million, manufacturing scooped $ 172 million, while $ 68.8 million went into finance and insurance.
Africa’ s FDIs to grow in 2016 In 2015, global direct investment flows increased by 40 per cent, the United Nations’ Commission on Trade and Development World Investment Report 2016 revealed, but Africa’ s foreign direct investment decreased by 7 per cent.
Sub-Saharan Africa was hit the hardest, with South Africa recording an alltime low of 60 per cent decrease in FDI in 2015.
However, experts say that foreign direct investments into Africa could grow in 2016. Already, in the first quarter of 2016, the continent registered a 25 per cent increase compared with the same period last year.
Francis Gatare, CEO of the Rwanda Development Board( RDB), says that in Rwanda, for instance,“ pioneering initiatives by businesses are changing the game and creating attractive prospects for investment.”
“ Other nations are also making an active effort to enact business-friendly policies and tax incentives in order to attract investors overseas,” he says.
North Africa is expected to attract the largest foreign direct investment to the continent in 2016, with Egypt leading the pack. Ethiopia, Mozambique, Tanzania and Rwanda are some of the sub-Saharan countries that are expected to perform well this year. According to the FPC report, Rwanda remains among the 10 most attractive nations in Africa for investors due to its“ favourable investment conditions”.
“ Nations such as Rwanda, South Africa and Kenya position Africa as a viable investment prospect. As more nations follow suit, the continent will be on the cusp of becoming both an economic and technological hub for investment,” says Sindiso Ngwenya, head of the Common Market for Eastern and Southern Africa( COMESA).
Continent-wide, Rwanda ranks as ninth most attractive to investors, while in East Africa the country ranks second after Kenya, which comes fourth at a continental level. Tanzania and Uganda rank 12th and 13th respectively.
RDB’ s Gatare attributes Rwanda’ s investor-attractiveness to the country’ s business reforms- such as tax holidays of up to seven years, government protection of investments, easy settlement of disputes, reduction of time spent registering a company from 24 to six hours, transfer of funds, as well as special economic zone facilitation, among others.
“ We expect FDI inflows to increase tremendously because of an improved business environment,” Gatare says, adding confidently that,“ Rwanda is still virgin for private investments... A wide range of sectors of the economy are largely untapped.”
Paul Sinclair is the Global African Investment Summit COMESA and the Government of Rwanda( TGAIS-COMESA Rwanda) organising committee member. He
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al, agricultural and social infrastructure. Heavy investment in Rwanda’ s information and communications technology has been crucial to helping the nation spearhead their long term growth strategies, allowing it to become a place of interest for investors.”
Other major draws for investors are: Rwanda’ s relatively easy burden of government regulations, which are kept at the minimum required to balance oversight with efficiency; social stability, manifested by an unusually low prevalence of crime and violence; and, perhaps more than anything else, published studies by credible global institutions that have touted the country as one of the best places to do business in Africa.
For instance, Rwanda ranks high on the World Bank’ s Ease of Doing Business index. In the Bank’ s 2015-2016 report, Rwanda improved its world ranking to 46th, up from 48th the previous year.
The country retained 3rd position on the continent and 1st among the East African Community member states.
No resting on laurels However, even with such credentials, the government is not about to get smug about its achievements. As they used to say to winning athletes in ancient Greece, who had been awarded the victor’ s crown of laurel leaves:“ Don’ t rest on your laurels!” People often assume that victory will automatically follow victory, thereby opening themselves up to defeat.
In the recent past, Rwanda has opened up countless business offices abroad in a bid to promote the country as a preferred FDI destination. Turkey, Canada, the UK, the US, South Africa, Singapore and China are some of the countries in which Rwanda is currently managing offices that are primarily charged with luring foreign investors into the country.
However, even as the country rides the current wave of optimism, experts aver that the government also needs to devise strategies that will boost its citizens’ purchasing power, one of the most crucial factors in attracting foreign investors into the country.
One such strategy that Rwanda has put in place so far is the‘ Made in Rwanda’ initiative, which seeks to“ increase the buying of locally made products by raising awareness, enhancing quality standards, and providing clear branding and packaging,” according to the Ministry of Trade and Industry.
The initiative, which was launched in 2014, is expected to boost the local manufacturing sector, particularly the small and medium enterprises( SMEs), and subsequently increase per capita income and purchasing power.
Rwanda’ s target is to raise per capita income from the current $ 644 to $ 1,240 by 2020. This is a target that can only be reached if Rwanda builds on its success story both domestically and abroad – and does not take its victories for granted.
OCTOBER 2016 EDITION- 41