Rwanda boosts SMEs in construction industry with incentives

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Rwanda boosts SMEs in construction industry with incentives

Rwanda has announced plan to ease cost of doing business for Small and Medium Enterprises in construction industry in the country a move that is expected to ultimately spur economic growth.
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Under the new plan, small construction companies will not incur costs related to geotechnical studies, environmental impact assessment and topographic surveys.

“We estimate that this will save contractors over 10% of their revenues,” says Louise Kanyonga, head of strategy and competitiveness at Rwanda Development Board.

In addition new businesses will not pay local government trading licenses within their first two years of operation.

Another key reform that has been initiated is ensuring power reliability. As Ms Kanyonga explains, companies seeking to invest in Africa have raised concerns on the reliability of electricity and is one of the key indicators in the to ease of doing business index.

“We have put in place an automated system to measure the frequency and duration of power outages to inform the utility and regulator on how best to improve reliability and quality of electricity.”

Thus, Rwanda Energy Group has built five more power substations in the country allowing the country to reduce duration of power outage from about 14 hours to 2 hours annually.

In an effort to improve the business environment, Rwanda has rolled out small claims procedure to help businesses easily settle corporate legal issues.

Under small claims procedure, cases are litigated between 20-30 days, maximum, at any primary court in the country, rather than seek litigation in commercial courts. Litigation in commercial courts can be lengthy taking years, and is expensive adds Ms Kanyonga.

Rwanda is one of the best preforming country in the World Bank Ease of Doing Business Index.

Two years ago the country introduced the use of a new digital system in construction that will be used in issuing and managing building permits.

The new digital system in construction dubbed electronic Building Permit Management Information System (eBPMIS) has made it easier and faster to process construction permit applications in the City of Kigali (CoK) and secondary cities around the country.

 

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