Investing in Rwanda – An Overview
November 2009
Rwanda – land of a thousand hills, home to a thousand opportunities
© Rwanda Development Board, Confidential
This document does not constitute Government policy
This document forms part of an oral presentation and should not be reproduced or distributed without prior permission
Reasons for investing in Rwanda
Sustained
high growth
Access to
markets
8.8% average year-on-year GDP growth since 2004 sustained by a liberal macroeconomic policy

GDP growth rate in 2008 of 11.2%, highest among East African countries

A clear vision for growth through private investment set out by President Kagame (Vision 2020)

Politically stable with rule of law and zero tolerance for corruption

Fastest global reformer of business regulations based on World Bank Doing Business Survey

Simple taxation, development of industrial parks and free trade zone, and creation of stock exchange

Increasingly attractive destination for FDI – $103M in 2008 represents 10x increase from 2005

Rwanda Development Board, an independent agency, created as a ‘one-stop centre’ for investors

Most densely populated country in Africa with ~10M people, majority below the age of 20

A hub for rapidly integrating East Africa: located centrally bordering 3 countries in East Africa which
has an existing Customs Union and forming a Common Market in 2010 for 125M people

Potential opportunities for investment abound, particularly in the following sectors:
Untapped
investment
opportunities

Source:
RDB

Infrastructure: Opportunities in rail, air transportation to further develop Rwanda as an EAC hub

Agriculture: Backbone of economy, potential for growth through productivity and value addition

Energy: Power generation, off grid generation and significant methane gas opportunities

Tourism: Unique assets creating booming sector; growth potential in birding and convention

Information and Communication Technology: Priority sector for achieving Vision 2020
© Rwanda Development Board, Confidential – Not to be reproduced or distributed
Investor
friendly
government
and climate

Other attractive sectors include Real estate and construction , Financial services, and Mining
2
A country of sustained growth and
opportunity
Sustained Real GDP growth
8.8% annual
growth
2000
1800
© Rwanda Development Board, Confidential – Not to be reproduced or distributed
RWF (billions)
Outperforming the region on Real GDP growth
Real GDP growth rate in 2008
1600
12%
1400
1200
10%
1000
8%
800
600
6%
400
200
4%
0
2004
2005
2006
‘08 Share of total
2007
2008
‘04-’08 growth rate
Manufacturing
7%
7.6%
Industry - non
manufacturing
Agriculture
9%
15.0%
36%
5.1%
Services
48%
11.0%
2%
0%
Source: Rwanda MINECOFIN, 2009; % of GDP minus adjustments (import duties), IMF World Economic Outlook 2009
*Industry – Non Manufacturing is mostly construction with a little mining and electricity and gas
3
A favourable and stable macroeconomic environment
Single digit inflation
15.4%
12.2%
600
9.6%
9.1% 8.9% 9.1%
10%
650
© Rwanda Development Board, Confidential – Not to be reproduced or distributed
Global food and fuel price
increase caused
temporary spike, now
under control
20%
15%
5 years of stable exchange rate (RWF to 1 USD)
5.8% 5.0% 5.0%
550
5%
500
0%
2004
2006
2008
2010
2012
450
400
Government revenues growing steadily
350
USD Billions*
Tax
Non-tax revenue
300
0.8
0.6
250
0.4
200
0.2
0.0
2004
2005
2006
2007
2008
*Constant exchange rate
Source: 2004-2007 NISR, 2008 MINECOFIN Projection, BNR, RDB analysis
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A country which is safe, secure and an
easy place to live
A country rebuilt and on the rise
Rwanda has been rebuilt since the traumatic
events of 1994 and is a thriving, safe country

Kigali representative of this turnaround

A clean and green city, with the lowest
crime of any capital city in the region

Winner of UN Habitat Award (2008) the
highest award for an urban area
World Bank Governance Indicator: Political
stability (Higher is better)
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

More stable than most emerging markets
Robust governance creates long term stability
Source:
World Bank ‘Governance Indicators’ 2007, UN, press search, RDB

Republic with elected President, Parliament of
two houses (with most members elected from
local bodies)

