卢旺达数字FDI促进项目

Incollaborationwith

TelecommunicationsManagementGroup

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda

INSIGHTREPORTJANUARY2025

Images:GettyImages

Contents

Executivesummary3

Introduction:TheDigitalFDI-EnablingProjectinRwanda4

1ThestateofplayofdigitalFDIinRwanda8

1.1Legalandpolicyframework8

1.2TrendsinRwanda’sdigitalFDI10

1.3TheEastAfricanCommunity’sdigitalFDIflows12

2TheRwandaoutlook14

2.1Stakeholdermapping14

2.2Challenges15

3Priorityactionitems16

3.1Actionplans17

Conclusion19

Annexes20

Contributors32

Endnotes33

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DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda2

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda3

January2025

DigitalFDIInitiative:

DigitalFDI-EnablingProjectinRwanda

Executivesummary

Acrosstheglobe,societiesareexperiencingrapiddigitaltransformation,whichhasthepotentialtosignificantlychangetheway

peoplelive,workandcommunicate.

Effectivegovernanceframeworksareessentialtomaximizethepotentialofforeigndirectinvestment(FDI)tospeedupthisprocess,andtheDigital

FDI-EnablingProjectinRwandaaimstoidentify,developandimplementmeasurestocreatea

digital-friendlyinvestmentclimateinthecountry.

Thisfinalreportpresentsobservationsandpolicy

optionsbasedonanextensiveconsultationprocesswithrelevantpublic,private,academicandcivil

societystakeholdersinRwandasdigitalsector.ItassessesRwandascurrentenablingenvironmentfordigitalFDI,includingcomparisonswithregionalpeers.Thereportalsoprovidesaseriesof

actionablestepsthatpolicy-makerscanimplementtofurthersupportRwandasdigitaltransformationthroughincreasedFDI.

Thereportskeyfindingsinclude:

Rwandahasrobustlegalandpolicyframeworksinplacetosupportthedigitalsector,includingalackofrestrictionsonforeignownershipor

control,prioritizationofinvestmentinsectorsincludinginformationandcommunication

technology(ICT)companies,businessprocessoutsourcingandfinancialservices;robust

supportofeffortstoincreasethemanufactureofelectronicsandICTequipment;andinitiativestodrivedigitalskillsdevelopment.

RwandaexperienceschallengesinattractingFDIduetoregulatorychallenges,concernsregardingconnectivityanddatainfrastructure,limited

accesstocapital,misalignmentofhumancapitalneeds,regionalcompetitionandinsufficient

supportforstart-upsandearly-stagecompanies.

Stakeholdersidentifiedpolicyactionsthat

couldsignificantlysupportincreasedFDI

flows,includingintellectualproperty-related

taxincentives,strengtheninginvestment

matchmakingplatforms,aligninguniversity

programmeswithdigital-sectorhumancapitalneedsandfosteringcross-borderdataflows.

TheDigitalFDI-EnablingProjectinRwandawill

continueworkingwithstakeholderstosupporttheimplementationoftheseinitiativesandfurthergrowinvestmentintoRwandasdigitaleconomy.

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda4

Introduction:The

DigitalFDI-EnablingProjectinRwanda

TheDigitalForeignDirectInvestmentInitiativeaimstoboostforeigndirectinvestmentinthedigitaleconomiesofitsprojectcountries.

TheDigitalForeignDirectInvestmentinitiative(DFDI)

waslaunchedin2022bytheDigitalCooperation

Organization(DCO)andtheWorldEconomicForum(theForum).InRwanda,thesecondcountryin

whichaDFDI-EnablingProject(DEP)hasbeen

launched,theconsultingfirmTelecommunicationsManagementGroup(TMG)wasselectedtoprovidelocalconsultancyandsupportservices.TheMinistryofInformationandCommunicationsTechnology

andInnovation(MINICT),whichhasmobilizedawhole-of-governmenteffort,istheGovernmentofRwandacounterpartfortheDEP.

