The World Bank launched its revamped business and investment climate survey of 50 economies, with Rwanda taking a top spot in Africa in three categories meant to avoid the problems that led it to scrap the "Doing Business” rankings in 2021.
The new report now covers three main measures of a country's business climate – the quality of regulations, effectiveness of public services such as electricity and tax administration, and operational efficiencies.
Rwanda scores highly both in Africa and globally. The country achieved the third spot globally, scoring 81.31 in operational efficiency. It also achieved the eighth spot globally with a score of 67.37 in public services, and a 17th spot globally in regulatory framework.
This position reflects Rwanda’s sustained drive to enhance the business environment and foster a climate in which investors feel welcome. This is not heresy. Rwanda has seen investment levels continue to rise over the years.
Take for instance, Rwanda registered 513 projects worth $2.47 billion (approximately Rwf3.1 trillion) in investments in 2023, a 50 per cent increase compared to $1.6 billion recorded in 2022.
These investment commitments were registered in sectors that drive the country’s economic growth – real estate sector, manufacturing, arts entertainment, recreation, accommodation and food service, construction, agriculture, forestry and fishing, and agro-processing, among others.
This is in part due to programmes such as Manufacture and Build to Recover programme, which provides special incentives for companies investing in the manufacturing, agro-processing and construction (real estate).
These investments are just a drop in the ocean given Rwanda’s aspirations. The country wants to double its current investment in the next seven years.
The country also needs at least $3.4 billion annually for critical investments in structural transformation that would see the country achieving higher productivity and become a knowledge-based economy, according to the African Development Bank.
The World Bank’s latest report is a testament that Rwanda is a good place to do business. It should serve as a template for which the country could use to showcase investment opportunities that will transform the economy.
Still, that’s not enough. Rwanda must work to design a package of incentives that will not only serve good for investors, but also enable the country to raise much-needed revenues without burdening taxpayers.