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Rwanda Private Sector Federation

Rwanda Private Sector Federation

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Rwanda Private Sector Federation

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  1. Rwanda Private Sector Federation Private sector perspectives on long term investmentDevelopment Partners Meeting 2006

  2. Private Sector long term investment perspectivesRPSF Presentation Overview • Investing in our future • Private sector Challenges • RPSF response • Concluding remarks

  3. Good News – Fresh investments coming into play through mobilised private sector • RIG Model • PPP approach • Mobilised 25 million US$ for local investments • Targeted investment areas: • Energy - methane gas , • Agribusiness, • Financial services, • Cement manufacturing, • Real estate development • Thinking outside the box – Private sector in the creative economy- ICT ( Software development and call centers) Investment in sports stadium, investments in the movie industry, sports and amusement parks, – though concept still new • Mobilisation of the diaspora for local investment (USA, Europe, Rest of Africa) - Case of real estate investments

  4. Replicating the RIG model by province – Projects identified Other projects of a sectoral nature in the pipeline include the agricultural bank

  5. They are other opportunities in Priority Sectors Rwanda is competing in new segments in Tourism, Tea and Coffee Tourism Tea Coffee • Primate tourism • Cultural tourism • Business tourism • CTC tea • Orthodox tea • Packaged & flavored tea • Specialty Arabica • Nyungwe lodge--$1.5M • Coffee tourism farm • Tour companies--$200K • Tea factories for sale • Tea packaging • Marketing / distribution • Coffee tourism--$500K • Toll roasting in Far East

  6. They are other opportunities in Priority Sectors Horticulture, Mining, Hides & Skins offer attractive opportunities Mining Horticulture Hides & Skins • Metals—Coltan, Wolfram, • Precious stones • Quarry products • Organic fresh fruits • Dried fruits & vegetables • Juice • Wet blue • Leather • Finished goods • Mining concessions • Cutting stone facility • Cement and Tile factory • Rose farms--$300K / ha • Drying facility--$50K • Packing center--$30K • Tannery--$ 800K • Integrated leather unit • Leather Handicraft

  7. The sector continues to face a number of challenges However they are challenges Structural constraints Institutional constraints Supply side constraints: • Geographical barrier due to lack of access to the sea • Small-sized national market • Inadequate physical infrastructures – Road network, no railway link to the region, energy • Land issues • Availability of long term financing instruments • High transport costs • Limited skills both technical and managerial • Technology limitations • existence of some irrelevant legislations pending reforms • RPSF institutional Financial & capacity challenges • Poor participation in Public policy decision • Capacity issues in private sector support institutions

  8. Infrastructure Energy Related Issues Low skills base Weak representation in policy decisions Taxation Issues Access to credit Access to markets Corruption Private sector Survey findings Infrastructure is the main constraint for large firms – Corruption least noticed “What would you say are the biggest challenges facing your business today? Not important (1, 2 ) Neutral (3,4,5) Important (6,7) Source: OTF Group Survey Private Sector Opinions N=30, November 2005

  9. RPSF is mandated to lead the private sector responseGood progress has been made in executing the first strategic plan RPSF Strategic Priorities RPSF main actions completed • Articulated a National BDS Development Plan • 4 BDS centres opened • Business Plan Competition established (over 900 proposals) Strengthen private sector companies in Rwanda Build human capacity for Rwanda’s private sector • Developed a capacity building plan for SMEs and Cooperatives • Initiated a partnership with HIDA & ACBF • Performed donor fundraising campaign • Improved membership revenue collection (RwF 28m – 110m) Facilitate sustainable funding for the private sector • Represented private sector in PPP meetings • Negotiated successfully for the removal of 4% Magerwa fee • Negotiated successfully for the removal of 1.2% business reg Perform advocacy in Public Private Partnership Provide dispute arbitration & business challenge assistance • Actively participated in the review of business laws • Leading the restructuring of the arbitration center • Completed private sector communication strategy and website • Completed feasibility study and gained land for permanent exhibition site Increase RPSF effectiveness and develop infrastructure Develop vibrant private sector associations • Restructured 23 associations into 9 chambers (51 associations) • Signed partnerships with 7 foreign chambers of commerce

  10. The next RPSF Strategic Priorities 2007-2010 Mission To represent the interests of the entire private sector through advocacy, BDS provision thereby taking the lead in the growth of a private sector driven economy • Vision To foster the transformation of Rwanda into a middle income nation through a strong and vibrant private sector. Strategic Priorities 2007-2010 Provide direct support services to business Advocacy to improve the business environment Promote entrepreneurship and business growth Build capacity for Rwanda’s private sector Effective Private sector advocacy in PPD/PPP Enhance Ps involvement in regional & international trade Build RPSF institutional capacity

  11. RPSF response: Major projects – BDS Network to support private sector investment

  12. RPSF response: Major projects – Capacity building Project: 2007-2010 • Public Private sector dialogue Interface US$ 429,091 • Skills upgrading and knowledge building US$ 782,571 • Information & Knowledge management US$ 350,182 • Building competitiveness of SME’s and MSSE’s:US$ 962,545 • Program for youths & women entrepreneurs: US$ 500,000 • RPSF Institutional strengthening (Others) US$ 495,943 • Total programs expenditure US$ $3,520,332 Reference: Private sector capacity building plan – key programs

  13. Concluding remarks • Given that private sector investment has been lagging behind, there is a strong need for GoR to increase investment expenditure on infrastructure development which are crucial for private sector productivity • This encompasses the full range of energy, transportation and communication facilities that must be in place for private producers to carry on their activities at competitive cost • In addition the GoR should carry out crucial human capital formation both in technical and managerial skills required for rapid industrialization and entrepreneurship development • The government under the PPP arrangement should mobilise long term financing to jumpstart investments in potential export sectors with an exit strategy • The government should continue to play a catalytic role in providing and sustaining an attractive business environment ( expediting business law reform including property registration, removing red tape around doing business and putting in place customer charters in public sector offices, putting in place an SME charter or policy) • We reiterate the private sector call on the development partners to support the development agenda including direct support to the private sector so as to build the engine of sustainable economic growth

  14. Thank you for your kind attention