38 Foreign Private Investment and Investor’s Perceptions Report-2010 sectors. It is therefore critical for Government through Rwanda Development Board to market potentialities in other sectors to investors through different investment promotion strategies. • Regional diversification: The investment is concentrated in EU countries, the government needs to explore possibilities of increasing investments inflows from other regions such as EAC, COMESA, SADC and ASIA in order to balance the distribution of investment. 5.3. Government policy response There are a number of ongoing interventions by the authorities to address some of the challenges to conducting business in Rwanda. The Table13 below highlights some of the measures being taken to address different investment constraints.
39 Conclusion and Recommendations Table 13: Government policy response Challenge Measures being taken by Government of Rwanda 1 Interest rates The National bank of Rwanda is having dialogue with the financial institutions in an attempt to persuade them to lower the lending rates. • To achieve this, it has lowered the repo rate from 9 % in 2009 to 6% in 2010. This is especially to help private sector obtain loans at a lower interest rate. • It has introduced special loans for critical and risky sectors like agriculture. • The government has licensed and launched the Credit Reference Bureau Services (CRBS) to bridge the credit market information asymmetry between lenders and borrowers. The CRBS will provide timely and accurate information on borrowers’ debt profile and repayment history thus, enabling financial institutions to identify and track their customers’ credit history. 2 Exchange rate and inflation • The Government through the National bank pursues prudent monetary and fiscal policies to ensure overall macroeconomic stability focusing on exchange rates as well as inflation stability. • Bank of Rwanda reviews daily developments in the foreign exchange market and periodically intervenes to smoothen movements in the market. • Inflation is anticipated to fall further as the global prices of imported commodities continue to decline and improved production in agriculture. 3 Investment financing • The Rwanda Capital Market Advisory Council (CMAC) is working to develop and manage the most efficient, transparent securities market that matches international standards, and promotes a partnership among investors. • The Rwanda development bank (BRD), continues to issue long term financing to different sectors.
5
Energy infrastructure
(Cost and efficiency of
electricity)
•
At the moment government is currently addressing the power through additional supply
from the thermal generation plant in order to mitigate the power shortfall.
•
Rural electrification is being implemented in several districts within the country to
increase coverage.
6
Roads infrastructure,
inaccessibility to
international markets.
•
Government has allocated sufficient funds on development and maintenance of the
transport infrastructure.
•
In the long-term, Government is investing in the railways infrastructure to ease access to
the sea-port and supplement the existing road network.
7
Banking services
•
The government has eased licensing procedures to attract more international banks to
increase market competition and hence quick and customer care oriented services.
8
Internet and
communication
•
Government is about to complete fibre optic project to improve internet connectivity
throughout the country. The fibre optic will also provide connectivity to Uganda and
Kenya, linking to the East African sub-marine cables.
9
Customs services and
exercise duty
•
Government is implementing reforms in Rwanda Revenue Authority with emphasis on
strengthening management, developing better internal control and introducing more
integrated information systems.
•
RRA has installed Automated Systems for Customs Data (ASYCUDA) in all customs
stations and linked traders in order to facilitate clearance of import and exports.
•
RRA has introduced e-tax to ease payments of taxes.