The judiciary system includes Supreme, High,
District as well as Commercial courts
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Strong leadership has created a probusiness, near zero corruption country
A President who understands business
President Kagame, recognized
as a ‘CEO President’
understands the need for private
sector investment

Advised by a team of
international business leaders
including Prof. Michael Porter of
Harvard Business School
World Bank Governance Indicator: Control
of Corruption (Higher is better)
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

A bastion of near zero corruption
A country with a clear vision

Vision 2020: “The major aspiration of Vision 2020
is to transform Rwanda’s economy into a middle
income country...this will not be achieved unless
we transform from a subsistence agriculture
economy to a knowledge-based society, with high
levels of savings and private investment.”
Source:
World Bank Governance Indicators, Rwanda ‘Vision 2020’, RDB
Respected by the business community

“A mecca for venture capitalists”
- CNN Money: Business 2.0

“Rwanda is the most undervalued stock on
the continent and maybe in the world”
- Fortune Magazine
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A government committed to making it
easier to do business
Fastest reforming country in World Bank’s Doing Business 2010 rankings
Business regulations now easier in Rwanda than the average economy in Eastern Europe, Asia,
Middle East, Latin America and Africa
Rose record 76 places in World
Bank’s global survey

4 major commercial laws passed
in 2009 in addition to
administrative changes that
make it easier to start a
business, employ workers,
register property, get credit and
be protected as an investor

Rwanda #11 in world for ease of
starting business

Source:
World Bank ‘Doing Business’ Rankings 2010
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

2 steps in less than 3 days
to register a company
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A taxation system and infrastructure
projects supporting growth in FDI
Specialized infrastructure for industry and
trade
Simple business taxation for investors
As an EAC custom union member, Rwanda has:



Duty free importation for products produced
within EAC
Common external tariff: 0% on Raw
materials and Capital Equipment; 15% on
intermediate goods; 25% on finished goods

Constitutionally protected free repatriation of
capital and profits

100% write off of R&D costs

Additional fiscal incentives in strategic sectors

Continuing work to simplify the taxation system
Kigali Industrial Park and Free Trade Zone
under construction (completion end ‘09):

Sites to have reliable infrastructure and
commercial services

Easy access to the planned new Bugesera
International Airport
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

As a result of all these factors, FDI investment
growing fast
Building robust capital markets

Source:
Stock exchange established in January 2008
with OTC transactions in bonds and equities
RDB, BNR and MINECOFIN

Global and Pan-African investors include Actis,
Aga Khan hotels, MTN S. Africa, Starbucks,
TiGO, Dubai World, Contour Global, Ecobank
8
The Rwanda Development Board is
proof that Rwanda is open for business
One stop centre for all investors

Investor focused
Independent and
influential
Built with global
expertise
Source:
RDB
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

Created by consolidating all key agencies in government responsible for
business registration, investment promotion, environmental clearances,
privatization and specialist agencies which support the priority sectors of
ICT and tourism as well as SMEs and human capacity development

Reports directly to the President

Guided by a Board composed of all the key Ministers (e.g., finance,
commerce, infrastructure, agriculture)

Modelled on international best practices such as Singapore EDB

Advisory and hands-on support from global entrepreneurs and experts from
Singapore Development Board, World Bank, IFC and the Office of Tony Blair
9
A hub for investors to access the
rapidly integrating East African market
A large market
Population in Millions
Kenya
35.3
Tanzania
39.7
Uganda
32.0
Rwanda
9.6
Burundi
7.9


Established a Customs Union (2005)

Working towards a Common Market in 2010,
a Monetary Union by 2012 and, ultimately, a
Political Federation

Functioning political and legal organs

Regional infrastructure projects are being
financed and implemented and regional trade
has increased
Rwanda: A gateway to Africa and the world

Efforts to combine the East African
Community, the Common Market for Eastern
and Southern Africa, and the Southern Africa
Development Community underway, putting
600M people into a single market.

