This document summarizes a presentation by Linda Kalimba on private sector development in Rwanda. Some key points include: - Rwanda has pursued strategic reforms to develop its private sector and SME sector through streamlining business registration, improving access to financing, and establishing institutions like the Rwanda Development Board. - Reforms are overseen at the highest levels and engage stakeholders from government, private sector, and civil society. - Success factors include high-level leadership, technical coordination of reforms, and ongoing engagement with the private sector. - Challenges remain in areas like access to credit, skills and capacity development, and infrastructure bottlenecks. - Rwanda serves as an example of

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  Rwanda's Private Sector is the cornerstone of our economy
Features  Rapid growth, in an increasingly diversified and competitive economy
of  Fully open to everyone with no restrictions, international or Rwandan investors alike.
Rwanda’s
Economic  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 all
Rwanda’s African nations
Success  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 exporter
The 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 process
Effective 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 sector
SMEs are a key driver of Rwanda’s economic growth
A 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 results
In 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 Exhibitions
Tailor 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 2012
Rwanda Ranking 150th 143th 67th 58th 45th
Starting a Business 71 64 11 9 8
Dealing with construction permits 125 89 89 82 84
Employing Workers 102 113 30 - -
Getting Electricity 51 50
Registering property 138 59 38 41 61
Getting credit 141 147 61 32 8
Protecting Investors 168 171 27 28 29
Paying Taxes 54 58 60 43 19
Trading Across Borders 170 171 170 159 155
Enforcing Contracts 46 48 40 39 39
Closing 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