WEF_GrowAfrica_AnnualReport2014

2013 in Review
2013 in Review
2.9
Country
Report
2013 IN REVIEW
PROGRESS
Strategic partnerships in agriculture
are adding value and boosting exports
Rwanda
Wooing investors with
Special Economic Zones
Rwanda offers a highly conducive business
environment and stable macro-economic framework for
investment in agriculture. The country’s positive legal
environment is further bolstered by strong governance
structures, which have seen Rwanda rated as the least
corrupt nation in sub-Saharan Africa, and Kigali as the
safest capital in the region.
The World Bank’s Doing Business Report 2014 ranked
Rwanda as the top global reformer, and 32nd for
doing business globally out of 189 countries. Indeed,
extensive regulatory reforms have reduced bureaucracy
around business creation, access to finance, tax breaks
and risk mitigation. A new Investment Code, currently
in the process of being finalised, is set to enhance the
country’s enabling environment even further.
Integral to these efforts has been the creation by the
Government of Rwanda (GoR) of Special Economic
Zones, which are aimed at promoting private
investment as well as industry and export growth by
offering quality infrastructure, streamlined business
regulations and incentives to investors and businesses.
Attracting particular interest among agricultural
investors is the Kigali Special Economic Zone,
which also offers both regulatory incentives and the
necessary infrastructure for agro-processing, including
roads, energy, water and ICT.
Between 2000 and 2013, the value of registered
private investments in Rwandan agriculture totalled
$512 million across 184 projects. As the top export
commodities, tea and coffee have remained significant
investment targets, though proportionately only
accounting for 19% of overall investment. The industry
is increasingly witnessing diversification into emerging
sub-sectors with growth potential, including beverages,
floriculture, fruits and vegetables, dairy, meat, hides
and skins, rice and grains, fish, honey and oils.
Through Grow Africa, the country has identified specific
investment projects to boost outputs, improve quality
and drive up revenues for different commodities. These
include expansion of the tea sector by increasing the
growing area by a further 15,000 ha by 2017. Other
processing facilities for Irish potato, cassava starch,
animal feed and bio-fortified baby food are also under
construction – all of which add value and facilitate
domestic revenue generation, goals that will continue
to represent the agricultural sector’s overarching
priorities over the next five years.
The focus of the Ministry of Agriculture (MINAGRI) on
crop intensification, land consolidation and the farmer
cooperative model is beginning to yield results, thanks
to the collaborative efforts of organisations such as the
Rwanda Cooperative Agency (RCA), which promotes
the formation of cooperatives and provides farmer
coaching and support, and development partners such
as the Belgian Technical Cooperation agency, which
provides funding for vital up-skilling initiatives such as
the Farmer Field Schools programme.
Through transformational partnerships, best practices
are filtering through the agriculture sector and
enabling smallholder farmers to scale up production
and increase their incomes. For example, German
firm Strawtec Building Solutions is working with
wheat unions to produce strawboard for use in highperformance
wall systems in the low-cost housing and
commercial construction market in Rwanda, providing
smallholders with an additional income from their
wheat husks.
As noted earlier, Rwandan agriculture is seeing
growing diversification into emerging high-potential
sub-sectors. To facilitate investors’ efforts to tap into
the opportunities that this trend presents, the GoR
itself is increasingly partnering with the private sector
on projects that add value and increase exports in
underdeveloped sectors by providing resource and
infrastructure support. Some prominent examples
include:
•¡
Bahkresa Grain Milling Ltd, which began its flour
milling operations in Rwanda in 2011, was one of
the first investors to set up a processing factory
in the government-established and infrastructureboosted
Kigali Special Economic Zone. In return
for facilitation of its investments, the company has
diversified into the government-recognised priority
area of coffee value-addition, and now hires farmers
under the subleasing model to produce coffee. The
company in turn supplies farmers with inputs while
serving as a guaranteed buyer of their crops;
•¡
MINAGRI and Luxembourg-based firm Erasmus
Investment International signed a formal commitment
worth €3.5 billion in January 2014 for a wide-ranging
project portfolio that envisages investment in hillside
irrigation, land cultivation (including seeds, fertilisers,
and training), development of horticulture (including
greenhouses), fruit and vegetable processing,
mechanisation, postharvest treatment, logistics, cold
storage, production and export of silk, and livestock
(specifically poultry and fish-farming); and
•¡
In furtherance of on-going government-led efforts
to expand the tea sector, including through land
consolidation and resettlements aimed at increasing
the growing area, a government tender has attracted
investment proposals from major off-takers and
processors. The project will generate significant
inward investment, reach thousands of smallholders,
and increase in-country value addition and direct
sales to market thereby reducing Rwanda’s
dependence on the Mombasa Tea Auction.
In order to fast-track such investments, MINAGRI and
the RCA have identified the best farmer cooperatives
together with production areas that will serve as
Premium Agriculture Investment Hubs for specific
commodities, with the focus shifting towards improving
their marketing and business skills. A new wave of
the Rwandan diaspora is also returning home and is
eager to offer expertise and contribute to the country’s
progress. Private companies have played a pivotal role
in the integration of these returnees into the agriculture
industry, though capacity building efforts have
benefited from on-going support from both the private
and public sectors.
All of these factors, together with a multitude of
partnership initiatives, are combining to create a
strong climate for value addition and export growth in
Rwandan agriculture.
144
Rwanda
Rwanda
145