Rwanda to do more to attract foreign direct investment

Rwanda is on a mission to attract $1.5 billion in foreign direct investments this year, a goal that seems ambitious but achievable based on the current trajectory. With 49 investments already bringing in $500 million as of May 2017 and $1 billion more anticipated, Rwanda is positioning itself as an attractive destination for global investors. Clare Akamanzi, the CEO of the Rwanda Development Board, sat down with CNBC Africa to discuss the strategies and challenges the country faces in reaching this target. One of the key points of contention is the disparity in reporting between UNCTAD's numbers and the World Bank's numbers. Akamanzi explained that while UNCTAD focuses on shareholders' loans and equity, the RDB counts the total size of deals signed, which includes various forms of financing. This discrepancy can lead to confusion in the reported numbers but does not undermine the overall investment inflow into the country. Rwanda's investment portfolio is diverse, with projects in sectors such as energy, construction, tourism, and a new airport on the horizon. These macro-level investments have the potential to transform the economy and create substantial growth opportunities. The government's focus on improving the business climate through reforms like streamlining tax administration and offering tax incentives to strategic investors is key to attracting more foreign capital. Akamanzi highlighted the importance of striking a balance between making it attractive for businesses to invest while also ensuring sufficient revenue generation to finance economic development. The recent reforms in reducing the cost and time to obtain a construction permit have bolstered Rwanda's construction sector. However, Akamanzi emphasized that the reforms are part of a broader government program that includes skills development, infrastructure, and financing initiatives. The ultimate goal is to create a competitive environment that drives economic growth and opportunities for all stakeholders. Despite the progress made in various sectors, challenges remain, particularly regarding currency fluctuations and hedging against risks. Akamanzi assured investors that Rwanda's Central Bank and Ministry of Finance have stable policies in place to mitigate these risks and ensure a conducive investment environment. One of the key strategies to boost revenues and promote sustainable tourism is by positioning Rwanda as a high-end tourism destination. By focusing on value-added experiences and targeting niche markets like luxury tourism and mice tourism (meetings, incentives, conferences, and exhibitions), Rwanda aims to maximize the economic benefits without compromising its natural resources. The recent uproar over increased gorilla permit fees raised concerns among locals, but Akamanzi reassured that efforts are being made to educate the public and involve Rwandans in conservation efforts. Overall, Rwanda's journey to attracting foreign direct investment is marked by promising prospects and pragmatic strategies that aim to balance economic growth with environmental sustainability and social inclusivity.