Newsroom > Blog
Browse more
Rwanda, a Rising Star in Africa's Economic Landscape
By Antony Maina | Thu Jun 15 2023
Exploring Rwanda's startup ecosystem
Rwanda, the land of a thousand hills, is a vibrant nation with a population exceeding 13 million people and an estimated GDP of $32 billion (in purchasing power parity terms) as of the end of 2022. Rwanda has been recognized for its efforts in promoting gender equality and has made considerable strides in creating a favorable business environment.
In 2023, Renew Capital officially launched operations in Rwanda, a step that strengthens our commitment to investing in growth-oriented businesses across Africa. In this blog we explore the country’s entrepreneurial landscape, thriving sectors and development strategies.
Rwanda, the land of a thousand hills, is a vibrant nation with a population exceeding 13 million people and an estimated GDP of $32 billion (in purchasing power parity terms) as of the end of 2022. Rwanda has been recognized for its efforts in promoting gender equality and has made considerable strides in creating a favorable business environment.
In 2023, Renew Capital officially launched operations in Rwanda, a step that strengthens our commitment to investing in growth-oriented businesses across Africa. In this blog we explore the country’s entrepreneurial landscape, thriving sectors and development strategies.
Ease of Doing Business
The World Bank's "Ease of Doing Business” report ranked Rwanda 29th in 2019 and 38th in 2020 out of 190 economies worldwide. According to the Rwanda Development Board, the reforms captured and reflected in these four indicators strongly impacted its regulatory business environment.
- Starting a business: Rwanda has made it easy for people to start a business by offering newly formed SMEs a two-year trading license tax exemption.
- Building permits: Rwanda's ranking in the domain of construction permits experienced a notable jump of 25 points, advancing from 106th position in 2019 to 81st globally in 2020 thanks to the accelerated process for acquiring water and sewage connections and the enhancement of building quality control through a mandatory liability insurance requirement for all construction professionals.
- Electricity supply: The upgrading of Rwanda’s power grid infrastructure has increased the dependability of the country’s electricity supply. This has resulted in an improvement in Rwanda's ranking from 68th to 59th worldwide.
- Contract enforcement: The most remarkable progress was observed in the enforcement of contracts, with Rwanda leaping from the 78th to 32nd place globally. This jump was largely attributed to the introduction of a new small claims procedure and a reduction in court fees.
Other additional investment benefits offered by the government include:
- Free business registration
- Highly digitalized and efficient administration (only six hours to register a business)
- One-stop center for investors with dedicated investment acceleration and aftercare team
- No restrictions on foreign ownership
- No restrictions on capital flows
- Capital gains exemption on sale or transfer of shares
Economic Landscape
Rwanda's investment climate is one of the most attractive in Africa. The Rwanda Development Board (RDB) is playing a significant role in attracting and facilitating investment. RDB's key services include one-stop center services (business and investment registration, visa facilitation, tax incentives management, etc.), investment promotion, investment deals negotiation, tourism and conservation and private sector skills development.
Rwanda's investment climate is one of the most attractive in Africa. The Rwanda Development Board (RDB) is playing a significant role in attracting and facilitating investment. RDB's key services include one-stop center services (business and investment registration, visa facilitation, tax incentives management, etc.), investment promotion, investment deals negotiation, tourism and conservation and private sector skills development.
Rwanda's Vision 2050 is the country’s long-term development strategy which seeks to transform the country into a knowledge-based, high-income country by 2050. This strategy offers various investment opportunities in sectors such as education, technology, infrastructure and health. Rwanda has made significant progress toward achieving its Vision 2050 goals, and the country is now considered to be one of the fastest-growing economies in Africa.
Major Sectors in Rwanda
Major Sectors in Rwanda
The manufacturing sector in Rwanda is still small but steadily growing at an annual rate of 7%.
Rwanda's strategic position aids cross-border trade, particularly within East and Central Africa's estimated 268 million population. This has led to increased trade volumes. Key exports include beverages, dairy products, processed food and construction materials.
Rwanda's strategic position aids cross-border trade, particularly within East and Central Africa's estimated 268 million population. This has led to increased trade volumes. Key exports include beverages, dairy products, processed food and construction materials.
Agriculture is the primary occupation for 70% of Rwanda's inhabitants. The agricultural sector accounts for 29% of Rwanda's GDP. Limited availability of farmland has prompted the nation to prioritize the enhancement of crop productivity, focusing on high-yield produce like maize, potatoes, wheat, beans, peas, cassava and soya.
Rwanda has implemented the ICT for Rwanda Agriculture policy (ICT4RAg), with the aim to stimulate cooperation between ICT and agricultural sectors. This collaboration seeks to develop solutions in areas such as weather forecasting, pest and disease management, storage infrastructure, market accessibility, soil health and nutrient analysis, teaching innovative farming techniques, facilitating funding and credit services, and controlling pollution.
Gender Equality
Rwanda stands out globally for its efforts in advancing gender equality and women’s empowerment, particularly in political participation. The parliamentary elections in September 2018 saw women fill 61% of seats. The proportion of women members of parliament is at 61.25% today, way above the current global average of 26.4%.
Internet Penetration
Mining Sector
Rwanda's primary mineral exports include tin, tantalum, tungsten ores, as well as some gold and gemstones. The sector offers opportunities in ore processing and diversification. In 2015, mining generated $149 million in foreign exchange.
Electricity Access
Rwanda has achieved one of the world's fastest rates of population electrification, increasing from 6% in 2009 to about 54% in March 2020. Globally, Rwanda's electrification progress from 2010-2016 ranked 11th, and third in Africa.
Entrepreneurial Growth
Rwanda has made great strides in entrepreneurship, with a significant number of startups being launched in the country. The country has put in place strong institutions, a strong judicial system and enacted economic transformation strategies. The ecosystem of enterprise support providers is growing fast, marked by new openings of coworking spaces, incubators, accelerators, universities and youth entrepreneurship programs. The central stakeholders in the innovation ecosystem are primarily putting their efforts toward entrepreneurship education, SME finance and networking opportunities.
Rwanda's robust economic growth, ease of doing business, commitment to development strategies and gender equality are among the reasons Renew Capital has opened its doors in Rwanda. As the country continues to make strides toward its Vision 2050, opportunities will continue to expand.
At Renew Capital, we're passionate about nurturing growth-oriented businesses. Visit our companies page to learn more.
At Renew Capital, we're passionate about nurturing growth-oriented businesses. Visit our companies page to learn more.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
Related Posts