TheprojectaimstoincreasedigitalFDIinRwandathroughenablinginterventionstocreateadigital-friendlyinvestmentclimate.Theengagementis

supportedbyfourareasofwork,orpillars,thatenableinvestmentin:

–Digitalinfrastructure

–Newdigitalactivities,suchasdigitalstart-ups

–Digitaladoptionbytraditionalbusinesses

–DigitalservicesexportsandoutwarddigitalFDI

TheGovernmentofRwanda’sVision2050

providesalong-termvisionforsustainedgrowthandrecognizestheimportanceoftheinformationandcommunicationstechnology(ICT)sectorin

drivingeconomicgrowthandsocialdevelopment.1Advanceddigitalinfrastructureandtechnologiescanhelpmodernizetheeconomy,createjobsandimprovethequalityoflifeforcitizensthroughout

thecountry,andVision2050recognizesthe

uniqueimpactthattheICTsectorcanhaveon

Rwanda’seconomiccompetitivenessandglobalintegration,educationalprogrammes,healthcareandagriculture.DigitalFDIcanhelpRwanda

meetthesetransformationalgoalsforitsdigital

economybybringinginnotonlyforeigncapitalbutalsoknowledgeandnewtechnologiestoboost

domesticdigitalcapabilities.

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda5

Projectmethodology

FIGURE1TheDEPproject,sDigitalFDIframework

Newdigitalactivities

Digitaladoption

DigitalFDI

Digitalinfrastructure

OutwarddigitalFDIanddigitalservicesexports

Source:WorldEconomicForumandDigitalCooperationOrganization

Theprojectaimstodeterminethestateofplay

regardingdigitalFDIflowsandrelevantlawsand

regulationsinRwanda,aswellastoidentifyand

helpimplementelementsthatimprovetheenablingenvironmentforgrowthofinvestmentinthedigitaleconomyacrossfourkeypillars.

Pillar1.Digitalinfrastructure:Elementsthatenableinvestmentindigitalinfrastructure,whichincludesbothaphysicaldimensionandaregulatorydimension.

Projectstages

Theprojectbeganwithinitialresearch

tounderstandthepolicyandregulatory

environment,digitalFDItrends,keydevelopmentsinthetechnologyandinvestmentregimeand

identificationofkeystakeholders,aswellas

preliminaryinvestigationintothefactorsaffectingdigitalFDIinRwanda.Theearlystageofthe

Pillar2.Newdigitalactivities:Elementsthat

enableinvestmentinnewdigitalactivitiessuchassocialmedia,digitalplatforms,cloudservicesanddatacentres.

projectalsoincludedasurveyexploringenablingfactorsthatinfluencedecisionstoinvestin

Rwanda’sdigitaleconomy.Tofurtherdeepen

understandingintheseareas,anextensive

consultativeexercisewasthenundertaken

todrawprimaryinsightsfromstakeholders

Pillar3.Digitaladoption:Elementsthatenable

digitaladoptionbytraditionallynon-digitalfirmsasfacilitatedbypoliciesandmeasuresthatenabletheintegrationofdigitalservices.

throughoutthedigitalenvironment.ThisprocessbeganwithaformalexchangeoflettersbetweentheDCO,theForumandtheGovernmentof

Rwandaon30January2023,followedbywhole-of-governmentmeetingswiththeprojectteam

Pillar4.OutwarddigitalFDIanddigitalservicesexports:Investmentthathelpsdeveloplocal

capacitytoenabletwo-wayintegrationwiththeglobaldigitaleconomy.

on31January2023.Thelastoftheseinitial

meetingswiththeGovernmentofRwandawasconductedinpersoninconjunctionwiththe

interviewsdescribedbelow.

