Total foreign direct investment (FDI) is expected to hit Rwf478.3 billion this year, amid revelations registered businesses may have failed to take off.

It was revealed during the recent review of the investment code that the actual investments are below the number of projects registered.

In was noted that most of the projects failed to take off as a result of inadequate finance.

It is projected that both local and foreign investments to be registered this year will hit Rwf499.2 billion compared with last year’s Rwf374.2 billion. However, Rwf221.8 billion was realised from FDI last year.

According to the Foreign Private Capital report that was carried out last year and launched last week, FDI increased from the Rwf60 billion recorded in 2009 to over Rwf150 billion in 2010.

“This report follows investments to the ground and sees what actually was invested against what was promised,” said Claire Akamanzi acting chief executive officer of Rwanda Development Board (RDB).

Private investment flows reached Rwf477 billion in the first half of this year up from Rwf220 billion in the same period last year, the report added.

Ms Akamanzi attributed the increase in FDI to attractive sectors such as telecom industry that saw Tigo Rwanda launch its operations in the country. Other attractive sectors are finance and insurance, banking and mining.

Incentives extended to foreign investors also account for the increase in the foreign capital inflows.

Foreign investors are exempted from import duties and sales taxes on imports of plant, machinery and equipment and taxable income of 50 per cent of training, research and product development costs.

According to the report, in 2010, debt capital inflows and stocks originated mainly from Mauritius, Luxembourg and Kenya.

Several Kenyan companies, among them Equity Bank and Nakumatt Supermarkets, have invested in the country.

“Most of capital coming to Rwanda comes from Mauritius and Luxembourg because they have developed themselves as a financial hubs; companies go there to access financial services. It is not necessarily true that most investments come from there,” said Ms Akamanzi.

Sanjiv Anand, the managing director of Rwanda Commercial Bank, said that investors should embrace the growing banking sector to expand their operations.

“Interest rates in Rwanda are the lowest in the region, which should attract investors,” said Mr Anand.