Investments in construction, real estate, and manufacturing sectors are leading the path to economic recovery in Rwanda as the country seeks to reverse the negative effect of the coronavirus pandemic.
The country recorded investments worth $3.7 billion in 2021 up from $1.3 billion in 2020.
The sectors contributed up to 72 percent of all investments registered, with construction accounting for 31 percent, Real Estate 26 percent, and manufacturing (including agro-processing) contributing 15 percent, according to Rwanda Development Board (RDB) numbers released this week.
As the pandemic took hold in the country from early 2020, many large and small investors injected their capital into construction, with most of these investments in Kigali, leaving the city with a number of new commercial buildings, real estate, and office buildings.
When the country went into lockdowns to slow the spread of Covid-19 and business was rendered inactive, many of the people who owned commercial buildings used this time to renovate, expand or remodel their buildings.
The majority used their savings while others took loans to invest in these developments, which has not only created jobs but also kept the economy afloat as money exchanged hands in purchasing construction materials, many of which are sourced locally.
The development trend accelerated in 2021 as the pandemic thawed and business supply chains began to recover.
The growth of investments in real estate and manufacturing sectors is attributed to the Manufacture and Build to Recover programme that provides tax incentives to investors, complemented by fiscal and non-fiscal incentives.
Some of the biggest investments registered in 2021 include $237.9 million by Ultimate Developers Ltd for the development of Vision City Phase Two; $145.9 million investment by Rwanda Ultimate Golf Course Ltd into the Kigali Golf Resort and Villa Project; $20.7 million powdered milk project, and $22.5 million by Global Electric Vehicle Ltd to manufacture Electric Vehicles, according to RDB.
Other sectors that attracted significant investment are financial and insurance services, agriculture, accommodation and food services, energy, health, and ICT, which point to how attractive the Rwandan economy remained to investors despite the virus-induced setbacks.
In what is regarded as the highest investment registration to date, these new investment projects are expected to create 48,669 jobs - representing a 97 percent increase from 2020.
Government has a target of creating 214,000 new jobs from investments and other employment sources every year.
Despite tourism being one of the most affected sectors in the last two years, to a certain extent, the sector seems to have benefited from the Rwf100 billion ($97.6 million) Economic Recovery Fund.
Tourism revenues are reported to have increased by 25 percent in 2021, from $131 million in 2020 to $164 million in 2021, with the MICE sector generating $12.5 million in 2021 compared to $5.4 million in 2020.
Total visitor arrivals increased by 2.8 percent, from 490,000 in 2020 to 512,000 in 2021, with the sports events hosted during this period boosting visitor arrivals and revenues.
Clare Akamanzi, the chief executive of RDB, said achieving this feat against the odds of the pandemic that has negatively impacted the world economy is a sign of continued investor confidence in Rwanda by both local and foreign investors.
“The 2021 performance demonstrates the gains of our economic recovery efforts. In investment registration, not only have we surpassed our pre-pandemic figures, but we also registered the highest investment registration to date,” she said.
And as the world economy continues to open up, “we are optimistic that we will register more growth in tourism, exports, and other critical sectors this year. We are committed to ensuring that Rwanda remains one of the most competitive economies in Africa and the world.”
Receipts from the export of goods and services increased by 9.4 percent from $1.9 billion in 2020 to $2.1 billion in 2021. This growth is attributed to the gradual opening of international supply chains in 2021.
More than 5,000 people are reported to have been trained to bridge the skills gap in priority sectors such as information technology, data science, engineering, tourism, and cross-border E-commerce.
Under the employment programme, more than 1,400 fresh graduates were supported to perform professional internships in private and public institutions.
In partnership with the Business Development Fund, over 1,000 Micro, Small, and Medium Enterprises (MSMEs) were supported with guarantees to access financing in different financial institutions.
The growth trajectory is expected to continue in 2022, aided mainly by manufacturing and construction investments, regional and international trade, and anchor projects such as the Kigali Innovation City, the Bugesera International Airport as well as other big government and private infrastructure projects.