Good News Rwanda: Phase One of Kigali Economic Zone At 96 Per Cent Completion

Infrastructural developments in the area designated for the proposed Kigali Special Economic Zone (KSEZs) are nearing completion.

The zone, located in Gasabo District, will host the industrial park which is due for relocation from Gikondo in Kicukiro District, and other businesses.

A member of the task force in charge of the implementation of KSEZ Eng. Ejide Mukono, told The New Times that phases one and two of the zone cover a surface area of 277 hectares while the third phase will cover approximately 134 hectares.

“Phase one is at 96 per cent completion where infrastructural developments are in the final stages of completion, which includes tarmac roads, water and electricity rollout in all designated plots and a waste water treatment plant, are all in place,” he explained.

He stated that all construction and booking activities are being undertaken by the developer of the zone, Kigali Special Economic Zone Ltd. while regulation and licensing activities will be conducted by a newly created authority, the Special Economic Zone Authority of Rwanda (SEZAR), which will be based at the Rwanda Development Board.

“Kigali SEZ is the flagship SEZ project for Rwanda and will show the way for future SEZ projects,” he noted.

KSEZ is expected to be launched within the next few months according to officials.

KSEZ is a partnership between the government, Rwanda Development Bank (BRD), Rwanda Social Security Board (RSSB), insurance firm- SONARWA, Prime Holdings, MAGERWA and Bond Trading.

He disclosed that about 47 local and regional firms had already booked 60 percent of the land area in the zone.

In a bid to open more investment opportunities for the business community in the country and beyond, the country is currently focusing on the development of Special Economic Zones (SEZs) in different parts of the country.

SEZs will offer a business friendly operating environment as well as a favourable regulatory framework in a bid to streamline processes.

The main objective of the zones is to boost and diversify economic activity, create jobs, and increase investments in the country.

A policy towards the establishment of SEZs in the country was formulated and approved by the Cabinet in December 2009 and consequently, the law regulating them was enacted in January 2011 and three ministerial orders approved in December 2011.

The first ministerial order determines the structure, powers and functioning of the Rwanda Special Economic Zones Authority, the second determines license fee for Special Economic developers/ operators in Rwanda and a third determines the negative list for special economic zones in the country.

SEZs are parts of land in selected geographical areas provided with liberal economic laws, developed infrastructure and conducive business environment to foster economic growth.

They may include Free Ports, Free Trade Zones, Technology Parks, Tourism Parks, Information Technology Parks and other facilities.

SEZs are increasingly used as an economic policy tool worldwide.

Currently, KSEZ provides designated, serviced land for small and large scale industrial development, as well as reliable, quality infrastructure, competitive fiscal regulations and streamlined administration procedures.

Depending on the success of KSEZ’s, the government will develop more zones in Bugesera District around the area designated for the proposed international airport.

The project, also seeks to set up four provincial industrial parks in Huye, Nyabihu and Rusizi.

According to Zephanie Niyonkuru, a strategy expert at RDB, the zones will provide the opportunity to cluster anchor tenants with suppliers and other service providers, thereby creating jobs in skilled sectors and encouraging knowledge transfer.

“To a large extent, the success of an SEZ is determined by a careful framing of the policy choices on the development, operation and benefits of SEZs and the legal and institutional framework,” he observed.

“They have the ability to promote private investment, industry and export growth as they offer quality infrastructure, sleek business regulations and incentives to investors and businesses.”

Speaking to The New Times, Alexis Ruzibuka, the Director General in charge of SME’s and Industry at the Ministry of Trade and Industry, said that the zones will play a key role in the transformation of SME’s.

“In a special economic zone, every firm is eligible for a 15 per cent income tax incentive which boosts the growth of companies,” he noted.

“The zones have the potential to attract well established firms in the region which will promote the country’s economic growth in terms of import substitution and export promotion strategies.”

Ruzibuka observed that SME’s in the country face a challenge of access to markets, finance and technology transfer but with the development of SEZ’s, they would get market opportunities from bigger firms within the region through forward and backward linkages.

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