Existing bilateral trade agreements with the
US and initiatives with the European Union
(EU) and others in advanced stages
EAC comprised of 125 million people with
a combined GDP of over USD 70 billion
Source: Data from IMF World Economic Outlook
10
© Rwanda Development Board, Confidential – Not to be reproduced or distributed
Country
EAC: Taking real strides towards integration
Opportunities for investment
Priority investment sectors:








Source:
RDB
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

Infrastructure
Agriculture
Energy
Tourism
Information and Communications Technology
Real estate and construction
Financial services
Mining
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Sector profile: Infrastructure
Rail, air, logistics investment opportunities abound to develop Rwanda as an EAC hub
Roads
Roads represent 90% of transportation in the country

Over 14,000 km (8,700 miles) of roads, ~20% of which is paved

Regional hub for road transport as it connects important regional
players, from the east coast of Africa to the west coast
Rail

There are no railroad systems available, but a
new railway line is in the pipeline:


Air

2 branches of the railway line are:

Isaka-Kigali railway project to link to
the port of Dar Es Salaam

Rwanda-Burundi via Congo to link
the southern Africa Cape Gauge
railway network
Cost of $4B and is currently fundraising

Source: RDB
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
The Kigali International Airport has an annual
capacity of 4.4M passengers

Rwandair is the national air carrier with
flights to number of regional destinations
(Arusha, Entebbe, Nairobi and
Johannesburg)

Other international airlines include Kenya
Airways, Ethiopian Airlines, Brussels
Airlines, China Postal Airlines, and African
Star Airways
A new airport planned 40 km outside of Kigali,
for estimated construction cost of $300M for
Phase 1
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Sector Profile: Agriculture
World class exports but many opportunities for regional export expansion
Agriculture is the bedrock of the economy
National strategy driving productivity, quality
GDP Contribution, 2008
Services
48%
36%
Agriculture
Industry
Around 87% of the population is engaged in
agricultural activities

Exports led by tea, coffee but many options




Government and development partners have
focused on improving quality through fertiliser
distribution and farmer training programmes

This resulted in 15% growth in the agricultural
sector in 2008 and rising prices for coffee
Coffee – world class and winner of a number of
international awards; main agricultural export
with buyers including Starbucks and Sainsbury’s
Tea – relatively underdeveloped but high
potential with 6% increase in volume creating
29% additional value to sector in 2008; buyers
include Mark’s & Spencer’s in the UK
Many other opportunities – Dairy, fruits (many
exotic varieties for juice), fresh cut flowers, silk
and food crops for export to region
Source:
© Rwanda Development Board, Confidential – Not to be reproduced or distributed
16%
MINECOFIN, OCIR Cafe, RDB
Value addition is a major opportunity

Privatization of tea plantations and factories
has begun in 2009 and is ongoing

Further opportunities in coffee washing and
roasting as the premium harvest grows

Also in distribution, markets and cold chain
infrastructure for export products
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Sector profile: Energy
New generation and methane gas can open access beyond Rwanda to neighbouring markets
Overview
80% of energy from wood combustion and
electricity coverage levels low at 6%

Generation
60-69MW of electricity generation (50% hydroelectric, 50% diesel) today

Recognising the strategic importance of the
sector, the GoR has ambitious plans to more
than double generation capacity to 130MW
through methane gas, hydro (macro and micro)
and 1 heavy fuel oil plant

For instance, in micro-hydro, 333 potential sites
identified (50KW-1MW) by 2008, 2 constructed,
21 under construction and 10 scheduled
Power grid

Power grid coverage is planned to expand to
67% of the region by 2012 through a $311M
capital budget roll-out plan

Transmission and distribution networks to
expand from 3,300km to 5,000km by 2012
Renewable energy

Targeting 90% electricity from renewable source

5200 ha of forests for carbon credit potential

Example: recent agreement with US/ UK based
company funded by leading UK PE firm to
produce biodiesel by planting 10,000 ha of
Jatropha plants ($35M investment in 2 years) to
address 15-20% of domestic diesel demand
Source:
RDB, Ministry of Finance
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

Methane Gas

50-55 billion m3 of methane gas in Lake Kivu:

1st Gas Concession and Power Purchase
Agreement signed with Contour Global –
100MW KivuWatt power plant under
construction expected to produce
4MW/hour for ~$324M

