20 January 2013

Rwanda: Economic Zones to Reel in Investments

Kigali — Conveniently located 4km from the national airport on the outskirts of Rwanda's capital Kigali is what the authorities here have called the 'special economic zone' (SEZ) that will be home to many of the city's industries and other major enterprises.

SEZ according to officials at the Rwanda Development Board (RDB) the agency in-charge of investment promotion is one of the special programs that have been identified to help attract more foreign direct investment (FDI) into the country.

Africa as a whole managed to attract only 5.1% of the global FDI in 2011 and though small, it carried a 1% increment from the previous year. Rwanda's own FDI remains low with the World Bank's 2012 report placing it at US$ 42332000million as of 2010. Officials in Rwanda say the special economic zones are planned to especially target foreign investors to boost its FDI profile.

"This program {Special Economic zones} is designed to provide investors with industrial and commercial land, improving on availability of electricity, transport linkages, market access and availability of skills" said Clare Akamanzi, Acting CEO of RDB.

Up against some natural factors such as lack of vast natural resources such as minerals, being a land locked country with a small population, Rwanda has managed through a dedicated program to improve the doing business environment and investing in developing efficient corruption free public institutions to turn around the country's profile into an attractive brand with an appeal for both local and foreign investors, and it's working.

In 2012, investment proposals hit the US$1billion mark the highest in two years and the target for this year has been set higher at $1.3billion.

Since the inception and adoption of the SEZ concept by the country's cabinet in 2009, a regulatory law has since been put in place and RDB is currently nurturing a fully fledged body, the 'special economic zones authority of Rwanda (SEZAR) which will be in-charge of issuing licenses and performing other regulatory functions for the zones.

"The zones will be placed in different parts of the country based on demand," explains John Bosco Sendahangarwa, SEZAR's boss.

In these special economic zones, an investor finds fully developed land with all modern amenities such as electricity, water& sewage system, internet infrastructure and a fully developed road network and all they (investors) do is apply for allocation of plots to set up own structures to start business.

"We are giving our investors a soft landing in the processing of establishing their investments in the country," adds Sendahangarwa.

Though Kenya is planning to adopt the same approach, the special economic zones concept is currently an exclusive initiative to Rwanda. But to improve the region's competitiveness, Sendahangarwa says he would be glad to see the concept adopted by all regional counterparts.

Rwanda has 30 districts and five provinces and in a bid to balance development, special economic zones will be established in at least every province based on demand, according to SEZAR officials in an interview with this reporter last week.

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