Investment climate in any country evolves as society does. Since the 1994 Genocide against the Tutsi, Rwanda has toiled hard to make its investment climate as favourable as possible. It’s not a single factor that determines the typology of an investment climate, but rather an amalgamation of interacting factors.

For investment climate to be relevant and effective, investment laws have to keep pace with national, regional and global trends to which they apply. Of course investment laws are not necessarily the most important laws in Rwanda, nor are they high in the hierarchy of laws within a national legal framework.

But investment laws play a pivotal role in turning investment climate around or less attractive. So why give importance to investment laws? From an economic development point of view, investment laws carry their importance on two levels.

First, they contribute to the quality and characteristics of investment climate because they are part of the development and expression of a national investment and policy package. In other words, they are focal point for the expression of authorities’ expectations from, and treatment of, investors.

For example, today, Rwanda has a new law relating to investment and facilitation as well as an investment policy.

If you read them, they are clear on focal areas of investment, rights of investors, and facilitations.

So, the investment law, which reflects investment policy, shows that the government is welcoming investment.

In order to make its investment climate more attractive Rwanda has revamped macroeconomic policy framework, such as trade policy, taxation, foreign exchange, land and labour; political atmosphere and governance; government administration and management of the regulatory process related to commercial activities; legal and judicial frameworks and their ability to properly settle disputes (e.g. use of arbitration or ordinary courts of laws), and enforce contracts; and the quality of both the physical infrastructure –power, transportation, and water – and institutional infrastructure educational and banking systems and civil society organizations.

However, Rwanda needs to make sure that each component works well and that together they form a coherent system that will attract more investments, domestic and foreign, while preserving legitimate national interests.

A well-designed investment policy is the centerpiece of investment climate. The current investment law and other investment-related laws must reflect the investment policy. In fact, investment law is the legislative instrument for implementing the national investment policy.

Having in place an investment law without investment policy is like putting the cart before the horse. It’s the underlying policy that gives guidance to the investment law. If policy doesn’t exist, investment climate may seem utterly haphazard.

Besides, it is important to understand that investment climate, investment policy and investment law are inseparable notions in one package. The relationship between the three is what determines a conducive investment policy.

Of course, that can only be achieved when those three notions are carefully thought-out. Arguably, investment law is the key tool for implementing an investment policy, while investment policy is the core element of the country’s investment climate.

A recent amendment of the investment code shows that Rwanda has taken a more liberal investment policy approach to make its investment climate more attractive.

Indeed, the purpose of a liberal approach is to promote inward investment (by nationals and foreigners) that supports sustainable development, as core issue of Sustainable Development Goals (SDGs).

Additionally, Rwanda has gone an extra mile whereby a bill on Public-Private Partnerships (PPPs) was recently tabled before the Parliament, and, if adopted, will add a vital ingredient to the country’s investment climate.

In general, PPPs refer to forms of cooperation between public authorities and the business world which aim to ensure that funding, construction, renovation, management and maintenance of an infrastructure of the provision of a service.

On several occasions, government and private entities engaged in PPPs but without a clear legal framework. So, once the Bill on PPPs is enacted into Law, it will provide the legal framework concerning establishment, implementation, and management.

Both investment policy and the investment law answer fundamental questions, such as who can invest in the country, where, and under what conditions. Another important component in a conducive investment climate is provision of incentives.

Investment incentives refer to measureable economic advantages that governments offer to enterprises or groups of enterprises, with the goal of steering investment into favoured sectors or regions or influencing the character of such investments.

The new investment law enunciates some of incentives that are regulatory, financial, or fiscal, and it should be noted that some regulatory and financial investment incentives have a fiscal aspect while others do not.

Furthermore, the new investment law guarantees fair and equitable treatment of all investors against discrimination. And where such discrimination is claimed, the law provides judicial recourse.

The national treatment standard seeks to ensure a degree of competitive equality between national and foreign investors. A host country must extend to foreign investors treatment that is at least as favourable as the treatment it accords to national investors in similar circumstances.

That is, the state treats foreign and domestic investments alike and shall not discriminate against foreign investors.

Rwanda Development Board (RDB) is at the forefront of ensuring that all factors promoting a conducive investment climate are in place.

The writer is a lecturer and international law expert.