Further opportunities such as a 2nd
concession at Lake Kivu and conversion
of gas to liquid and gas to fertilizer
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Sector profile: Tourism
Tourism sector booming, but significant opportunities remain
Rwanda has unique natural assets
Visitor numbers have been booming





Virunga National Park: natural habitat for 600 of
the 800 rare mountain gorillas made famous by
the work of Diane Fossey. Park includes a
mountain lodge in the ‘Condé Nast Hot List’
The rainforests of Nyungwe National Park:
home to rare chimpanzees, birds and elephants
Lake Kivu: surrounded by stunning beaches and
dormant volcanoes covered by lush vegetation. A
4 star Serena resort is one of several hotels
Akagera National Park: offers the potential to
be one of East Africa’s great safari destinations
Birding tourism: Rwanda has over 1/3 of
Africa’s bird species, the highest concentration in
Africa with 260 species in Nyungwe forest alone
Source:
ORTPN, KPS, RDB
Leisure
42%
Transit
15%
Relatives
16%
Business
27%

In 2008, leisure visitors increased 50%

26% increase in business/conference
visitors – a priority area of significant potential

There are 187 hotels and 4102 hotel rooms in
Rwanda of which only 7 are upper range

The average room occupancy rate for upper
range hotels was 70% in 2008 with foreign
tourists accounting for 97% of bed nights sold
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© Rwanda Development Board, Confidential – Not to be reproduced or distributed
Total Tourist Expenditure

In 2007, leisure
tourists spent
$209M, making
the tourism
industry the
country’s
largest foreign
exchange
earner
Sector profile: ICT
ICT – Information and Communication Technology – top priority for 2020
Overview of ICT
Attracted ~$500M in investment over the last
three years by both private and public sector

The government has invested in building the ICT
infrastructure through:


a 2,500km optic fiber that covers Kigali
city and the entire country, with a total of 7
regional links to the neighboring countries

Kigali City Wireless Broadband due to be
commissioned early next year

ICT park set up for investors in pilot phase
ICT in Rwanda currently encompasses, in
varying degrees:
Source:

Wireline telephones

VoIP

Dial-up internet, ISDN based internet,
broadband internet

Computer software use and development,

Computer hardware, assembly, and repair
RDB

MTN Rwanda and Rwandatel are the dominant
players ,offering fixed telephones, mobile
telephones, and internet services. TiGO, the 3rd
operator, is set to begin operation by end of ‘09

Between the two companies, there are
approximately 2M mobile subscribers,
representing 20% penetration

A sizeable private sector is growing around the
networking and software development sectors,
with Rwandan companies exporting services to
Burundi and Eastern DRC

Rwanda is participating in a $24M World Bank
project to connect its national backbone to
submarine cable:

© Rwanda Development Board, Confidential – Not to be reproduced or distributed

Major players in telecom
There are three optic Service Providers
Seacom, Teams and Eassy, at the East
Coast to link various African countries to
the global network.
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Sector profile: Real estate & construction
Growth creating boom in demand for commercial and residential real estate development
Real estate is booming
Residential real estate
In 2007, Rwanda’s development and public
works sectors experienced a 10% growth
creating a shortage of fully functional office
space and residential housing

GoR projects that by 2020 approximately 30%
of the population will live in urban areas. To
date, only about 5% of residents in Kigali own
modern-style houses.

From 2003-2008,investment in the construction
sector grew from $100M to $350M. In 2008,
revenues from the general construction sector
increased by 51% driven by:

In Kigali alone, demand for housing is 8,00010,000 units per annum. The combined
demand for housing countrywide is estimated
to be ~25,000 units per annum

Source:

Population growth of 2.8% combined with
urban growth currently at 4% per annum

Growth of the middle class

Diaspora returning to Rwanda
As a result, there is also a shortage in
construction material.

