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Eleven sectors ready for investment in Rwanda

Updated: Jul 1, 2023



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Rwanda field

There are a number of sectors within Rwanda that merit consideration for investment. Many are already well understood with a good level of investment readiness. Others are emergent and may require longer time-frames to show returns.


The following article is a high level snapshot of eleven sectors in Rwanda that may offer good investment opportunities.


Agriculture


Rwanda’s economy continues to be dependent on agriculture and the sector is responsible for employing 80% of the population and around 33% of GDP. In 2022 it accounted for around 623 Billion RWF. 75% of Rwanda’s agricultural production comes from smallholder farmers and 61% of Rwandan soil is fertile and suitable for agriculture. The main produce is coffee, tea, pyrethrum, beans, flowers, cassava banana, wheat, rice, sugarcane, and animal hides.


New opportunities are emerging in food processing for domestic and international markets. This includes beans, potatoes, peas, egg plants, and pineapples, apples, bananas, avocados and passion fruit. Other things to note with the Rwandan agriculture sect:

  • The agriculture sector has grown from 4.5% to 6% annually and is transitioning from subsistence farming to large scale commercial model;

  • The Government has allocated 13% of the National budget to boost productivity and ensure food security. It has also invested in infrastructure, institutions, markets, and innovation to create an enabling environment for private sector investment;

  • Crop intensification programs have been increased production of food crops and cash crops including maize, potatoes, wheat, beans, peas, cassava and soya;

  • Agricultural production and processing facilities are in high demand to support the transition from labour intensive farming to large scale production;

  • Other investment opportunities also exist in related areas such seeds, fertilizer, pesticides, crop processing, farm equipment, dairy, poultry, meat processing, horticulture, aquaculture, mechanization, crop sourcing, and agro-tourism.


Education sector


The Government of Rwanda is seeking to transform the country into a middle income country by 2035 and a high income country by 2050. To achieve this objective, Rwanda will need to make considerable investment in its people to build knowledge, skills, and expertise to compete in the international labor market. This will be primarily achieved through development of the education system.


The Rwandan education system includes four levels (1) Pre-primary (2) Primary (3) Secondary (4) Higher Education. There are opportunities for international investment in all levels of education in Rwanda.


Health services


Rwanda has become internationally recognized for its provision of universal access to healthcare. Over 84% of Rwandans are now ‘insured’ and have access to primary care. Rwanda has a decentralized healthcare public service system that includes over 1700 health posts, 500 health centers, 42 district hospitals, and five national hospitals. Since 2021 at least 21 second-generation health posts have been either created or upgraded with services such as maternity, laboratory, dental care, and ophthalmology. The health workforce is supported through one public medical college producing general practitioners.


As part of the growth of the health sector, Rwanda also has an emerging private health sector, which includes two general hospitals, two specialist eye hospitals, 50+ clinics, eight dental clinics and 134 dispensaries.


Investment opportunities may exist at many aspects of the Rwandan health care sector from workforce development/education, facilities, equipment, specialist skills to the likes of medical tourism.



Property development – residential and commercial


The general growth of the Rwandan economy has created significant demand for property in most categories. The real estate sector amounted to 647 Billion RWF in 2019 and grew by 4%, because of sustained expansion in public and private construction. Notably for the sector:

  • Rwanda needs an estimated 5.5 million dwellings by 2050 (which amounts to around 150,000 dwelling units to be constructed annually). This will include replacing and upgrading existing settlements, densifying existing centers as well as greenfield development;

  • The Kigali City Master plan that provides the vision and guidelines for specific planning at the Kigali District and the Central Business District levels. It outlines an advanced approach to sustainability, infrastructure, environment, and its integration with society and the economy;

  • Rwanda has designated six secondary cities (Rusizi, Rubavu, Musanze, Huye, Muhanga, Nyagatare) as priority areas for growth and economic development. These secondary cities offer opportunities in real estate (as well as infrastructure development, manufacturing and agro-processing);

  • Numerous infrastructure projects are planned or underway including the likes of the Green city project, Rusizi Hydropower Plant, Bugesera International Airport, Kigali Central Sewerage, Lake Kivu Methane Gas Project, and Base Rukomo Nyagatare Road project;

  • There are specific opportunities around the financing of property investment for both the individual/household and corporate sectors;

  • The development of an end to end construction sector including materials, building methodology etc particularly to enable building of affordable housing;

  • Housing provided for vulnerable persons – no recent figures are available however from 2017 to 2018 over 3,400 houses were constructed.


