Linda gihana  the role of rwanda government to support private sector development
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Linda gihana the role of rwanda government to support private sector development Presentation Transcript

  • 1. Private sector development in Africa: The case for Rwanda". PRESENTATION BY MRS LINDA KALIMBA, 1ST COUNSELLOR RHC
  • 2. PRESENTATION OUTLINE• An overview of Rwanda• Government Strategic Objectives on Reforms• Development of SME Sector• Rwandan DB Organizational framework/engagement• Critical success factors• Challenges• Lessons to share• Conclusions
  • 3. Rwanda: An Overview Main  Rwandas Private Sector is the cornerstone of our economyFeatures  Rapid growth, in an increasingly diversified and competitive economy of  Fully open to everyone with no restrictions, international or Rwandan investors alike.Rwanda’sEconomic  Stable banking system Profile  Business hub for the rapidly growing East African region  Prudent fiscal and monetary policies The  Robust governance with a market friendly policy environment Factors Driving  Top ranking in East Africa in the Global Competitiveness Index and fourth among allRwanda’s African nationsSuccess  Political stability with well functioning institutions, rule of law and zero tolerance for corruption .  Middle income country status in line with the goals of Vision 2020  Net energy exporterThe Way  More diversified economy built on a comprehensive program of investment in energy, Ahead agriculture, ICT, and infrastructure  Major structural impediments need to be overcome
  • 4. Government Strategic objectives on reform processEffective reform requires a clear vision, committed leadership and capable institutions reinforcing rather than undermining each other Vision 2020: good governance, private-sector as an engine for growth. One Stop Centre:- The Rwanda Development Board has a mandate to facilitate not only the registration of companies but also provide after-care through the life of the investment project - (one stop centre). PSF which acts as the authentic voice of the private sector and an effective institution in promoting development Private -Public sector dialogue Consensus and shared commitment at Leadership retreats Support of Parliament and Judiciary: e.g. fast-tracking legal reforms
  • 5. Government Strategic objectives on reform process Automated registration:- It takes an investor only 24 hours, one procedure and just 15,000 to register a company in Rwanda or online for free. Simplified process of acquiring or transferring land and other forms of property in the country, and cut down the time to get a construction permit from over 200 days to just 45 days today. Commercial Courts established to resolve business disputes. They now guarantee a judgment in less than 100 days. These reforms have been consistent and gradual. This is why the 2011 World Bank Doing Business Report, named Rwanda the 2nd most reformed country in the world over a five year period. Investment in both soft and hard infrastructure For example, we have invested in a high speed fiber optic infrastructure in the entire country, established a modern free trade zone to support the manufacturing sector, and we are undertaking investments to increase affordable energy for the economy. We have established a stock exchange market, now operating since 2009 where listed stocks have generated a big international investment interest, and opportunity for others to recover their equity.
  • 6. Development of SME sectorSMEs are a key driver of Rwanda’s economic growthA strengthened SME sector will, among other drivers, help Rwanda to: Reduce the trade deficit; Create jobs, specifically off farm jobs; Increase the tax base.Development of the SME sector requires GOR focus and investment over a number of years – There is a time lag between some interventions (e.g. education) and their impact on SME sector – Milestones need to be set each year for the SME sector to realise resultsIn 2010 & 2011 GOR put in place important institutional foundations for future development – SME Policy and Strategy in place – Increase Management & technical capacity of SMES:-30 Public BDS Centres and 22 Private Sector BDS Centres now have infrastructure and staff/consultants; during 2010, 4700 SMEs trained, Technology and Business Incubation Facility (TBIF) at the Kigali Institute of Science and Technology (KIST), regional study tours ( EAC, India), Young enterprise project.
