OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY IN RWANDA - FACT PACK 2017 Business Sweden in Eastern Africa - Business ...
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OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY IN RWANDA FACT PACK 2017 Business Sweden in Eastern Africa
SINCE 2000, REAL GDP HAS GROWN BY ALMOST 8% PER
YEAR IN RWANDA PARTLY DRIVEN BY CONSTRUCTION
7.1% of Rwanda’s GDP
Large
infrastructure
upgrades
Improved
business
climate
USD 546mn in 2015
Driven by government investments in
Substantial Increased infrastructure, increased foreign direct investment
housing foreign and urbanisation
deficit investments
Second best business climate in Africa,
40+ reforms have been implemented the last decade
SOURCE: EURO MONITOR INTERNATIONAL, BUSINESS MONITOR, CREDITS: CECILIA LARSSON
LANTZ/IMAGEBANK.SWEDEN.SE, SOFIA SABEL/IMAGEBANK.SWEDEN.SE
BUSINESS SWEDEN 21 APRIL, 2017 2RWANDA’S CONSTRUCTION INDUSTRY IS DYNAMIC AND
OFFERS OPPORTUNITIES IN NUMEROUS SUBSECTORS
Non Residential Consulting
residential construction and project
construction management
Construction of commercial Development of affordable Establishment of training centres for
complexes, office buildings, housing solutions architects and engineers
shopping malls, entertainment High-end market housing Feasibility studies for large
centers and sports centers developments construction projects
Development of industrial parks,
special economic zones and Project management of large
warehousing facilities construction projects
RESIDENTIAL AND NON-RESIDENTIAL CONSTRUCTION AS WELL AS CONSULTING PRESENTS OPPORTUNITIES FOR SWEDISH COMPANIES
SOURCE: BUSINESS SWEDEN ANALYSIS, RWANDA DEVELOPMENT BOARD, CREDITS: CECILIA LARSSON
LANTZ/IMAGEBANK.SWEDEN.SE, SOFIA SABEL/IMAGEBANK.SWEDEN.SE
BUSINESS SWEDEN 21 APRIL, 2017 3RWANDA’S VISION 2020 FOCUSES ON AREAS THAT ARE
IMPORTANT FOR GROWTH IN CONSTRUCTION
Rwanda Vision 2020
Rwanda’s long term development goals are embedded in the Vision 2020. The objective is to transform the economy
into a knowledge based, service oriented economy with middle-income status by 2020
The plan is centered around six pillars with three cross-cutting issues
The focus on infrastructure development, the private sector as well as human resource development are important
growth drivers for the construction industry
Gender equality
Protection of the environment and sustainable
resource management
Science and technology, including ICT
Human
resource
Good Productive and Regional and
development A private
Pillars
governance Infrastructure market- international
and sector-led
and a capable development oriented economic
knowledge- economy
state agriculture integration
based
economy
VISION 2020’S FOCUS AREAS HAVE BOOSTED GROWTH IN CONSTRUCTION IN RWANDA
SOURCES: MINISTRY OF FINANCE AND PLANNING, RWANDA DEVELOPMENT BOARD
BUSINESS SWEDEN 21 APRIL, 2017 4RWANDA’S VISION 2050 WILL PUT EMPHASIS ON
IMPROVING LIVING STANDARDS
Rwanda Vision 2050*
As the year of 2020 is Including universal access to smart
approaching, The Ministry of Quality of Life housing with high speed internet
Finance and Planning has given
an indication of the direction of
Rwanda’s Vision 2050 Modern and SMART cities, (optimal
Modern Infrastructure and
space utilization and connected cities)
According to the Ministry, Vision Livelihoods
2050 will be about ensuring high
standards of living for the people
of Rwanda Increased productivity and
Transformation for Prosperity competitiveness, construction is one
To the main focus areas will be
priority sector
Quality of Life, Modern
Infrastructure, Productivity and
Increased regional integration and
Competitiveness as well as International Cooperation and
continuous international public and
International Cooperation Positioning
private partnerships
