Rwanda is the fifth-best destination for
investment in the world, according the 2013 Baseline Profitability
Index. The ranking is topped by Hong Kong, with Botswana in second, and
Ghana (10th), as the only other African country in the Top 10. Uganda
(15) and Kenya (67) are the only EAC countries on the list.
High returns of investment are accessible and to a great degree,
retrievable to investors in Rwanda, according to latest global report.
The Baseline Profitability Index (BPI), by the Foreign Policy
Magazine, published on Monday, ranked Rwanda among the top 10 countries
for investment in the world.
Rwanda is in fifth position with 1.18 BPI value out of 102 countries surveyed across the world.
The index puts Hong Kong in the first position with 1.23 BPI value,
followed by Botswana (1.22). Taiwan (1.21), and Singapore (1.19) , third
and fourth, respectively, complete the top four positions ahead of
Rwanda.
The report says for the first time, the BPI index takes into account to suggest attractive places in the world to invest in.
“Hong Kong and Singapore, which regularly top indexes like the World
Bank’s Doing Business rankings and the World Economic Forum’s Global
Competitiveness Report, take two of the first four spots in the BPI. But
three of the top 10 are African countries–Botswana, Rwanda, and Ghana,”
reads part of the report.
The BPI ranks countries by their overall attractiveness as targets
for a generic foreign investment and offers a better idea of how far
countries are from each other.
The countries are ranked by the three main components of the index:
asset growth, preservation of value, and repatriation of capital.
Countries whose currencies are expected to appreciate rank higher for
repatriation of capital, all other things equal. The time horizon
predicted for investment is five years.
“This ranking is encouraging. It is a result of extensive efforts by
government to continuously provide an investor-friendly climate and
improve service delivery, in order to make Rwanda an even more
attractive destination for both domestic and foreign investments,”
Rwanda Development Board acting Chief Operating Officer, Tony
Nsanganira, told The New Times yesterday.
Feasible investment
According to Zulfat Mukarubega, the proprietor of Rwanda Tourism
University College, investing in the country is worthwhile because the
climate is conducive to both local and foreign investors.
“The government supports the growth of the private sector through
attracting and facilitating investments. We are comfortable investing in
this country and our investment returns are feasible,” she said.
Patrick Sebatigita, the chief executive officer of Ujenge, a real
estate and construction company, also said Rwanda has put in place
mechanisms to guarantee favourable climate for investment.
“We have been in real estate investment for the last two years but
when we compare Rwanda with other countries where we have invest, the
country is still the best place to do business. We don’t regret
investing in Rwanda,” he said.
However, according to the report, the BPI is not the final word on
where to invest; it only offers simple summary statistics to investors
who have no time to research all of the102 markets surveyed.
The ranking team say difficulties of doing business in countries
well-known for rapid economic growth such as China, South Africa and
India can cut into foreign investor’s return.
India ranks seventh in the BPI, China 21, and South Africa 41.
The survey says when investors are looking for high returns in
emerging markets, they do not pay enough attention to factors such as
conflict and corruption.
Impact of policies
The BPI compares how local policies and conditions would affect
similar investment in different countries and assumes that the investor
reinvests the asset’s returns during the five-year period, then sells
the asset and brings all the money home.
The recent ‘Doing Business Report 2013’ on East Africa Community
partner countries ranked Rwanda as the easiest country in the region to
start a business.
Rwanda has been on several occasions positioned as the most reformed
country and a place to do business by the World Bank’s Doing Business
Report 2013.
Last year, the World Bank survey ranked Rwanda in 52nd position out of 185 economies for doing business.
The country, last year, implemented nine new reforms out of 10
indicators. It also zeroed on areas where it did not perform well, such
as resolving insolvencies and issuing construction permits.
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