Tourism


Tourism remains a key sector for the Rwandan economy and an important source of foreign exchange. Tourist arrivals to Rwanda increased from 980,000 in 2008 to 1.6 million in 2019 and equated to around 6.1% of GDP. Tourism was worth around US$ 445 million in 2022.


Nature-based tourism has been the primary source of growth for Rwanda with its unique offerings. This includes the Mountain Gorillas and other primate species, a variety of bird species, game reserves, its equatorial forest, and the Nile river.


Rwanda have sought to make itself tourist friendly with a single tourist visa for the three EAC countries (Uganda, Kenya, Rwanda). Accommodation options are improving with a number of international brand hotels have establishing themselves in Rwanda such as the Marriot, Sheraton, Raddison blue, Park Inn by Raddison, Protea, Golden Tulip and Zinc.


Rwanda is seeking to promote its profile as a regional and international conferences provider with new convention centers. It is also enabling this sub-sector with easier travel and immigration procedures (online visa applications, visa-at-gate policy for Africans and tourist visa policy for EAC)


Air connections to Rwanda are increasing with growth of RwandAir and other airlines such as KLM, Qatar Airways, Turkish Airlines, and Kenya Airways.


Investment opportunities may exist in a number of areas within the tourism sector including:

  • Boutique accommodation for differing levels of the tourist market (basic to luxury);

  • Hospitality, restaurant/café and related services;

  • Commercial/business tourism – with Rwanda rated highly with MICE (Meetings, Incentives, Conferences & Exhibitions);

  • Art, cultural, and culinary tourism offerings;

  • The general diversification of tourism offerings from water parks, artificial beaches, theme parks, outdoor activity centers, mountain/BMX/dirt bike facilities; rally car races etc;

  • Leisure facilities for the local and tourist market such as swimming pools and facilities for tennis, squash, badminton, table tennis, and basketball etc;

  • Medical tourism; and

  • Specific projects like the Kigali cultural village and Kivu Belt projects


Digital/ICT


Rwanda is promoting a progressive digital/ICT sector as part of a strategy to become a central African ‘tech hub’ that provides world class ICT infrastructure, products and services. The National Information Communication Policy (NICI) outlines the steps being taken to achieve this. This strategy has included laying fibre optic broadband cables across the country and the Kigali Innovation City (with investment of US$ 1.9 billion). Also included as part of the strategy are universities, international financial services companies, data centers, and business continuity centers. An innovative startup culture is also being nurtured within Kigali.


Government investment in digital/ICT has included:

  • 4500Km+ of Fiber optic broadband cabling laid throughout the country connecting all the thirty districts and with nine regional links;

  • 10 GbPs of broadband capacity;

  • Connection of the 4GLTE network;

  • mobile penetration of upwards of 76 % with over 8.5 million subscribers;

  • Internet penetration of 33% across the country.

Investment opportunities are available at most levels of the sector from infrastructure, hardware and software development to the services sector and specialised areas such as cyber security and AI. This includes investment from large scale established investors to startups.


Infrastructure


Rwanda’s rapid growth has been underpinned by its investment in infrastructure and around 10% of the Rwanda’s annual budget is committed to transport and other infrastructure investment.


Infrastructure projects planned or underway include the likes of the Green city project, Rusizi Hydropower Plant, Bugesera International Airport, Kigali Central Sewerage, Lake Kivu Methane Gas Project, and Base Rukomo Nyagatare Road project.


Mining


The mining sector is the second largest export earner for the Rwandan economy. The sector generated an average of around 29.74 RWF Billion (2006 – 2022), and a high of 56 RWF Billion in 2018. The Rwandan government is seeking to increase the sector’s contribution to GDP to over 5.7% and significantly increase the jobs created in the sector.