  • 7. Development of SME sector Increase Access to Finance:- Over the years, the Government has put in place a number of mechanisms (i.e. guarantee funds, refinancing facilities, loan guarantees, and external credit lines) to allocate resources to productive investments. 2708 SME accessed funding to the tune of 7.9bn RwF Together, total available funds for MSMEs are around RwF 45 billion per year on average; this represents less than 3% of GDP but an average of RwF 583,000 per MSMEs (slightly more than $1,000 per MSMEs and per year, or more than 3x the real GDP per capita).Increase Access to Markets both within the country and international markets Establish an SME portal with market information linking buyers and producers Organize SME Trade ExhibitionsTailor fiscal & regulatory framework to SMEs :- Law concerning a flat rate to be applied on SMEs being drafted, Gov’t put in place a simplified tax declaration form for SMEs
  • 8. THE RWANDAN DOING BUSINESS ORGANIZATIONAL FRAMEWORK/ENGAGEMENT
  • 9. Reforms are engaged, monitored and evaluated at the highest level Doing Business Unit in collaboration with Stakeholders identifies reform opportunities Technical Task force approves Reform Reform proposals are approved, owned and the implementation is overseen by the Steering Committee DB reforms annual plan is communicated across government National leadership retreat evaluates achievement and challenges to doing business reforms Taskforce heads and steering committee commit to new priorities RDB through Doing Business Unit coordinates, monitors the implementation and reports to the Prime Minister Prime Minister ensures that milestones are achieved
  • 10. DB 2012: Key Highlights• In 2012, Rwanda is 45th easiest country to do business (from 58th in 2011),• Rwanda is 2nd most reformed country in the world, over six years, after Georgia (2005-2011)• Rwanda is 3rd easiest in Africa (after Mauritius, South Africa)• Rwanda is 1st in EAC
  • 11. Rwanda’s Performance 2008-2012 DB 2008 DB 2009 DB 2010 DB2011 DB 2012Rwanda Ranking 150th 143th 67th 58th 45thStarting a Business 71 64 11 9 8Dealing with construction permits 125 89 89 82 84Employing Workers 102 113 30 - -Getting Electricity 51 50Registering property 138 59 38 41 61Getting credit 141 147 61 32 8Protecting Investors 168 171 27 28 29Paying Taxes 54 58 60 43 19Trading Across Borders 170 171 170 159 155Enforcing Contracts 46 48 40 39 39Closing a Business 178 181 183 183 165
  • 12. DEMONSTRATING THE IMPACT OF DB REFORMS
  • 13. DEMONSTRATING THE IMPACT OF DB REFORMS Trends in business registrations 7000 Sole Proprietorships 6000 Com panies Number of Registrations 5000 Total 4000 3000 2000 1000 0 2003 2004 2005 2006 2007 2008 2009 2010• Increasing in number of company registrations• Clear provision for investor protection
  • 14. RWANDA IS A CONSISTENT REFORMER
  • 15. CRITICAL SUCCESS FACTORS• High level support through committed Leadership and institutional ownership• Technical organization: Institutional reform and coordination. Establishment of RDB, and also fulltime DB coordination unit• Stakeholder buy in: Full collaboration and participation of private sector, civil society and all stakeholders in public institutions• Development Partner collaboration• Overall: Private sector minded government• Communication…. Results inspire
  • 16. CHALLENGES Enhancing entrepreneurship and innovation to sustain businesses Expanding access to credit and reducing rates to borrowing Addressing skills and capacity gaps Modernizing electronic transactions payment systems Addressing infrastructure bottle necks (Energy, transport, ICT to cut down high costs) Addressing non tariff barriers beyond our borders
  • 17. Lessons to share High level support- is very critical Reform boldly and broadly – reforms cannot happen without pragmatism, don’t wait for a perfect start- perfection is achieved through work in progress. Keep on identifying the next binding constraint- reform in series. Streamline and then automate- e.g. One Stop Center for company registration, National land center Private sector engagement is key
  • 18. Conclusions Open to learning from others. Our success is built on four pillars  Political stability  Stable macroeconomic framework marked by fiscal discipline and consistent policies  Reform policies that have produced dramatic improvements in Rwanda’s business operating environment  Improved governance marked by the rule of law and zero tolerance for corruption
  • 19. THANK YOU