BUSINESS OPPORTUNITIES IN RWANDA FACT PACK 2016 Business Sweden in Nairobi
RWANDA BRIEF FACTS BASIC FACTS Population: 12,444,550 (2014) Area: 26,338 sq. km GDP: 8.058 USD billion (2014) Inflation: 4.07% (2013) Currency: Languages: Rwandan franc (RWF) Kinyarwanda, English and French Exports: 653 million USD (2014) Imports: 1.95 billion USD (2014) Swedish Export: 16.6 million SEK (2014) Swedish Import: 73 million SEK (2014) Capital: Kigali MAP OF RWANDA Uganda Rwanda Burundi Tanzania Kenya SOURCES: EURO MONITOR INTERNATIONAL, CIA FACT BOOK, IMF, KOMMERSKOLLEGIUM BUSINESS SWEDEN 12 FEBRUARY, 2016 2
RWANDA HAS MADE ENORMOUS ECONOMIC PROGRESS AFTER THE GENOCIDE New multi party constitution is promulgated Genocide between the Hutus and the Tutsis Paul Kagame elected president Rwanda becomes a full member of EAC Issue of the first Euro bond Next general election Rwanda gains independence in 1962 1991 1994 1995 2000 2007 2011 2013 2017 600MUSD pledged as aid to reconstruct the country Vision 2020 is launched which aims to transform the country Laying of the national fibre optic network is completed BY JOINING THE EAC THE ECONOMIC, POLITICAL AND SOCIAL PROSPECTS OF RWANDA HAVE IMPROVED SOURCES: BBC, WORLD BANK BUSINESS SWEDEN 12 FEBRUARY, 2016 3
Good governance and a capable state Human resource development and a knowledge based economy A private sector-led economy Infrastructure development Productive and market oriented agriculture Regional and international economic integration RWANDA AIMS TO BE A MIDDLE INCOME ECONOMY BY 2020 Rwanda long term development goals are embedded in the strategic plan entitled Vision 2020, whose objective is to transform the economy into a knowledge based, service oriented with a middle income country status by 2020 The plan is centered around the below six pillars and interwoven with three cross cutting issues Gender equality Protection of the environment and sustainable resource management Science and technology GENDER EQUALITY IS A KEY HIGHLIGHT FOR RWANDA WITH A REPRESENTATION OF 64% WOMEN AS MEMBERS OF PARLIAMENT SOURCES: MINISTRY OF FINANCE AND PLANNING BUSINESS SWEDEN 12 FEBRUARY, 2016 4
AGRICULTURE IS THE LARGEST CONTRIBUTOR TO RWANDA'S ECONOMIC OUTPUT CONTRIBUTION TO GDP BY SECTOR (2014) Industry 14% Agriculture, Forestry & Fishing 33% Other 5% Services 47% CHARACTERISTICS The services sector contributed 47% to the GDP, stimulated by government expenditure as a result of inflow of large foreign aid Wholesale and retail trade services were the main drivers of the services sector The agricultural sector employs 90% of the Rwandan workforce, with coffee and tea being the major export products Weaker growth in the construction and to a lesser degree manufacturing contributed to the slow growth in the industrial sector The extractive sector has become Rwanda s second largest foreign exchange earner A poor logistics network is one of the major challenges that Rwanda faces with over dependence on road freight and transport networks of neighboring countries THE GOVERNMENT IS COMMITTED TOWARDS MAKING THE SERVICES SECTOR THE PRIMARY DRIVER TOWARDS ECONOMIC GROWTH SOURCES: NATIONAL INSTITUTE OF STATISTICS RWANDA,; BUSINESS SWEDEN ANALYSIS; KPMG RWANDA PROFILE REPORT, BUSINESS SWEDEN 12 FEBRUARY, 2016 5
RWANDA S ECONOMY HAS GROWN BY 10.8% IN THE LAST 3 YEARS AND IS EXPECTED TO GROW FURTHER GDP 2012-2017E USD billion 12.4% MAIN GROWTH DRIVERS Economic growth over the next three years is expected to grow further by 12.4% 4,4 10.8% 4,8 5,4 6,1 6,8 7,7 Good governance has contributed significantly to Rwanda s recent economic success. Economic reforms have been evident with the country been voted as the world s best reformer since 2005 by the World bank s doing business report 2014 Regional integration with the East Africa community opens up significant business opportunities Significant resources are being directed toward infrastructure development to address the current shortfall 2012 2013 2014 2015e 2016e 2017e CAGR* Foreign aid contributes towards 30-40% of the budget, a shortfall of aid in 2012 indicated a structural bottleneck with the economy growing at 4.7% in 2013 ECONOMIC REFORM IN RWANDA IS EXPECTED TO RESULT IN FURTHER ECONOMIC GROWTH SOURCES: RWANDA ECONOMIC UPDATE, IMF, WORLD BANK,; BUSINESS MONITOR INTERNATIONAL, EUROMONITOR BUSINESS SWEDEN 12 FEBRUARY, 2016 6