Rwanda imported $64.6M of construction
materials in 2007 and $140M in 2008

This includes 100% of steel and a
majority of other construction materials
RDB
Commercial real estate

The recent increase in foreign investments has
created a shortage of upper end office space
with fully equipped telecommunications,
utilities, and power. From 2003 to 2006 rent on
these buildings increased between 50-200%
Type
Rent price
Construction cost
Residential
$2500 - $4000 per
unit
$200 – 215 per sq
foot
Commercial
$46 - $53 per sq foot
$335 – 365 per sq
foot
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© Rwanda Development Board, Confidential – Not to be reproduced or distributed

Sector profile: Financial services
The banking sector remains relatively underpenetrated
Overview
Key players
~ $200M of equity capital supporting ~$1B in
total assets

Estimated 12% of the population had a bank
account in 2007

20% sector growth rate in 5 years driven by:

GoR enforcement of banks meeting
international banking standards

The “Financial Sector Development
Program” which increased the minimum
capital requirement from $2M to $8M and
requires banks to prove they are qualified
before receiving a charter

Policy, strategy and incentives in place to
develop capital markets


Interest rates in line with the region
Lending rate %
Deposit rate %
18
15
12
9
6
3
0

Rwanda
Source:
Kenya
RDB, Ministry of Finance
Tanzania
The banking sector is comprised of eight
commercial banks, one primary microfinance
bank, one discount house, one development
bank and one mortgage bank

Commercial banks represent 76% of the
economy’s total financing while micro
finance institutions serve 88% of
depositors and 90% of borrowers

The microfinance sub sector consists of
more than 50 relatively small institutions
where ~ 11% of Rwandan assets and
~ 3.5% of the population hold accounts
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

The 3 largest local banks are:

Banque de Kigali (100% govt. owned)

BPR (98% private, including Actis)

BCR (80% private)
Ecobank, Access Bank and KCB are among the
international banks with a presence in Rwanda
Burundi
18
Sector profile: Mining
Unexploited opportunities in ores, processing and diversification abound
Mineral exports have room for growth
Rwanda’s main mineral exports are ores
processed to extract tin, coltan and tungsten

Only 25% of ~$ 200M potential output currently
exploited


A strong, investor friendly
legal and policy framework
being put in place

Significant opportunities in processing ores

Diversification opportunities in quarries (for
construction materials) and precious stones
(gold, diamond, beryl, topaz, rubies, sapphires,
gamets and other unexploited deposits have
been identified

There are major peat deposits in the southwest
of Rwanda which are only just being exploited
and could be used for electricity generation or
processed as an alternative to fire wood
Share of production volume by source, 2007
MINIRENA, RDB
A national mining survey is
being conducted to identify
mineral deposits
Opportunities in diversification and processing
Significant opportunity to increase productivity
through industrial mining
Source:

19
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

Work is being done to develop the sector
Summary of selected potential
investment opportunities
Sector
Estimated investment
Expected timing
Isaka Railway
Bugesera Airport
Kigali Industrial Park (KIP)
Convention Centre and Hotel
ICT Park
Irrigation Project
Fresh Food Market
Flower Park
Fruit Juice Concentrate Plant
Milk Processing Plant
Prodev Rwanda
Infrastructure
Infrastructure
Infrastructure/Real estate
Real estate/tourism
ICT/Real estate
Agriculture
Agriculture
Agriculture
Agriculture
Agriculture
Agriculture
$4B
$300M
$12M
$150M
$115M
$120M
$48M
$21M
$7M
$7M
$5M
Construction to start in 2014
Construction to start in late 2010
2009
Construction to start in late 2009
TBC
Construction to start in 2010
2010
As soon as funding is secured
As soon as funding is secured
As soon as funding is secured
Implementation in Feb 2010
30% of the company
20% of the bank
50% of the company
2009-10
2009-10
2009-10
60% of the company
60% of the company
60% of the company
2009-10
2009-10
2009-10
© Rwanda Development Board, Confidential – Not to be reproduced or distributed
Project/Company
Planned Privatisations through the Capital Markets
Bralirwa
BCR
MTN
Beverages
Banking
ICT
Planned Privatisations through trade sales
MATA
Tea
Shagasha
Tea
Gisakura
Tea
Source: GoR
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Key contacts
www.rwandainvest.com

Clare Akamanzi, Deputy CEO (Investment)


Source: RDB
© Rwanda Development Board, Confidential – Not to be reproduced or distributed

cakamanzi@rwandainvest.com
+250 78830 1661
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