Kigali — By all measures, 2012 will pass as a very successful year for Rwanda, at least on a business front.
In the year, there were more than a billion dollar investment projects registered, over 9000 new businesses and a possible 20,000 jobs.
According to the Rwanda Development Board (RDB) the agency charged among others, with implementing positive business reforms to bolster investment, the country's economy in 2012 managed to attract investment proposals worth at least $1.15 billion by close of December.
Tony Nsanganira, RDB's acting Chief Operations Officer says the 2012 performance results surpassed those of the previous year by $524m a factor he attributes to the stable economic growth and attractive investment environment that has been created under an ambitious doing business reform campaign.
With Rwanda's economy that has been growing steadily at impressive figures against odds of a global slowdown expected to do better than 7.7% it averaged in 2012 (Rwanda Central Bank data), Clare Akamanzi, RDB's Chief Executive Officer (CEO) says they have set a new target of 1.15billion worth of investment projects for the 2013 calendar year.
That target could be achieved with less efforts considering global investors seem to be set to spend again with signs of global economic recovery.
The back to back trend in investment registration figures for Rwanda is telling enough for better things to come. For instance, 2011 saw an investment haul of US$626million which had taken an impressive lip from US$397million in the previous year.
Yet despite that remarkable growth, 2010 and 2011 were 'low years' compared to the two years before as far as investment registration is concerned.
Investments registered for the year 2009 were worth US$1.134billion having increased from US$831million in 2008.
"The results of 2012 shows we are back to normal and we can only do better in 2013," assured CEO Akamanzi.
Amidst fears that banks globally would cut lending to the private sector in response to the proposed stringent regulations on banks' saleable assets, the Basel Committee on Banking Supervision last week agreed to extend the grace period to 2019 - an extra four years, a development that was well received by the market with a surge in stock sales.
Experts say that the move will re-energize banks encouraging them to lend more hence increasing economic activity.
If this happens, the results will be far reaching-as far as Rwanda whose economy is now a prominent reference whenever Africa is mentioned.
According to RDB's Akamanzi, the sustained high rankings earned by Rwanda in the World Bank's Doing Business Report placing the country as one of the top five reformers in Africa will have a great contribution in attracting foreign investors to invest in the economy.
The RDB has in the past received criticism that what is normally registered as investments have not in most cases failed to materialize to actual investments hence holding back on anticipated benefits such as jobs and domestic tax revenue.
How much credit is available to the private sector will determine how many of the registered investments can actually kick off. The waning credit crunch that kicked in 2008 saw banks run out of money and were on the brink of collapse when bailouts rescued the situation.
Now the new regulations by the global regulator dictate how much, the banks will have to hold in cash and other highly "liquid" assets - such as government debt and some corporate bonds - that can easily be sold to at least see them through at least thirty days in the event a credit crunch crisis.
By 2015, banks will now have to hold only 60 per cent of the amount of highly-liquid assets first proposed though the amount will then increase by 10 per cent a year until the standards take full effect at the beginning of 2019.
Though experts including at Earnest & Young say the decision will have more impact on Europe and USA economies, African countries can't rule out benefiting from the move as a slow down for these two economies stressed African economies especially in the return on their main exports.
The USA and Europe are some of Rwanda's leading import partners. Even then, multi-national firms are diversifying into Africa, seen as the next big thing in business hence an indicator that anything good in Europe or USA will surely have positive impact on African economies.
Already, America's multi-billion dollar firm General Electric (GE) is considering moving multi-million dollar investments to Rwanda in areas of energy, education and healthcare.
Internally, Rwanda's central Bank has said it will maintain the Repo, the rate at which it lends to commercial banks at 7.5% which largely means a stable if not an increased lending trend by Banks to the Private sector which will most likely cause a surge in local investment.
The purpose of increased investment is mainly job creation and if Rwanda's registered investments all kick off as wished, a total of over20, 578 jobs are to be created, 11,522 more jobs than 2011.
Nsanganira tells EABW that projects in the Tourism, Energy, construction & Real Estate sectors attracted the largest investment values but Mining, ICT and Services sectors will provide the most jobs if all investment proposals in are implemented.
For example while tourism investments in 2012 were worth US$$327million with a potential of an estimated 2042 jobs, the Mining sector on the other hand attracted an investment worth of just US$67milion but will add roughly 6260 jobs on implementation.
The Company registrar's office says in terms of new businesses registered, 2012 hit a record high with 9031 companies registered as of December 19th, an increase of 42% from 2011.
"This represents about 35 companies registered each working day, compared to 24 in 2011, and only 2 companies per day 10 years ago," observed CEO Akamanzi.
A mix of small and large investments saw both local and international investment proposals make 2012 a very successful year for Rwanda. The top ten biggest investments have a total investment value of US$694.5million.