How Rwanda grew foreign investment by more than 1300% in a decade

Kigali Rwanda

The Sub-Saharan country, Rwanda has been amazingly progressive. Photo by oledoe, available under a Creative Commons Attribution 2.0 Generic (CC BY 2.0) license.

Rarely does a nation’s economy attract so much investment and positive attention when its “brand” is primarily associated with genocide. However, under the leadership of President Paul Kagame the sub-Saharan country has enjoyed surprising progress in recent years.

Kagame came to power in 2000, when World Bank figures listed foreign direct investment in Rwanda as having been the inflation-adjusted equivalent just US$8.3m. By the end of the decade in 2009, that figure had risen to US$118.7m, a growth multiple of more than 13 times. This jump is especially impressive given that foreign direct investment amounted to a combined US$28m in the first five years of that period.

Rwandan exported US$755m worth of goods and materials in 2012, its biggest year for attracting investment.

Investment peaked at US$159.8m in 2012, and was US$110.8m in 2013 (the most recent year for which figures are available). So what drove this immense improvement in fortunes for the country?

  1. Rwanda liberalized the rules around foreign investment at the end of 2005. Removing restrictions on FDI entry, allowing 100% foreign ownership and giving foreign businesses national treatment was an instant success, driving investment from US$8m to above US$30m within a year of its introduction. Read the copy of the investment law;
  2. President Kagame treats the country’s governance like a business, preferring to remove barriers to prosperity before non-economic concerns from outside observers (including human rights groups);
  3. Diversifying the economy into new areas such as coffee washing allowed it to build a competitive advantage in the region, which primarily focuses on growing coffee;
  4. There are large English- and French-speaking populations in the country, giving Rwandans access to two of the largest global business languages. These languages are particularly strongly represented in Africa, and Rwanda’s move to all-English education will drive further international success;
  5. Rwanda leveraged foreign investment to boost mineral exploitation, exporting US$340m of mineral products in 2012. This compares to only US$200m of overall exports in 2005, prior to the implementation of the new investment law;
  6. Balance has been retained in the economy – although exports of mineral products grew in absolute terms, their share of Rwandan exports has grown only from 43% to 45%. A diverse economic base has been key to Rwanda’s success.

Investing in Rwanda

Now to Healy Consultants Group’ specialty: the practicalities of foreign investment in Rwanda. Repeated improvements in law and process have significantly simplified registering a foreign business in Rwanda. Local company law allows for wholly-owned subsidiaries with a single director and no minimum capital, although at least one of the company’s directors must be resident in Rwanda. Thanks to the efficiency of Rwanda’s investment procedures, a new company can be started within a week.

Contact us

To learn more about incorporating a company in Rwanda, visit our website. When you are ready to move forward with your corporate expansion, contact our experts:

Healy Consultants Group provides a wide range of corporate services across the world. Email or WhatsApp us now to find out more about our services.

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