20100823
reuters

KIGALI (Reuters) - Investment in Rwanda doubled to $1.6 billion in 2009, a year after the tiny central African country was named top global business reformer by the World Bank, a government official said on Monday.

Clare Akamanzi, chief operations officer at the Rwanda Development Board, said in a presentation that the country's foreign direct investment (FDI) in the four years to 2009 cumulatively totalled $118 million from $10 million in 2005 alone.

Reforms which won Rwanda the award included reducing the number of stages involved in registering a business from nine to one and halving the time needed to make land transfers.

"It is hard to measure the impact of these reforms, but the improved business environment is a major factor of these increments. It took us five years to register 7,000 companies and it is the same number of companies we registered in one year after Rwanda was named top global reformer," Akamanzi said.

She did not give a breakdown of the investments included in the figure which had doubled to $1.6 billion.

According to a World Bank report named Investment Climate Assessment, infrastructure costs such as transport and electricity were the main constraints to doing business, said Moses Kabirige, an analyst with the bank.

Over 70 percent of the firms in the country's manufacturing industry reported that inefficient electricity was the biggest hurdle. Fifty percent mentioned high tax rates and 40 percent cited transport and access to finance as among major hindrances.

According to the country's Ministry of Infrastructure only 9.5 percent of Rwandans have access to electricity. The government plans to increase that number to 16 percent in two years' time by increasing connections to 350,000 from 137,000.

State Minister for Energy Coletha Ruhamya said 21,000 new connections have already been added this year.

The Investment Climate Assessment study also found that the 1994 genocide in Rwanda and the ensuing exodus of people meant the country still faced a severe skills shortage and high labour costs.