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Rwanda is a country in East Africa. It neighbours the democratic republic of Congo and Uganda. As a country, it has seen immense suffering from the genocide of 1994 to the civil war with the democratic republic of Congo. This took a turn around in the year 2003, when a new constitution was put in place that among many amendments instituted a balance in power and outlawed ethic based violence and hate (Briggs & Booth, 2006). The economic situation in the country improved greatly as result of this milestone. The order in the country saw a boom in investors willing to aids in the continued growth of the country’s economy. The percapita income for the country rose to $1,284 in 2011 from $416 in 1994 during the time of genocide (Prunier, 1995). The country does not have a lot of natural resources and is reliant on farming by the local farmers. The industrial sector does not offer much contributing, only about 14.3% to the country’s GDP (CIA, 2011). The service sector, in contrast, offers up to 43% of the GDP with sectors, such as banking, which is playing a major role in the national economy. The investor would find this very welcome, since Rwanda is a growing country with potential to further itself. The government fully supports the private sector and sees this as an important aspect to the development of its country. It advocates for this both through policy and practice.
Rwanda has been recognized by theWorld Bank as one of the countries with the best reforms and regulations that allow for ease in conducting business. It is for this fact that Rwanda is ranked the fifth by the World Bank in Africa. The establishment of the Rwanda Development Board (RBD) eases the task of foreign investors by helping them obtain necessary documents as provided for within the law. There are no constitutional limits on the foreign ownership or any discriminatory aspects for the investors. Rwanda also ranks high as one of the countries with low corruption standings, as it effectively enforces its zero tolerance on corruption.The legal system in Rwanda continues to grow. As a country commended for its reforms to enable for good investor relations, it has drafted in place a new legislation that allows the improvement of business relations with foreign investors. The country also has newly revised bankruptcy regulations that will go a long way in attracting foreign investment.
Such good deeds are ideal for an investor to open up a branch in Rwanda. The government intervention is only required by law. The government ensures that there is transparency in the tenders it offers. Such a situation will help this financial institution, because the laid down policies that have been in practice. These polices are set effectively, so they are beneficial to both the investor and the country. The economic history of Rwanda was poor, mainly due to the genocide of 1994 that saw the country nearly crumble down. It has taken a lot of hard work, but it is now paying off. Predominantly agricultural, much of the country earns foreign trade from the export of tea and coffee. This has not deterred the growth of the GDP and aided in decreasing the inflation rate to 3.2%.
The level of education in Rwanda has grown over the years. Due to ties with the commonwealth and the East African Community, education is offered in the English language. The literacy levels are high for those, who can read and write. Majority of Rwanda is rural folk. There is a growing trend for the incorporation for ICT in the school curriculum. This initiative has seen ICT skills now being offered from the tertiary levels of learning to the lower levels of learning. Despite the free education for the primary years of school, enrolment to secondary and higher institutions of learning remains low, especially due to the low income rate of the citizens. However, the Government is making strides to ensure that a majority of the population is well versed in reading and writing. Religion and culture play a big role in Rwanda. The majority are Roman Catholic among other religions, such as Protestants, Muslims and African traditional religion (CIA, 2011).
There are various challenges that an investor will encounter in Rwanda. The RBD has come under scrutiny for what has been termed as delays and exploitations. This has at times led to companies incurring loses they did not anticipate. There is the perception that Rwanda is not a safe place to invest. This is largely due to the picture embedded in the world of the genocide attacks. The world remains cautious of this fact even though the country has gone above and beyond to show that they have moved on and is stable. There could be the lack of skilled labour. This will incur extra on the part of the investors as they may be forced to either bring in their own people or train others either way it becomes costly and time consuming (Prunier, 1995).
So, why to invest in Rwanda? The government seeks to achieve its 2020 vision and to enable this; it needs immense foreign investor contribution. Due to its ease in accommodating foreign investment, it becomes so much easier to start and run a business in Rwanda. Investors are protected from seizure, except where public interest is concerned. There is no allotted percentage as to what the investor might hold as equity. There are various sectors that offer for investment opportunities. For this investor who seeks to represent growing businesses, they have a diverse field to choose from such as the agricultural sector, the manufacturing sector, tourism and the information communications sector. Rwanda’s strategic location provides for good access for all these investments. The country provides for a safe environment with a low crime rate. It is peaceful as it has grown form the conflicts, which it faced in the past and formed good relations with its neighbours.
The country’s zero tolerance on corruption stands out from other countries in sub-Saharan Africa that are marred by corruption. In this regard, it advocates for transparency and so is ideal to any investors, especially those, who are cautious not to be involved in dubious transactions and illegal businesses. The country has a stable government with the clear and undeterred focus of achieving its vision 2020. They are also serious on maintaining the reforms that have been passed and implement this through practice. Rwanda has a serene environment that offers ideal climate for a place to live in. it is located on a higher ground and so the climate is very conducive. It has a predictable business environment with access to large markets, such as the COMESA, EU, and the U.S.A. Rwanda offers an abundance of semi-skilled labour that will be convenient to an investor setting up shop in the country. The country enjoys modern transport and telecommunications infrastructure. All in all, Rwanda has an investor friendly attitude (Briggs, 2006).
Rwanda is involved in regional integration efforts. It is one of the pillars of their vision 2020. With the committee on regional integration it is able to plan through how they can coordinate with the different economies in the region. It was for the country’s wellbeing that they are aware of what benefits lay ahead and how effective was their participation towards the realisation of their vision. As a result, Rwanda is part of the East Africa Community (EAC). As a land locked country is relies on the ports of Mombasa in Kenya and that of Dar es Salaam in Tanzania. Rwanda mainly traded with non-African countries. In Africa, since most trade happens within the Common Market for Eastern and Southern African (COMESA) countries, it only made sense for Rwanda to join the EAC. Since the cost of doing business in Rwanda is high, their vehicles and goods tended to delay at the ports, since preference was given to the East African countries.
For Rwanda, joining the EAC meant that equal treatment was developed and it became a land linked country now. It also meant that the integration of the education system, where all these countries could learn for one another. By having a commercial presence, the bank will go a long way in generating revenue for the companies it represents. The good relations that Rwanda has with the rest of East African countries, means easier access to facilities for the investor. The goal for any business is profit making. So, a commercial presence will ensure that the company offers the services and collect on the benefits from this. It will be beneficial to the stakeholders, because as a growing country it is open to a vast array of potential. The country is strong in its reforms on making it possible to have smooth investor relations for the full benefit of its development. The country has untapped resources. With companies, such as Starbucks and JP Morgan, having made a mark in the country, it is only logical that the rest of the financial world follows suit and takes full advantage of this goldmine by changing their mind-set.