PROJECTS IN RWANDA'S GROWTH PLANS ARE MAINLY DIRECTED TOWARDS INFRASTRUCTURE DEVELOPMENT Lake Kivu Ferry System 2010-TBD A fast ferry system for tourist and a highly populated area, with a cargo system being an additional option is expected with the design having been completed in January 2015 Regional Railway Projects The Mombasa- Kampala- Kigali railway is underway with the value of the project at 1.5 BUSD The Dar-es- Salaam- Isaka- Kigali project valued at 977 MUSD The National Paved Road Network 500Km of the road network is targeted for paving by 2018. Feasibility studies are also underway for a BRT system Rusizi 3 A 147 mw hydropower plant meant to serve the Economic community of the great lakes countries; Rwanda, DRC and Burundi Airports 2014-2018 Construction of Rwanda s third international airport (New Bugesera International airport) at a cost of 600 million USD. The airport will ease traffic at the Kigali International airport and will have a capacity of 1.5 million passengers per annum REGIONAL AND NATIONAL PROJECTS CHARACTERISE THE INFRASTRUCTURE DEVELOPMENT PROJECTS IN RWANDA SOURCES: AFRICA DEVELOPMENT BANK; RWANDA DEVELOPMENT BOARD BUSINESS SWEDEN 12 FEBRUARY, 2016 7
SWEDISH EXPORTS TO RWANDA DECLINED IN 2013-14 HOWEVER IMPORT FROM RWANDA INCREASED IN 2014 SWEDISH EXPORTS TO RWANDA, 2010-2014 SWEDISH IMPORTS FROM RWANDA, 2010-2014 SEK million SEK million 152,0 146 156 16,6 106 73 8,1 9,2 10,2 1,8 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 SWEDISH EXPORTS TO RWANDA, 2014 SWEDISH IMPORTS FROM RWANDA, 2014 Other machinery and apparatus 11% Telecommunication equipment 89% Chemical manufactured goods and articles Crude materials and mineral fuels 2.1% Food beverages and tobacco SOURCES: UN COMTRADE; KOMMERSKOLLEGIUM; BUSINESS SWEDEN ANALYSIS BUSINESS SWEDEN 12 FEBRUARY, 2016 8
OPPORTUNITIES FOR SWEDISH COMPANIES HAVE BEEN IDENTIFIED IN SIX SECTORS Transport infrastructure Rwanda is a landlocked country highly dependent on the road mode of transport. The government is working towards diversifying this due to the logistical challenges experienced National and regional projects are ongoing in air, rail and road transport are underway Energy The energy sector is highly dependent on hydropower, supply is limited, projects are underway to diversify the sources to include geothermal, peat to power, methane gas and expand on the hydropower sources Opportunities for public private partnership are available Agriculture Agriculture is the principal contributor of employment though subsistence in nature. Opportunities to invest in mechanization for irrigation and large scale farming, food processing, value addition, distribution and cold chain exist Mining Mining Is the second largest export and is fast expanding with exploration for mineral deposits underway. Early indications reveal potential for copper, zinc, phosphorous and semi- precious stone, data expected end of 2015 The sector is characterized by investor friendly legal and policy framework ICT Skill development in the ICT sector is a priority for government. There has been growth in the sector with Rwandan companies exporting services to Burundi and DRC. There are several avenues for growth BUSINESS SWEDEN 12 FEBRUARY, 2016 9 With 4GLTE availability demand for advanced IT services is expected POTENTIAL FOR GROWTH EXISTS IN ALL THE SECTORS Tourism A strategy focusing on high end eco tourism has been developed by the government and invites private investment into developing the sector, which is a key source of foreign exchange SOURCES: RWANDA DEVELOPMENT BOARD; BUSINESS MONITOR INTERNATIONAL
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