Rwanda: The Best African destination for Investment.

Introduction

A report by the United Nations Conference on Trade and Development indicates that between 2006 and 2011, Africa recorded the highest rate of return on foreign direct investment at 14% compared to 9.1% in Asia, 8.9% in Latin America, and the Caribbean region.

According to Ayodele Odusola, ‘‘Africa is the most profitable region in the world,’’1 and the ideal time to invest in this continent is now and not tomorrow. Rwanda is a country located in East Africa, in Africa’s Great Lakes region. With a population of 13 million,2 this country bordering with Tanzania in the east, Burundi in the south, Uganda in the north, and the Democratic Republic of Congo in the west has managed to implement economic and structural reforms to support its economic growth.

Due to the political stability that has been observed since the end of the Genocide against the Tutsi in 1994, the country has been posting a constant economic growth of Gross Domestic Product (GDP) that has been around 8% per year for several years with stable inflation and currency depreciation.

3. Investor-friendly laws, physical and legal security, regional integration, and the development of information technologies constitute the different bases of a constant economic development that makes Rwanda the 2nd best economy in which to invest because of the strong and constant growth.4 1 See the article written in French on the web site: 1 Ayodele Odusola, Investir en Afrique : une bonne affaire et une stratégie d’entreprise viable, article consulter sur le site https : //www.un.org /africarenewal /fr /a-la-une/ 2 worldpopulationreview.com/countries/rwanda-population.

3 Accessed at www.gov.rw/highlights/economy-and-business 4 Government of Rwanda: Economy and Business (www.gov.rw) 5 Rapport Doing Business 2021consulté sur le site: Ease of doing business index – Wikipédia Rwanda enjoys an excellent investment climate, a strong and business-friendly government, a fast-growing economy, and access to markets throughout East Africa.

According to the 2021 Doing Business report, Rwanda is ranked 38th in the world and the 2nd African economy that facilitates the entry of foreign investment into the country.5 In this article, we intend to try to answer the question that potential investors ask themselves, “Why should I invest in Rwanda?“.

Section 1: Physical security and legal certainty are conducive to investment.

To address this section, it is appropriate to comment on the physical security of investors as well as legal certainty.

§1. Rwanda is a peaceful and hospitable country

In Rwanda, two international languages are spoken (English and French) in addition to the national language Kinyarwanda, and the population is characterized by legendary hospitality. In fact, the investors do not find any communication barriers or integration problems. The country is quiet and secure as the crime rate is one of the lowest in sub-Saharan Africa.

6 It has been ranked as the 6th safest country in the world and the safest country in Africa where one can even take a walk at night without feeling insecure. Moreover, the country has established good economic governance that reassures investors. It is the 3rd least corrupt country in Africa and ranks 54th in the world out of the 190 states ranked by the international organization “Transparency International”.

Beyond physical security and good economic governance, laws that promote investment have been put in place in Rwanda to ensure a conducive business climate for investment. The next section will analyze the laws that guarantee investment friendliness in Rwanda for investors.

§2. Investment-friendly legislation

With a view to attracting and facilitating investment, Rwanda has revisited the laws governing this area with a view to making governance more attractive while promoting new investment sectors. In a law that was published in the Official Gazette on 17 May 2015, incentives were taken to stimulate the growth of key sectors identified by the government; Export, Energy, ICT, Transport and logistics, Health, Financial Services, and Affordable Housing.8 In order to boost more

of the economy by investment, Rwanda enacted a new investment law, Law No. 006/2021 of 05/02/2021 on investment promotion and facilitation (New Investment Code) which took effect on 8th February 2021. Some of the notable changes in the new Investment Code relate to the priority sectors mentioned above such as :

• Mining activities relating to mineral exploration

• Construction or operation of specialized innovation parks or specialized industrial parks

• Transport, logistics, and electromobility

• Horticulture and cultivation of other high-quality crops included on the list approved by the Rwanda Development Board;

• Creative Arts in the sub-sector of the film industry

• Skills development in areas where the country has limited skills and capacities as determined by the Rwanda Development Board.9

1 See the article written in French on the website: 1 Ayodele Odusola, Investir en Afrique : une bonne affaire et une stratégie d’entreprise viable, article consulter sur le site https : //www.un.org /africarenewal /fr /a-la-une/ 2 worldpopulationreview.com/countries/rwanda-population.

3 Accessed at www.gov.rw/highlights/economy-and-business 4 Government of Rwanda: Economy and Business (www.gov.rw) 5 Rapport Doing business 2021consulté sur le site : Ease of doing business index – Wikipédi

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Written By:

Abayo & Co. Advocates

Jean Claude Mutabazi Abayo & Dieudonné Bashirahishize

Phone Number : +250 788 300 535

Email: info@abayo.law