Sub-Plan for….

Foreign Direct Investment (FDI) Drive in ICTs

Relevant Vision for Rwanda (VfR) Mission Strategies

• To promote and encourage the deployment and utilization of ICTs within the economy and society.
  
• To improve the information and communications infrastructure of Rwanda.

Relevant Government Policy Commitments

The Government is committed to: improving communication facilities and to diversifying the means of access through the utilization of appropriate telecommunications systems. The Government as part of its strategy and commitment to increasing access to telecommunication facilities; facilitating the rehabilitation and strengthening of telecommunication and communication facilities, is also committed to liberalizing the telecommunications and communications sector to encourage investment and competition in the sector.

Key Players

Government and the Private Sector as the lead Players

Programme

FDI-1: The Foreign Direct Investment (FDI) Promotion Study Initiative

Relevant SUNRISE Component

Type and Scope of Programme

Implementation Details Requirements

Programme Ownership

• To create the condition for attracting foreign investment and joint ventures to support the development of the local ICT industry
  
• To facilitate the mobilization of the necessary financial and other technological resources through Foreign Direct Investment (FDI) and Domestic investment to aid the socio-economic development process in Rwanda.

Programme-Specific Goals

• To carry out a comprehensive study to establish Rwanda’s potential and capacity to attract foreign direct investment to develop and expand the local ICT service sector and industry
  
• To implement specific recommendations as to how best Rwanda can tackle and overcome barriers to attracting FDI and specifically promote Rwanda as a regional destination for ICT Foreign Direct Investment

Plan-Specific Actions

Plan-Action Prerequisites and Linkages

Time-Bound Measurable Targets

Plan-Action Implementation Agency

• Market Size and Per Capita Income

• Market Growth

• Access to Regional and Global Markets

• Structure of Markets

• Access to Raw Materials

• Low-Cost Unskilled Labor and Skilled Labor (all areas)

• The ICT Human Resource Base

• Technology and Innovative Capacity

• Marketing Networks

• Communications Infrastructure

• Physical Infrastructure (Ports, Roads, Power, Telecommunications)

• Input Costs (Transport and Communication to/from and within Country, Costs of Intermediate Goods)

• Membership in Regional Integration Frameworks

Non

RIPA to commission and complete the FDI Study-1 by 2001

RIPA

FDI Study-2: Commission a Report to draw on the findings of FDI Study-1 to make specific recommendations as to how best Rwanda can tackle and overcome the identified barriers to attracting FDI and specifically promote Rwanda as a regional destination for ICT Foreign Direct Investment

Non

RIPA to commission and complete the FDI Study-2 Report by early 2002

RIPA

Non

RIPA in collaboration with relevant Public and Private Sector Agencies to implement the recommendations of the FDI Study- 2 Report by 2002

RIPA in collaboration with relevant Public and Private Sector Agencies

Programme

FDI-2: Export Processing and Free Zone (EPfZ) Initiatives targeted at both domestic and foreign ICT producers and service providers

Relevant SUNRISE Component

Type and Scope of Programme

Implementation Details Requirements

Programme Ownership

• To facilitate the development of the service sector into the business service hub of the region through the deployment and exploitation of ICTs
  
• To support the development and the growth of the ICT industry to facilitate the production, distribution and provision of ICT products, goods and services
  
• To promote and facilitate the role of the private sector in the development and participation in the ICT industry and service sector.

Programme-Specific Goals

• To promote the development a competitive ICT export sector with the active participation of local producers and service providers.
  
• To support the private sector in the development and production of ICT products and services for the domestic market and for export
  
• To promote, encourage and facilitate the active participation of foreign investors in the local ICT industry and service sector and in the development the ICT export sector
  
• To promote joint ventures between local and foreign companies to facilitate the rapid development of the ICT industry and service sector
  
• To develop the local software development and ICT service provision sector
  
• To develop the local computer hardware assembly, repair and maintenance industry
  
• To encourage the creation of quality jobs in ICT-related areas
  
• To actively promote foreign investment in the ICT industry and service sector to speed up the process of job creation and knowledge transfer.

Plan-Specific Actions

Plan-Action Prerequisites and Linkages

Time-Bound Measurable Targets

Plan-Action Implementation Agency

F2.1

Develop a comprehensive fast-track programme for the creation of location-independent Export Processing and Free Zones (EPfZs) through-out the country targeted at the development, production, distribution and provision of ICT products, goods and services mainly for the export market

Non

Develop a comprehensive fast-track programme for the creation of EPfZs for ICTs by 2001

Rwanda Investment Promotion Authority (RIPA)

Develop and implement specific incentive programmes (tax holidays, investment incentives, grants, loans etc) targeted at encouraging the participation of local businesses and institutions in the EPfZs

Non

Implement in the 2001/2002 Budget and other subsequent Budgets (within NICI-2005 time-frame) special EPfZ promotion incentive programmes targeted at the domestic investor

Ministry of Finance and Economic Planning

F2.3

Develop and implement specially-targeted incentive packages (grants to SMEs) to promote the development of ICT products within the EPfZs for the export market

Non

Implement in the 2001/2002 Budget and other subsequent Budgets (within NICI-2005 time-frame) special EPfZ promotion incentive programmes (grants to SMEs) targeted encouraging ICT production for export

Develop and implement specific incentive programmes (tax holidays, investment incentives, grants, loans etc) to attract World-Class ICT companies to operate in the EPfZs

Non

Target to attract a number of smaller and medium size computer companies per year during the time-frame of NICI-2005

Rwanda Investment Promotion Authority (RIPA)

Mount a national publicity drive and public awareness campaign to promote and sell the Rwandan ‘EPfZ for ICTs’ Programme locally and in the sub-region through the electronic and print media and trade magazines.

