An incentive programme rolled out by the government in 2021 aimed at driving economic recovery has generated investments worth an estimated $1.2bn and attracted 78 investor applications, Statistics from the Rwanda Development Board (RDB) show.
The incentive programme dubbed ‘Manufacture and Build to Recover’ programme was approved by cabinet in December 2020 and rolled out in 2021. It was introduced to help the economy recover from the effects of Covid-19.
The programme extended tax breaks and tax credits to businesses with an aim to reduce cost of investment for new manufacturers as well as those seeking to expand existing operations.
While the initiative had a target of leading to about $1 billion worth of investments, data from RDB shows that when complete, they will have surpassed the target by about $200m and is expected to create 27,394 direct and indirect jobs.
The programme was tailored to boost economic recovery efforts with specific incentives for the manufacturing, construction and real estate development sectors.
These sectors were selected given their high potential for increasing private investments, generating export revenues and creating productive jobs.
Firms and investments benefiting from the programme are expected to purchase all incentivized materials by December 2022 with implementation of projects expected to be complete by December 2023.
According to Louise Kanyonga, Chief Strategy and Compliance Officer at RDB, they received 78 applications from different companies in the agro-processing, construction and manufacturing sectors and a total of 64 projects approved. Of the selected firms, 17 were in agro-processing, 24 in construction and 23 in manufacturing.
Some of the investments have already kicked off such as Norrsken Rwanda Ltd, East African Bamboo and Landmark (Koza) with others getting ready for rollout.
Kanyonga said that they have constituted a dedicated committee, composed of key government institutions coordinated by RDB and Ministry of Finance and Economic Planning tasked with closely following up on the program.
“The committee meets bi-weekly (every two weeks) to review new projects, assess performance of existing beneficiaries and unblock constraints that could prevent firms from implementing their projects on time,” she said.
The selection of priority sectors considered agro-processing which includes adding value to agriculture produce, and construction materials.
Light manufacturing includes light consumer goods such as soaps, toiletries among others. Construction officials say it was selected for its role in acting as a driver of jobs and other sectors. The sectors were said to have multiplier effects.
“We are looking at it from the perspective of catalyzing other sectors of the economy as well as stabilizing trade balance because there are so many products that we are importing that could be produced locally,” RDB officials had said at the launch of the programme.
This was geared at reducing the need for traders to seek dollars for them to import products that could be produced locally, consequently reducing the pressure and demand on the dollar and consequently curbing depreciation.
For construction either for affordable housing, high-end or commercial complex, projects were required to be valued at a minimum of $10 million, and if a firm was setting up a new manufacturing industry/plant, the threshold is to invest at least $1 million and at least $100,000 in the agro-processing.
There was also a component of already existing and registered companies seeking to expand operations, the programme had a threshold of at least 20 per cent of your total investment or at least $1 million.