Clare Akamanzi, deputy CEO at the Rwanda Development Board, spoke to The Rwanda Focus about the efforts to further improve the business environment.
The Doing Business survey does not cover all the aspects related to investment climate but looks at aspects such as the procedures involved, costs and time taken for businesses to access certain services. It also takes into account the legal framework that facilitates the business community to easily access these services.
Despite the good ranking, the business community is still fretting over issues such as infrastructure, access to credit, and reduced costs of utilities, which cannot be solved overnight. “We are trying to look at the issue from an investment point of view by seeking out ways of improving on the real issues that affect the business community,” Clare Akamanzi, the deputy CEO charged with business development and services at Rwanda Development Board (RDB), told The Rwanda Focus.
Currently the National Bank is working on creating a credit reference bureau which will ease tracking someone’s credit record. However, the bureau will not influence banks’ terms for issuing credit such as interest rates and collateral.
Another sore point are telecommunications and electricity costs, which are the highest in the region and constitute an impediment especially for the manufacturing sector. Akamanzi nevertheless believes that such costs can be reduced in the medium term, as more investors invest in Rwanda. “If the environment is conducive for investors, it will encourage competition and increase supply, which in turn will bring costs down,” she pointed out.
The deputy CEO remarked that most of the laws passed have direct benefits to the business community. “For instance, if you look at the current labor law, it ensures that there is flexibility for both employers and employees, while protection of minority shareholders is well stipulated in the company law,” she said.
Despite good performances in most of the indicators of the Doing Business survey, Rwanda struggled in closing a business, trade across borders and dealing with licenses.
As for the first issue, Akamanzi pointed out that the insolvency law had not yet been used, experienced, and tested by the business community. On top of that, for World Bank to consider the indicator as active, at least 5 companies have to declare bankruptcy each year.
Empty containers
On the other hand, “trade across borders” is an indicator that can only achieve good results with the input of countries across the northern and southern corridors. Rwanda being a landlocked country and at the same time a net importer (it imports more than it exports) severely affects trade across borders.
“The time it takes for a container to leave the port and reach its destination is quite long, and the cost is high given the numerous procedures, weighbridges, and unnecessary roadblocks. The cost increases further due to the fact that most containers leave the country empty due to fewer exports,” Akamanzi explained.
She however indicated that countries across the corridors such as Kenya had shown the will to cooperate through reduction of roadblocks, weighbridges and generally improving the efficiency of the ports. “Studies have been conducted and the Kenyan government is willing to help reduce time taken along the northern corridor,” Akamanzi stressed.
As far as dealing with licenses is concerned, there were no specific procedures in place to deal with this. RDB together with Kigali City Council came up with a clients’ charter last year, but Akamanzi conceded that the challenge was to ensure that the chart is enforceable. “It has to be binding, otherwise it would not be adhered to by staff,” she said.
She further pointed out that other issues such as capacity of staff and the manual handling of the procedure are also impediments. “RDB and KCC are embarking on a project that will streamline licensing processes and handle procedures electronically,” Akamanzi said.
RDB is also in the process of restructuring its communication strategy to ensure that the entire business community is aware of the efforts to help the private sector through provision of better services. “We have always used the print media as our communication medium but not all people read newspapers,” Akamanzi pointed out. “So we are now looking at other mediums such as radio, television as well as billboards so that whatever we are involved in is known by the public.”
She also indicated that RDB will also use business development service centers (BDS) to communicate to the private sector about the reforms being carried out.
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