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda6

Theprojectteaminterviewedabroadcross-sectionofstakeholders,including:public-sectorentities,

foreigninvestors(largeandsmaller),domestic

investors(largeandsmaller),governmententities,businessassociations,largetechnologyfirms,smallandmediumenterprises(SMEs),incubatorsand

accelerators,internationalorganizations,academia,

developmentpartnersandcivilsociety.Atotalof

51interviewswerecompleted.Ofthese,44wereconductedinpersoninRwanda,whilesevenofthestakeholderswereinterviewedvirtually.Stakeholdergroupscoveredduringtheseinterviewsare

presentedinTable1.

TABLE1

Stakeholdergroups

Consultationsheld

Numberofstakeholdersconsulted,bygroup

Public

sector

Foreign

Domestic

Incubators

Business

Academia/

Civil

International

investors

investors

and

accelerators

associations

developmentpartners

society

organizations

8

20

11

2

2

2

2

4

Total51

Themainchallengesidentifiedduringthestakeholderconsultationsincluded:

–Institutionalgovernancechallengesaffectingtheimplementationofpolicies,lawsandregulations

–Ongoingconcernswithaffordabilityandreliabilityofconnectivityinfrastructureforenterprisesandconsumers

–Datalocalizationrequirementsandlimitedavailabilityofaffordable,localandsecuredatastorage

–Mechanismstofacilitateaccesstocapitalandfinancing

–Misalignmentofhumancapitalneedsbetweenindustryandacademic/traininginstitutions

–Regionalcompetitionduetothetalentpool,digitalskills,marketmaturityandgeography

–Insufficientsupportforstart-upsandearly-stagecompanies

Complementarysurveyfindings

Theinterviewswerecomplementedbyasurvey

thataimedtoidentifyenablingfactorsthat

influencefirms’decisionstoinvestinRwanda’s

digitaleconomy.Thesurvey,commissionedby

theprojectandconductedinOctober2023by

theAzureKnowledgeCorporationseparatelyfromthestakeholderinterviewsmentionedpreviously,

wascompletedby104firmsthathaveinvestedinRwanda’sdigitaleconomy.Surveyrespondents

weredrawnfromfirmsinthemaindigitallyenabling

sectors,includinginformationtechnology(IT),

telecommunicationsandmedia,e-commerceandconsumerelectronicsandfinancialservices,usingthefDiMarketsdatabase.Ineachofthesesectors,respondentscitedRwanda’sstatusasagrowingmarketastheirtopreasonforinvestment,followedbypotentialforincreasingefficiency.

Theimportanceofmanyofthethemesidentifiedthroughstakeholderconsultationiscorroboratedbythesurvey(Annex1).2Forexample,difficultywithregulatorybodieswasathemeidentifiedininterviewsandcorrespondswiththeidentificationoftheICTregulatoryframeworkasahighly

importantfactorininvestmentdecision-

makingby59%ofsurveyrespondentsintheITsectorand38%ofsurveyrespondentsinthe

telecommunications/mediasector.3Similarly,

easeofICTregulationswasidentifiedasahighlyimportantfactorininvestmentdecision-makingby55%oftelecommunications/mediasector

respondentsand67%ofITsectorrespondents.

Thethemesidentifiedinthesurveyresultsare:

Ongoingconcernswithaffordabilityandreliabilityofconnectivityinfrastructureforenterprisesandadoptionforconsumers

–Thecostofinternetaccessandusagewas

categorizedasahighlyimportantfactorwheninvestinginRwanda’sdigitaleconomyby

78%ofITsectorrespondentsand63%of

telecommunications/mediasectorrespondents.

–Qualityoftheinternetwasidentifiedasa

highlyimportantfactorfor71%ofITsector

respondentsand25%oftelecommunications/mediasectorrespondents.

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda7

Limitedavailabilityofaffordable,localandsecuredatastorage

–Domesticdatacentreswererankedashighly

importantphysicalelementsby61%ofITsectorrespondentsand25%oftelecommunications/mediasectorrespondents.

–Akeyrelatedfactor–energyandpowerinfrastructure–wasidentifiedasthemostimportantfactorforrespondentsin78%ofITsectorrespondentsand63%of

telecommunications/mediasectorrespondents.