THE INCREASED FOCUS ON MODERN HOUSING AND INFRASTRUCTURE WILL PRESENT OPPORTUNITIES IN CONSTRUCTION
SOURCES: MINISTRY OF FINANCE AND PLANNING *NOT FINALISED, SUBJECT TO CHANGE
BUSINESS SWEDEN 21 APRIL, 2017 5THE CONSTRUCTION SECTOR IS THE FASTEST GROWING
INDUSTRY SECTOR ACCOUNTING FOR 7.1% OF GDP
GDP CONTRIBUTION BY SECTOR (%) 2015 INDUSTRIAL GDP CONTRIBUTION BY ACTIVITY (%) 2015
Mining
10%
Services Other
47% 6%
Industry
14% Manufacturing
Construction
51% 34%
Agriculture
Forestry &
Fishing Other
33% 5%
Between 2010-2015, the industry sector grew on The construction sector accounted for majority of the
average 9.3% annually, outperforming the overall industry growth, reporting 12.8% average annual growth
economy at 7% in 2010-2015
THE CONSTRUCTION INDUSTRY IS IMPORTANT FOR THE COUNTRY’S ECONOMIC DEVELOPMENT
SOURCES: NATIONAL INSTITUTE OF STATISTICS RWANDA
BUSINESS SWEDEN 21 APRIL, 2017 6RWANDA IS A SMALL MARKET COMPARED TO REGIONAL
PEERS, BUT GROWS SECOND FASTEST IN SSA*
CONSTRUCTION INDUSTRY VALUE FORECAST MAIN GROWTH DRIVERS
Current USD billion Compared to regional peers, Rwanda’s construction
industry is still relatively small
1,2 However, Rwanda’s construction industry is expected to
1,0 grow by 9% CAGR until 2021, which is the second fastest
6,0 growth rate in whole Sub-Saharan Africa. Ahead of
0,9 Rwanda is Ethiopia with growth at 9.9%. Following
5,4
0,8 Rwanda is Tanzania (8.5%) and Cameroon (7.9%)
4,9
0,7 11,9 The government’s push to transform Rwanda to a
4,3
10,4 knowledge-based and service oriented economy has
3,8 9,1 driven investment in power, transport and ICT
8,0 infrastructure, which has spurred growth in construction
7,1
Rwanda’s government promotes foreign investment, which
13,9 15,8 has facilitated significant financial inflow from international
10,1 12,0
8,3 governments and development banks as well as
international private investors to the sector
2017f 2018f 2019f 2020f 2021f Future growth will be driven by on-going government
investments in infrastructure, increased urbanisation and
Ethiopia Tanzania Kenya Rwanda continuous private and public construction works
INFRASTRUCTURE UPGRADES, INCREASED URBANISATION AND PRIVATE AND PUBLIC DEVELOPMENT WILL DRIVE FUTURE GROWTH
SOURCES: BUSINESS MONITOR INTERNATIONAL *SUB-SAHARAN AFRICA
BUSINESS SWEDEN 21 APRIL, 2017 7RWANDA PROMOTES THE CONSTRUCTION INDUSTRY
AND HAS THE 2ND BEST BUSINESS CLIMATE IN AFRICA
EASE OF DOING BUSINESS 2016* BUSINESS CLIMATE AND REGULATIONS
The last decade, 47 reforms have been implemented to
improve the business climate in Rwanda
Uganda China The government has also issued special incentives to
(115) (78) foreign companies setting-up in Rwanda, including:
Corporate tax exemption for companies relocating
headquarters to Rwanda
South Sudan Tanzania Kenya Rwanda 15% corporate income tax for selected sectors, including
(186) (132) (92) (56) affordable housing
Accelerated depreciation of 50% for priority sectors,
190 150 100 5 including construction
Angola South Africa 0 Sweden
Fast processing time for company registrations
(182) (74) (9)
Ease of obtaining work permits
Ethiopia Zambia Botswana The government has streamlined the construction process:
(159) (98) (71) Permits can be obtained within 20 days
Property registration within 32 days (region avg. 47 days)
Cost to register property is 0.10% of property value
= improving rank = deteriorating rank (regional avg. 2.9%)
RWANDA’S GOVERNMENT MAKES IT FAVOURABLE FOR FOREIGN COMPANIES TO INVEST IN CONSTRUCTION
SOURCE: RWANDA DEVELOPMENT BOARD, GOVERNMENT OF THE REPUBLIC OF RWANDA *RANK 1-190: THE LIGHTER THE SHADE OF BLUE, THE EASIER TO DO BUSINESS
BUSINESS SWEDEN 21 APRIL, 2017 8THE FAST GROWING URBANISATION WILL CREATE
SUBSTANTIAL DEMAND FOR HOUSING IN RWANDA
URBANISATION AND HOUSING IN RWANDA URBAN POPULATION 2012 & 2020 SECONDARY CITIES
