Rwanda’s economy has grown at a steady rate of around 10% annually for the last two decades. According to the World Bank, the country’s gross domestic product has moved from US$8 billion in 2017 to $10 billion in 2019. This impeccable growth has made Rwanda one of the most attractive places to start a business.
According to the World Economic Forum one of the fastest growing economies in Central Africa, Rwanda notched up GDP growth of around 8% per year between 2001 and 2014. The International Monetary Fund expects the economy to slow down this year and pick up in 2018, forecasting around 6% growth in 2016 compared with 6.9% last year.
It is easy to register a business in Rwanda. You do not even need to register a business in Rwanda, you can register while still in your country. After just 24 hours, you can go to Rwanda to do business and earn money. Once you have registered your business, the residence permit will take approximately three days (depending on which country you are coming from). You can own land in Rwanda, even if you are not a citizen. You can buy or lease from a private owner. For the African diaspora, this is huge. If you want to be the sole owner of the company, 100% of your shares and profits belong to you. There is no need to share it with local partners like the laws of many other African countries. And you can send money abroad in the form of U.S. dollars at any time. Another important fact that cannot be taken for granted on the African continent.
Some of the common businesses that are opening shop in Rwanda include Grocery Store, Transportation, Hotel, A barbershop, Restaurant, Internet shop, Diesel company, A coffee shop, Online tutorial, Food delivery services, Car spare parts shop, Bars and clubs, a studio, Space rentals, Travel and tours company, Agribusiness exports, Agriculture industry, tailoring shop, Construction firm, and Real estate.
At a large-scale perspective, existing foreign direct investment is concentrated in sectors such as mining, tourism, and commercial establishments. Foreign direct investment is concentrated in various industries such as mining, hotels, and coffee. The country’s social security regulations and minimum wage are in force.
Rwanda was ranked 42nd in 2016 as to do business in Africa. According to the Global Entrepreneurship Index, it is the second-best country in Africa to start a business. According to a study conducted by political scientists at the University of Oxford, economic growth in Africa may be slower than the official figures suggest. The researchers noted that the average consumption per household remained flat from 2000 to 2013.
Currently around 83% of Rwanda’s population of 10.5 million live in rural areas and more than 70% of the population still work in subsistence farming. But the government, led by President Paul Kagame, wants to change this. In the long term, the government aims to transform Rwanda from a low-income agriculture-based economy to a knowledge-based, service-oriented economy with a middle-income status by 2020.
Evident progress is being made by Rwanda, in moving it from a farming to a knowledge economy. Rwanda has invested in the Space industry in recent years. Rwanda’s launch of global satellite aims at building the local space industry, build local capacity, inspire the younger generation and prepare to usher Rwanda into a hyper-connected future. This second launch of thirty-four (34) satellites will rapidly grow one web installation of 684 satellites by end of 2021.
This is a game changer in that, just the change in speed of internet connection creates new industries, that even improve the traditional ones. For example, Rwandan farmers can now use drone technology to improve farming. Farm to Market is made easier and better because of this technological move.
Rwanda is primarily an agricultural economy, and it is there that opportunity lies for new businesses – investing in the value chain of Agriculture in Rwanda.
In 2019 agriculture accounted for 29% of the economy of Rwanda. Products such as bananas, pineapples, tea, coffee, and tobacco are high-value, export-oriented products.
In the same year, Rwanda produced 2.6 million tons of banana; 1.2 million tonnes of sweet potato; 1.1 million tons of cassava; 973 thousand tons of potato; 484 thousand tons of beans; 421 thousand tons of corn; 256 thousand tons of pumpkin; 171 thousand tons of taro; 159 thousand tons of sorghum; 131 thousand tons of rice; 114 thousand tons of sugarcane; 105 thousand tons of tomato; 36 thousand tons of pineapple; 31 thousand tons of tea; 29 thousand tons of coffee; and 5.4 thousand tons of tobacco.
The main export markets are China, Germany and the United States. The economy is managed by the Central National Bank of Rwanda and the currency is Rwanda francs; in June 2010, the exchange rate of the U.S. dollar to the U.S. dollar was 588 francs. Rwanda joined the East African Community in 2007 and has plans to formulate a common shilling for East Africa.
The agricultural animals raised in Rwanda include cows, goats, sheep, pigs, chickens and rabbits, and the number of each animal is different. Although there are some intensive dairy farms near Kigali, the production system is mostly traditional.
More opportunities lie in Manufacturing in Rwanda. Currently, Rwandan manufacturing is dominated by the production of alternative imports for domestic consumption. Large companies produce beer, soft drinks, tobacco, mulberry, handcarts, soaps, mattresses, plastic pipes, roofs and bottled water. Other products manufactured include agricultural small beverages, soaps, furniture, shoes, cement, plastic products, textiles, and tobacco.
Some of the reasons for starting a business or investing in Rwanda include Active Government, Efficient Workforce, low Crime Rate, and regional strategic location.
The country is known for its ambition to develop its economy in a short period of time. From one perspective, the country’s urbanization position accounts for 17%, and its goal is to increase and reach 35%. It may seem ambitious, but the country’s commercial institutions are an important factor in the realization of this ambition.
One of the reasons for investing in Rwanda is its well-organized and efficient employees when conducting business. Hiring them as your employees in the company will help you and your business grow in Rwanda. Rwandans are also very hardworking and strategic. They have the initiative to help you earn more money while reducing the cost of building a business. If your organization is clear, establishing a business in Rwanda will be beneficial. This means you have the best, effective and hardworking workforce.
When looking for a place to establish a business, one of the issues to consider is security. Surprisingly, the crime rate in Rwanda is very low. On the entire African continent, the country has the lowest crime and corruption rates. Rwandans are very trustworthy. He will not worry about doing business with them. On the other hand, one thing that may concern you is the frequency of policy changes in this country. In fact, the country has made around 80 policy changes over the years. However, they are not easy to adapt.
The size of the Rwandan market may be a bit small. However, it has a strategic regional position throughout the continent. This means that local and international business companies can easily reach locations in the country. Many international companies have confirmed that the country has great security in terms of access and market opportunities outside the continent. In addition, its capital, Kigali, has a new railway that connects these towns with different ports on the continent. This opens up many business opportunities for local and international markets.
Source: World Bank, WEF, Jump Start, Launch Pad
