Kigali, Rwanda
By Dr Harnet Bokrezion
Greetings from beautiful Rwanda where a return of the rains has rejuvenated farming activities following a lengthy dry summer. The first quarter of 2023 saw Rwanda’s economy grow by 9.2%, outperforming all the other economies in the Eastern Africa region. In this article, I highlight several business and investment trends in Rwanda that might not be immediately obvious to those outside the country.
1. Real estate is in a boom phase
Rwanda’s capital Kigali is currently experiencing a real estate boom I have not seen in the last decade, and secondary cities across the country are following suit. Those interested in real estate investments should really get onto the bandwagon fast while this is still trending upwards. As a result of increased economic growth and an influx of new industry players in the country, there are real estate development opportunities for commercial spaces, new family homes, hospitality premises, and smaller income-generating residential units. Residential plot prices in some prime areas have almost doubled over the last couple of years.
Associated services such as real estate management, interior design, landscaping, security, affordable building solutions, and furniture are some other areas that offer potential.
The distinctiveness of building and buying real estate in Kigali lies in its low risk for investors. The city master plan is effective, and ownership rights are straightforward for both nationals and foreigners.
2. Catering to the high-end market
One of the smartest strategies the Government of Rwanda has implemented in this rather tiny landlocked country is to go high end. Or in other words, Rwanda aims to significantly increase its economic output per square kilometre by increasing the market value of its output. It does so by strategically developing high-end luxury niches across tourism and hospitality, international sports, meetings and exhibitions, real estate, finance, and other selected services.
Even though the country attracts seasoned businesspeople, wealthy travelers, and high-net-worth individuals, there remains a limited range of luxury offerings available to this consumer group. This gap presents a significant opportunity for enterprising entrepreneurs to design high-end offerings in sectors such as tourism and hospitality, food processing, private concierge services, transport, financial services, and retail.
3. Tapping into the green economy
Did you know that Rwanda is one of Africa’s most advanced green economies? Well, now you do. With a country that is pioneering green solutions and with global consumer habits and policies changing fast, Rwanda is a good market to introduce green products and services. However, bear in mind that Rwanda’s market size is somewhat limited. Thus, any green solutions must be thoughtfully developed for profitability. Here are a few tips:
- Design products and services for the broader region, like the East African Community, to secure a larger potential customer base.
- Pilot a lean version of your green product first to assess its viability before heavy investment.
- Position your green solutions at the premium end to attract regional industry buyers with spending power, such as corporate firms, major manufacturers and exporters, sustainable real estate developers, or larger infrastructure projects.
4. Kigali’s startups need investors and services
Kigali’s tech startup scene has grown by leaps and bounds in the last couple of years. And while it still lags behind cities like Nairobi, it has become a new hub in its own right since Norrsken established an entire startup campus in the very heart of the city. Kigali’s new startup scene attracts young entrepreneurs, accelerators, and incubators creating requirements for funding, training, and a variety of other services and products.
What’s more, the Government of Rwanda has recently drafted a new startup act. If approved, Rwanda would join a handful of African countries, like Tunisia and Senegal, which have adopted similar acts. This proposed legislation could offer substantial incentives for tech startups in Rwanda: VAT and corporate tax exemptions for five years, 0% employee tax (PAYE), no tax on shareholder earnings for founders, immigration benefits, access to capital provisions, and support for intellectual property and patents. Clearly, Rwanda is vying to be a notable tech hub in the East African region.
5. Investment is vibrant around Rwanda’s lakes
Rwanda continues to invest in the infrastructure around its magnificent lakes, while upholding sustainability and economic inclusion of local communities. The majority of these efforts can be found in the catchment areas of Lake Kivu and Lake Muhazi. The development of the Kivu Belt, for example, which was designed by the government to attract more tourists to Rwanda and keep them in the country for longer, came along with new roads, serviced land plots, and a range of well-designed tourism trails and offerings around trekking, water sports, and wellness. Because more people across the world now also value the beauty of nature since they faced global pandemic lockdowns, we clearly see a newly trending interest among investors to invest their money both in private and commercial real estate, hospitality, and tourism services around Rwanda’s serene lakes.
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