural experiences that include world-class modern art galleries, local crafts, fashion and even a coffee co-op run by women making the world’s best coffee. Rwanda is positioning itself as a high-end tourism market, offering plenty of luxury, adventure and eco-tourism options. World-class hotels such as the Marriott or Radisson have recently opened their doors in Kigali.

Rwanda’s countryside also attracts with amazing lakes, villages, landscapes and ecological parks, all from two to five hours driving distance from the capital. You can see the “Big Five” (lion, leopard, rhino, elephant and African buffalo) and many more species in the low-lying plains of Akagera National Park or see the mountain gorillas in the Volcanoes National Park. The award-winning eco-tourism brand Singita just opened their exclusive Kwitonda Lodge on the edge of the Volcanoes National Park. An hour’s drive from Volcanoes National Park is the beautiful waterfront town Rubavu, which is lined with charming old mansions, hotels and trendy bars on the lake Kivu shore. Nyungwe National Park, one of the oldest rainforests in Africa and rich in biodiversity, has countless butterflies, orchids, colourful and indigenous birds, thirteen species of primates as well as the famous canopy walk.

Akagera National Park – lions (©) Government of Rwanda

Volcanoes National Park – Silverback gorilla (©) Government of Rwanda

The entire country is safe and can also suit the solo traveler. Gallup ranked Rwanda as the safest country in Africa, and for example the possibility to walk alone at night to or from a restaurant is much appreciated by many visitors. For the lovers of active holidays, there are many possibilities such as hiking, cycling, swimming, water sports, etc.

One excellent tourism option that should not be overlooked is the premium infrastructure, connectivity and services that Rwanda offers as a top conference and convention destination in Africa. Business travelers may come to Rwanda for its premier event space and go on to enjoy the other natural and cultural attractions the country has to offer. And did I forget to mention the tropical climate that is not too hot or too cold? This I’m sure most Finns will find agreeable! I welcome you all to visit Rwanda!

H.E. Ms Christine Nkulikiyinka, Ambassador of the Republic of Rwanda to the Nordic Countries (©) Government of Rwanda

Contact person for questions:
Anne Hatanpää,
Liaison Manager, International Affairs
Finland Chamber of Commerce
anne.hatanpaa ( a ) chamber.fi

Interview with H.E. Ms Christine Nkulikiyinka, Ambassador of the Republic of Rwanda to the Nordic Countries