Rwandas mining sector offers investment opportunities in a variety of areas including:

  • Rwandan minerals processed including tin, coltan, tantalum and tungsten, gold with further exploration works possible to identify new repositories;

  • Industrial minerals including silica sands, talcum, limestone, kaolin, vermiculite, diatomite, clay, rocks, gypsum and pozzolan;

  • Gemstones including beryl (aquamarine), corundum;

  • The ongoing upgrade and modernisation of mining technology including the establishment of ore smelting and processing plants.



Energy


As a rapidly growing economy, Rwandas demand for energy has increased also. To date, Rwanda’s energy sector has been primarily biomass (wood energy) and accounts for around 85%. In 2018 The total installed power generation capacity was estimated to be 186 MW with an electricity connectivity rate of 24.5% (23% on-grid and 1.5% off-grid).


The Rwandan government was planning to increase power generation capacity to 563 MW and achieve 70% access to electricity by 2017/2018, but this has not been achieved with only 276 MW of grid power achieved in 2022. Likewise, government efforts to reduce dependence upon biomass (from 85% currently to 50% by 2020), has had limited success. Alternatives that could argument the market and have been promoted by the government include biogas, pellets, briquettes and LPG.

Rwandas commitment to the diversification of energy sources and the phasing out of heavy/fossil-fuel electricity generation hence present opportunities for new investment in the energy sector.


Manufacturing


The manufacturing sector in Rwanda is small but grew by 8% in 2017/18 (NISR Annual Economic Report, 2019) and 4.40 percent in March of 2023. Rwanda was aiming for it to increase its contribution to GDP to 26% by 2020 and as at the third quarter of 2022 it had risen to around 234 RWF Billion (US $205 Million).


The National Strategy for Transformation (NST1) 2017-2024 outlines Rwanda’s industrial policy and manufacturing is a key focus. Other notable initiatives to support manufacturing include the National Industrial Policy (2011); Made in Rwanda policy; Entrepreneurship Development Policy (EDP); Special Economic Zone (SEZ) policy; the Domestic Market Recapturing Strategy (DMRS); National Export Strategy, and Small Medium Enterprise (SMEs) strategy.


Special Economic Zones have now been created with nine industrial parks in Bugesera, Muhanga Rwamagana, Musanze, Huye, Nyagatare, Nyabihu, Rusizi, and Kicukiro.


Specific areas for investment in manufacturing include:

  • Fast-moving consumer goods (FMCG) including detergents, cosmetics, body care products, paper tissues, plastic goods, papers, footwear, chemicals, beverages, textiles, and leather goods;

  • Construction materials such as granite tiles, cement, roofing sheets and tiles etc;

  • Electronic, automotive, and household goods manufacture including phones, computers, vehicle-assembly, furniture, and appliances;

  • Glass manufacturing. Rwanda has significant deposits of key raw materials required for float glass manufacture (float glass is used for making glass windows). There are also opportunities to establish a glass container factory that could serve the beverage industry with bottles and other glass products. Architectural and float glass are in high demand due to the rapid increased in building and construction activity;

  • Pharmaceuticals. While Rwanda has a good basic health care system there is an increasing demand for pharmaceutical drugs. This was accentuated by the COVID-19 pandemic and there are opportunities to create both generic pharmaceutical products and new to establish products as part of public-private partnerships.



Banking and finance


Rwanda is seeking to become a financial hub in central Africa. To this end, Rwanda has established the Kigali International Financial Centre (KIFC) which is focused upon establishing Rwanda as a preferential financial jurisdiction for investment and to assist with reform of the domestic industry. A number of international and regional commercial banks have now established a presence in Rwanda.


Sub-sectors that Rwanda are seeking to promote include:

  • Private equity funds;

  • Asset management;

  • Investment banking services;

  • Insurance schemes;

  • Venture capital and mutual funds;

  • Mortgage and agricultural banks; and

  • Brokerage activities (Local Stock Exchange).


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Last updated: May 2023

George James Consulting.


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