40
Foreign Private Investment and Investor’s Perceptions Report-2010
41 References REFERENCES Bank of Uganda, (2009), private sector investment survey 2008. Business Monitor International, (2010), emerging markets monitor International Monetary Fund, (2009), balance of payments manual sixth edition International Monetary Fund, (2009), world economic outlook. National Bank of Rwanda, (2009), annual report 2008. National Bank of Rwanda, (2010,) annual report 2009. National Bank of Rwanda, (2011), annual report 2010. The World Bank, (2007), doing business 2008 The World Bank, (2008), doing business 2009 The World Bank, (2009), doing business 2010 The World Bank, (2010), doing business 2011 UNCTAD, (2006), world investment report 2007 UNCTAD, (2007), world investment report 2008 UNCTAD, (2008), world investment report 2009
42 Annexes ANNEXES Annex I: Investment by country in 2008
2008
No
Country
Flows
Stock
1
South Africa
20,863.9
28,779.3
2
China
19,215.7
21,019.0
3
Libya
9,502.9
18,421.7
4
Netherlands
8,527.7
12,707.8
5
Kenya
4,414.4
10,692.9
6
Mauritius
3,519.8
10,586.1
7
Germany
2,900.9
9,833.7
8
Belgium
2,719.5
9,371.0
9
US
2,568.6
8,208.9
10
Nigeria
1,270.3
7,983.6
11
United Kingdom
1,095.6
5,857.9
12
France
933.4
4,552.6
13
Luxembourg
631.0
4,158.7
14
European Investment
Bank (EIB)
527.0
2,568.6
15
Panama
488.3
2,043.6
16
Tunisia
407.0
1,442.8
17
Uganda
295.7
1,264.4
18
Australia
281.9
945.4
19
United Arab Emirates
140.8
939.0
20
Italy and Vatican City
99.7
835.5
21
Other
-
2,810.5
22
Grand Total
79,838.4
165,023.1
43
Annex
Annex II: Investment by country in 2009
2008
No Country
Flows
Stocks
1
South Africa
12,326.9
3,808.5
2
China (mainland only)
People`s Republic of
1,464.4
22,624.3
3
Libya
11,117.7 22,251.6
4
Mauritius
10,638.1 20,036.9
5
Netherlands
7,349.9
19,740.6
6
Luxembourg
6,014.8
17,244.6
7
Belgium
4,625.3
14,486.3
8
Kenya
4,474.4
11,557.5
9
United Kingdom
2,719.2
11,148.4
10 Nigeria
2,471.7
8,319.5
11 US
2,352.9
7,742.0
12 Tanzania
2,126.5
7,010.7
13
European Investment Bank
(EIB)
702.9
6,182.4
14 African Development Bank
677.8
4,413.8
15 Germany
470.3
3,593.5
16 Panama
406.9
2,039.0
17 Italy and Vatican City
380.6
1,770.6
18
France
333.8
1,642.6
19
Tunisia
119.3
1,413.9
20
Canada
116.0
1,259.4
21 Other
-
4,954.1
22 Grand Total
79,828.7 223,240.1
Annex III: investment by sector in 2008
Sector
2008
Inflow
Outflow
Stock
Information and
Telecommunication
46,337.1
100.3
64,602.9
Finance and
Insurance activities
15,195.8
1.8
58,296.9
Accommodation
and Food services
7,883.0
0.0
8,444.4
Agriculture, forestry
and fishing
2,812.2
0.0
6,317.6
Whole sale and
retail trade
2,638.9
0.0
11,036.9
Mining and
Quarrying
2,118.9
0.0
971.0
Professional and
Scientific activities
673.6
0.0
655.3
Real estate
activities
246.7
0.0
486.0
Transportation and
Storage
226.5
0.0
454.3
Other
1,705.8
1.5
13,757.6
Total
79,838.4
103.5
165,023.1
44
Foreign Private Investment and Investor’s Perceptions Report-2010
Annex IV: investment by sector in 2009
Sectors
2008
Inflow
Outflow
Stock
Information and
Telecommunication
24,539.11
1,265.62
76,338.82
Whole sale and
retail trade
17,877.06 4,144.57
22,774.58
Finance and
Insurance activities
8,359.66
10,246.23
77,614.51
Agriculture, forestry
and fishing
6,587.45
177.31
11,301.81
Construction
5,438.42
1,297.08
3,947.38
Manufacturing
4,349.98
673.76
17,816.80
Mining and
Quarrying
2,200.77
-
2,023.66
Accommodation and
Food services
1,134.95
0.00
2,920.66
Real estate activities
285.34
-
478.01
Professional and
Scientific activities
221.70
59.75
836.51
Other
8,834.27
-
7,743.52
Total
79,828.7
7,864.31 23,796.26
56 Foreign Private Investment and Investor’s Perceptions Report-2010