Misalignmentofhumancapitalneedsbetweenindustryandacademic/traininginstitutions

–Thelevelofdigitalskillsintheeconomy

wasidentifiedasahighlyimportantfactor

ininvestinginRwanda’sdigitaleconomyby

58%ofITsectorrespondentsand51%of

telecommunications/mediasectorrespondents.

–Theavailabilityofskilledlocalengineers

andotherworkerswasidentifiedasa

highlyimportantfactorby70%ofITsector

respondentsand51%oftelecommunications/mediasectorrespondents.

Furthermechanismstofacilitateaccesstocapitalandfinancingrequired

–Theavailabilityofventurecapitalwascited

asahighlyimportantfactorforinvestingin

Rwanda’sdigitaleconomyby54%ofITsectorrespondentsand38%oftelecommunications/mediasectorrespondents.

–Supportfromthegovernmentforaccessto

capitalwasidentifiedashighlyimportantby

62%ofITsectorrespondentsand51%of

telecommunications/mediasectorrespondents.

Insufficientsupportforstart-upsandearly-stagecompanies

–Theabsenceofclusters,incubatorsand

innovationhubswasidentifiedashighlyimportantby56%ofITsectorrespondentsand26%of

telecommunications/mediasectorrespondents.

Afterconductinginterviewswithkeystakeholdersandanalysingtheresultsofthecomplementarysurvey,theprojectteamcompiledalistofkey

challenges,opportunitiesandpolicyoptionsforfurtherconsideration.Policyoptionswerescoredbytheirpotentialtopositivelyinfluenceand

enabledigitalFDIeitherdirectlyorindirectlyandwerediscussedintheconsultationandvalidationworkshopdetailedinSection3ofthisreport.

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda8

1

ThestateofplayofdigitalFDIinRwanda

Rwanda’sexistinglegal,regulatoryandpolicyframeworksprovideafoundationforforeigndirectinvestment.

ThissectionprovidesasnapshotofRwanda’sdigitalenvironmentanddigitaleconomyanddescribesthe

contextwithinwhichtheDEPwasexecuted,includingtheidentificationofpotentialaspectsofRwanda’slegalandregulatoryframeworkanddigitalFDIenvironmentthatwerefocalpointsforrecommendedchanges.

Inthecontextofthis,digitalFDIincludesinvestmentinfivekeysectors:

–Businessmachinesandequipment

–Communications

–Consumerelectronics

–Electroniccomponents

–SoftwareandITservices

AsnotedbytheForumin2021,thecommunicationsandsoftwareandITservicessectorscanbe

considered“structural”digitalenablers,whilethebusinessmachinesandequipment,consumer

electronicsandelectroniccomponentssectorsaremore“supportive”enablers.4

1.1

Legalandpolicyframework

FDIinRwandaisprimarilygovernedbyLaw

N°006/2021of05/02/2021onInvestment

PromotionandFacilitation(theInvestmentCode),whichestablishesabroadframeworkforincreasinginvestmentandpromotingeconomicgrowth.

TheInvestmentCodeidentifiespriorityeconomic

sectors–includingmanufacturing,exportandICT–andcreatestaxincentivesforinvestors.

WhiletheInvestmentCodelaysthegroundworkforFDI,theincentivetoengageindigitalFDIinRwandaisalsosupportedbyseveralsector-specificpoliciesandregulations.Thesepoliciesandregulations

notonlyhelptoencourageinvestmentinICTs

anddigitalplatformsbutalsoensurethedigital

infrastructureuponwhichdigitaltransformationofothersectorscanbebuilt.

Relevantlawsandpoliciesareidentifiedbelow:5

Investmentpromotionandbusinessoperation

–LawN°006/2021of05/02/2021on

investmentpromotionandfacilitation6

establishesaframeworktopromote,

facilitateandgoverninvestmentinRwanda,

particularlyinpriorityeconomicsectorssuch

asmanufacturing,exportandICT.Thelawalsoaddressesincentivestoinvestors,protection

ofinvestors’capitalandassetsandtheirintellectualproperty(IP)rights,investment

registrationandobligationsimposedonregisteredinvestors.

