Rwanda attracted $2.006 billion in domestic and foreign investments last year, surpassing the target by $6 million. This reflects a 20 per cent growth from $1.675 billion that was recorded in 2017.
Of the top five investments into the country in 2018, four were local projects demonstrating that the local private sector is headed for maturity.
According to the latest statistics from Rwanda Development Board, local investments levelled up against Foreign Direct Investments with a 49 per cent share of the total investments.
This was however not as a result of reduced investments by foreign investors which made up 47 per cent of all investments. The remaining 4 per cent were taken up by joint ventures.
The top five investments with over $70 million injections include; Emerald Park Ltd Millennial Construction Ltd, Rwanda Innovation Fund, Jali Transport and Mara Phones.
Emerald Park Ltd is a local real estate firm currently involved in putting up Kigali Diplomatic Village, a real estate investment.
Millennial Construction is involved in – among other aspects – precast technology and seeks to help improve the speed of construction and quality control.
Rwanda Innovation Fund, which works to support and provide equity financing for SMEs, trains tech-oriented entrepreneurs in business planning and management in Rwanda, the East African Community and beyond.
The firm seeks to mobilise about $100 million in direct commitments from the Rwandan government and private investors, aiming at a multiplier effect of up to $300 million in follow-on investments to over 150 companies.
Jali Transport was formerly Rwanda Federation of Transport Cooperatives (RFTC), which recently rebranded and expanded, creating new subsidiaries.
The firm is now involved in transport management and management of bus terminals, construction as well as a microfinance company.
Mara Phones partnered with Google to produce smart phones tailored for the African market, seeking to ride on the growing smart phone market on the continent.
Clare Akamanzi, the Chief Executive Officer of RDB, noted that the difference between local and foreign investments was normal.
She noted that a dominance of FDIs in previous years has often been due to massive windfall injections by foreign investors in high capital projects such as the proposed Bugesera International Airport, which registered over $400 million.
She added that they were also noting increasing investment appetite from Diaspora Rwandans.
“We are registering investments by the Diaspora who have previously been investing in other countries across the continent,” Akamanzi said.
With the increased capacity of the local private sector and interest of international investors, she said that there is likely to be a growth in Joint Ventures in coming years.
Data from the RDB shows that the largest investments were recorded in manufacturing, mining, agriculture and agro-processing.
Twenty-six per cent of the investments represent export oriented projects which Akamanzi said is in line with government projections to fetch higher foreign exchange revenues.
She projected up to 50 per cent of export oriented investment to reduce the trade deficit and increase job opportunities.
Other major investments were Andela Software Development, a Rwandan based Pan-African hub, a Coltan/Tantalum refinery by PRG from Macedonia as well as investments into the local production of Heineken beer brand by Bralirwa.
OCP, from Morocco, also set up a large scale fertiliser blending plant. This is in addition to investments in a steel rolling mill by MasterSteel from Rwanda. The economy also attracted investments in production of mosquito bed nets by Vision Garments, from Rwanda, and a steel manufacturing plant by AARSAL STEEL, from India.
In the same period, Luna Smelter also set up a mineral smelting company, hospitality development around Lake Kivu by GEMS of Rubavu and mobility solutions development by Volkswagen also set up in the country.
Over the last eight years, investments have gone up from about $398 million in 2010 to $2 billion in 2018, which officials say reflects confidence from indexes such as the World Bank Doing Business Report where Rwanda ranked 29th globally and second in Africa.
RDB’s Chief Investment Officer, Guy Baron, said that the increased investments registered are a direct result of the initiatives that the Government has put in place to make the country an attractive destination for investment.
“Last year, we passed the $2 billion milestone, for the first time in the country’s history. This is evidence that Rwanda is being seen increasingly as a great place to do business, innovate and establish a hub from which to access the continent’s tremendous opportunities,” Baron said.
The investment values are drawn from project registration values reflected by each investor’s projected five year estimation of operating and capital investments to be made -whether financed by equity or debt.
However, records from the investment promotion agency show that registered projects typically take 3 years on average to become fully operational.
Akamanzi added that, often, most projects end up investing more than what was reflected in their 5-year business plans as has been shown by National Institute of Statistics when capturing Gross Domestic Product figures.
Among the factors that RDB attributes to the growth in investments include investor facilitation such as One Stop Centre, aftercare services, and investor engagement platforms such the senior management engaging with business leaders.