With an urbanisation rate of 29% in 2015, Rwanda is
one of the least urbanised countries in the world 149K 420K 102K 236K 48K 132K
However, the urban population is growing fast (5.9% RUBAVU MUSANZE NYAGATARE
annually), above average in Sub-Saharan Africa (4.2%)
and globally (2.1%), which pressures housing supply
Only in the capital Kigali 344,000 new units will be
required in by 2022, an increase of 200% MUHANGA
To off-load the pressure on Kigali and to support 51K 112K
economic activity around the country, six secondary
cities are promoted for urban growth
To promote urbanisation in these cities the government RUSIZI HUYE
will invest heavily in the road network, water, electricity,
tourism development, schools and health centers 63K 137K 53K 104K
In these cities, green building is the guiding principle
for growth which presents opportunities for innovative
construction Urban population in 2012
Expected urban population in 2020
BOTH RESIDENTIAL AND NON-RESIDENTIAL CONSTRUCTION WILL BE REQUIRED FOR THE GROWING POPULATION IN RWANDA’S CITIES
SOURCES: RWANDA DEVELOPMENT BOARD, RWANDA URBAN POLICY STRATEGY 2015, SOURCES, CENTRE
FOR AFFORDABLE HOUSING AFRICA
BUSINESS SWEDEN 21 APRIL, 2017 9NON-RESIDENTIAL CONSTRUCTION REMAINS
ATTRACTIVE, SEVERAL DEVELOPMENTS IN PIPELINE
FOREIGN DIRECT INVESTMENT 2011-2015 NON-RESIDENTIAL CONSTRUCTION
Current USD Million The growth in foreign investments has driven demand for
high-end office spaces in Kigali and the private sector has
323 developed several large-scale mixed-use developments
292 Eris Property Group, Habi Ltd and Fusion Capital are
258 currently the main players in Rwanda’s property
development market
The potential for return on investment is deemed high due
to high monthly rentals in Kigali
160
Until recently, The Union Trade Centre was the only
relatively modern shopping centre in Kigali but as of Dec
106 2016, CHIC Complex in Muhima is Rwanda’s largest mall
Due to a limited retail offering and increased spending per
capita, several developers have tapped into the retail sector
and a number of developments are in the pipeline, including
Uchumi Remera Mall, MIC Commercial Complex and
Ambarembo City Center
2011 2012 2013 2014 2015
GROWTH IN FOREIGN INVESTMENTS AND CONSUMER SPENDING WILL DRIVE FURTHER DEMAND FOR COMMERCIAL DEVELOPMENT
SOURCES: DELOITTE, RWANDA DEVELOPMENT BOARD, PWC, WORLD BANK
BUSINESS SWEDEN 21 APRIL, 2017 10BUSINESS SWEDEN IN EA CAN ASSIST YOU FURTHER
FROM STRATEGIC ADVICE TO HANDS-ON ESTABLISHMENT SUPPORT
Our team in Eastern Africa
Robin Theresa Julia Brenda Anna-Paula Juliet Niclas Meshack Olive
Business Sweden’s assignment is to facilitate for Swedish companies to grow
internationally and for foreign investors to invest in Sweden
NAIROBI
We promote Sweden as an attractive, innovative and competitive business partner. An
important part is to support Swedish companies in reaching export markets with their
products and services
We are jointly owned by the Swedish government and the private sector, represented
by the Ministry for Foreign Affairs and the Swedish Foreign Trade Association
Business Sweden offers a variety of consultancy services, for example the following:
Market Analysis Business Support Visiting Programme Recruitment
Deepen your knowledge We offer office space and Searching and visiting We support in finding and
on local market dynamics administrative support on relevant partners, e.g. recruiting the right local
in your sector the ground distributors representatives
BUSINESS SWEDEN 21 APRIL, 2017 11CONTACT US BUSINESS SWEDEN IN KENYA Business Sweden Eden Square, 3rd floor, off Westlands road Box 13799, 00800 Nairobi T +254 20 3749760 kenya@business-sweden.se www.business-sweden.se/kenya BUSINESS SWEDEN 21 APRIL, 2017 12
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