–Anannextothelawidentifiesspecific

incentivesforregisteredinvestors,includingpreferentialcorporateincometaxrates

andwithholdingincometaxratesifcertainconditionsaremet,acorporateincome

taxholidayofuptosevenyears,incentivesforstart-ups,researchanddevelopmentincentivesandtalentattractionincentives.

–LawN°007/2021governingcompanies(the

CompaniesAct)(asamendedbyLawN°

019/2023)7establishesthelegalframeworkto

incorporateandoperatecompaniesthatdo

businessinRwanda.WhilenotexplicitlyfocusedondigitalFDIortheICTsector,theCompaniesActsetsouttherulesfortheestablishment,ownershipandoperationofbusinessesinRwanda,includingthoseresultingfromdigitalFDI.Thisisthelaw

governingallRwandancompanies,anditsroleincreatingorremovingbarrierstotheestablishmentofnewcorporateentitiesshouldbereviewed.

Informationandcommunicationstechnology

–LawN°24/2016governinginformationandcommunicateontechnologies(ICTLaw)8establishesRwanda’sframeworkfortelecommunicationspolicyandregulation,

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda9

includingnationalsectorobjectives,licensing

frameworks,institutionalbodiesandservice

standards.TheICTLawgovernsallelectroniccommunicationsandinformationsector

activitiesinRwanda–inparticularthe

communicationssector,whichaccountsfor

morethanathirdofRwanda’sinwarddigital

FDIoverthepastdecade.Thisincludes

provisionsgoverninglicensing,typeapproval

andradiospectrumusage,aswellasfurther

enablersofdigitalservicessuchaselectronicrecordsandsignatures,electronictransactions,e-governmentandonlinecontentgovernance.

–TheICTSectorStrategicPlan(2018–2024)9

createsaroadmaptohelpRwandatransition

intoaknowledge-driveneconomyandtousetheICTsectorasa“catalystforrapidandsustainedeconomicgrowth”.Theplancommunicates

governmentprioritiesintheICTsectorrelated

tobroadbandaccess,digitaltransformation,

digitalliteracy,financialtechnology(fintech)

andsmartcities,amongothers.Theplanthusinformsallstakeholdersofthegovernment’s

prioritiesconcerningthecontinueddevelopmentof–andinvestmentin–ICTinRwanda.The

planspecificallydiscussesFDIasawayof

acceleratingeconomicgrowthandgrowinga“vibrantandinnovative”ICTsector,aswellaseffortstouseFDIinhumancapitalcapacity-

building.Withtheperiodaddressedbytheplannearingitsconclusion,stakeholdersshouldbeengagedinshapinganewplanthatwillidentifyanddirectdevelopmentandinvestmenteffortsoverthenextfewyears.

–The2022NationalBroadbandPolicy

andStrategy10providesavisiontousean

accessible,high-qualitybroadbandservice

tomakeRwanda’sdigitaleconomymore

competitive,innovativeandgloballyoriented.Notably,thispolicyeliminatesrestrictions

thatlimitedmobilenetworkoperator(MNO)

investmentsinupgradingmobilenetworksto4G,5Gandbeyond,enablinganincreaseinnetworkinvestment,improvingandexpandingtheconnectivitythatisacriticalenablerof

currentandfuturedigitaleconomyactivitiesinRwanda.LiketheICTSectorStrategicPlan,theNationalBroadbandPolicyandStrategy

identifieskeygovernmentprioritiesandplannedactivitiesthatwillfurtherenablethedigital

economyandmakeRwandaamoreattractivedestinationfordigitalFDI.

–TheSevenYearsGovernmentProgramme:

NationalStrategyforTransformation

(NST1)11identifiesnationalprioritiesinthe

shortandmediumterms,includingprioritizing

thedevelopmentofknowledge-based

sectors,includingICT.NST1alsohighlights

theimportanceofaskilledworkforceto

accomplishingRwanda’sstrategicgoals,aviewthatisalignedwiththeNationalBroadband

PolicyandStrategyandinterestindevelopingapopulaceandworkforcepreparedtobenefit

fromandparticipateindigitaleconomyactivitiessupportedbydigitalFDI.

–TheRevisedPolicyonIntellectualProperty12isintendedtohelppromotea“self-sufficientandinterconnected”knowledge-basedeconomy.

ItmentionstheneedtoinstituteanewIP

policyframeworkthat(a)createsincentives

forinnovatorsand(b)providespublicaccesstoknowledge.ThepolicynotesthatitenablesinvestorstoestablishcomplexmanufacturingoperationsinRwanda,therebyexpanding

potentialinvestmentopportunities.

Digitalcontent,platformsande-commerce

–LawN°058/2021relatingtotheprotectionofpersonaldataandprivacy13institutesaseries

ofpersonaldataprotection/privacyprovisions

andcreatesasupervisoryauthoritytocarryout

enforcement.Italsoestablishesadatalocalizationrequirement,mandatingthatpersonaldatabe

storedwithinRwandaunlessauthorizationis

grantedbythesupervisoryauthority.ParticularlynotingthehighproportionofdigitalFDIinsoftwareandITservicesandtheimportanceofpersonal

datainawiderangeofdigitalofferings,aclear

personaldataandprivacyregimeisanimportantprerequisitefortheongoingdevelopmentof

suchservices.WhiletheproportionofdigitalFDIdirectedtowardssoftwareandITservicesmaychange,theyareexpectedtoremainasignificanttargetforinwarddigitalFDI.

–LawN°60/2018onthepreventionand

punishmentofcybercrimes14establishes

measurestopreventandpunishcybercrimes,

includingservice-providerobligations,

investigativeproceduresandcriminalpenalties.Thelawalsoestablishesaregimeforthe

protectionofthecriticalinformationinfrastructurethatenablesthedeliveryanduseofdigital

services.Further,asinthecaseofthepersonaldataandprivacylaw,aclearandeffective

cybercrimelawisaprerequisiteforestablishingRwandaasanattractivetargetfordigitalFDI.

Investors,particularlyinsoftwareandITservices,arelikelytofavourjurisdictionsinwhichthelegalframeworkprotectsagainstonlinecrimes.

Theseinstrumentswerecarefullyevaluatedduringtheprojecttoidentifypotentialmodifications

thatcouldhelpmeetRwanda’sgoalsrelatedto

digitalFDIanddigitalservices.Theprojectalso

consideredthecurrentcharacteristicsofRwanda’slegalandregulatoryframeworkthatdirectlyaffectdigitalFDI,including:

–Thelackofrestrictionsonforeignownershiporcontrol15

–Theprioritizationofinvestmentinsectorsincluding:

–ICTenterprises,businessprocessoutsourcingandfinancialservices

DigitalFDIInitiative:DigitalFDI-EnablingProjectinRwanda10

–ThemanufacturingofelectronicsandICTequipment

–Theconstructionofspecializedinnovationandindustrialparks

–Skillsdevelopment

–Value-addedtax(VAT)exemptionsonICTandITequipment16

–Theexistenceofaspecialeconomiczone(SEZ)regimethatprovidestaxationandlandaccess

benefits,includingformanufacturingbusinesses17

–Aprogrammeintendedtocreateincentivesformanufacturingthroughimportduty

andtaxreductionsformanufacturing

investmentsexceeding$1millionduringtheCOVID-19pandemic18

TrendsinRwanda’sdigitalFDI

1.2

Ahigh-levelanalysisofthelevels,trendsand

impactsofdigitalFDIinRwandaoverthepast

decadeprovidesusefulcontextandabaselineforeffortstoimprovedigitalFDIflows.Thisanalysis