Non

Implement an initiative to publicize the Rwandan ‘EPfZ for ICTs’ Programme locally and the sub-regional market by 2001

The Rwanda Investment Promotion Authority (RIPA)

Promote and market the Rwandan ‘EPfZ for ICTs’ Programme internationally on the Web, at Trade Fairs, Foreign Mission and in the international mass media

Non

Develop and implement an initiative to extensively publicize and market the Rwandan ‘EPfZ for ICTs’ Programme internationally by 2001

The Rwanda Investment Promotion Authority (RIPA)

Programme

FDI-3: Initiative to Promote Rwanda as a Competitive Destination for FDI in ICTs

Relevant SUNRISE Component

Type and Scope of Programme

Implementation Details Requirements

Programme Ownership

• To create the condition for attracting foreign investment and joint ventures to support the development of the local ICT industry
  
• To facilitating the mobilization of the necessary financial and other technological resources through Foreign Direct Investment (FDI) and Domestic investment to aid the socio-economic development process in Rwanda.

Programme-Specific Goals

• To promote internationally foreign direct investment opportunities in Rwanda
  
• To promote Rwanda as a suitable regional hub for ICT-enabled Services

Plan-Specific Actions

Plan-Action Prerequisites and Linkages

Time-Bound Measurable Targets

Plan-Action Implementation Agency

RIPA in collaboration with Ministry of Foreign Affairs to launch and implement an Initiative to promote software development and other Export Processing and Free Zones (EPfZs) opportunities in Rwanda via the Rwanda Foreign and Trade Missions

F2.1

Ministry of Foreign Affairs and Regional Cooperation

Implement a Programme to set up a special Trade Fair Promotion Division within RIPA with special responsibilities for promoting investment opportunities and the EPfZ for ICTs initiative at international trade fairs and other trade and investment promotion meetings in the region and internationally

F5.5

Private Sector Federation

Launch an initiative aimed at positioning and promoting Rwanda as a regional hub for ICT-enabled Services

Non

Implement Initiative by 2002

RIPA

Programme

FDI-4: Initiatives to attract foreign and domestic investment to facilitate rapid infrastructure development and expansion

Relevant SUNRISE Component

Type and Scope of Programme

Implementation Details Requirements

Programme Ownership

Ministry of Transport, Public Works and Communications

• To promote and facilitate modern physical infrastructure development, expansion and upgrade in areas like: roads and general utilities; social infrastructure; telecommunications and communication infrastructure.

Programme-Specific Goals

• To liberalize the telecommunications and communications sector to encourage investment and competition in the sector.

Plan-Specific Actions

Plan-Action Prerequisites and Linkages

Time-Bound Measurable Targets

Plan-Action Implementation Agency

F4.1

Develop and implement a comprehensive programme to promote domestic investment and attract foreign capital, and joint ventures to support the rapid development of the ICT infrastructure

Non

Target attracting $700 million foreign investment into ICT infrastructure development by 2005

Rwandan Investment Promotion Authority (RIPA)

F4.2

Put in place a programme to facilitate the process of rapid acquisition of licenses and authorizations to install and operate communication equipment and systems as well as for providing communication-related services

Non

Implement programme throughout the NICI-2005 time frame.

Ministry of Transport, Public Works and Communications in collaboration with RIPA

F4.3

Put in place and implement a programme to facilitate conditions for an investor friendly telecommunications environment

Non

Implement programme during NICI-2005 time frame

Ministry of Transport, Public Works and Communications

F4.4

Develop and implement a programme to facilitate the development of local communications industry towards competitiveness

Non

Target achieving during the time frame of NICI-2005 an annual increase of at least 155 in the number of companies operating in each of the sectors of the industry

Rwandan Investment Promotion Authority (RIPA)

Programme

FDI-5: Special Foreign Direct Investment (FDI) and Export Promotion Initiatives

Relevant SUNRISE Component

Type and Scope of Programme

Implementation Details Requirements

Programme Ownership

• To create the condition for attracting foreign investment and joint ventures to support the development of the local ICT industry
  
• To facilitate the mobilization of the necessary financial and other technological resources through Foreign Direct Investment (FDI) and Domestic investment to aid the socio-economic development process in Rwanda.
  
• To promote and facilitate trade and commerce

Programme-Specific Goals

• To promote and facilitate investment and trade
  
• To develop Web-presence for the promotion and facilitation of investment, trade and exports

Plan-Specific Actions

Plan-Action Prerequisites and Linkages

Time-Bound Measurable Targets

Plan-Action Implementation Agency

Note: This Center is to be set-up at RIPA Headquarters in Kigali to provide Investment Gateway services and other facilitation services to potential investors. The Center, which will eventually be linked to GOV-NeT, will among other things serve as a one-stop shop for information on investment opportunities in Rwanda and for access to the various investments related services provided by Government Ministries and PSOs.

Non

RIPA to set-up the One-Stop Investment Facilitation Center by 2001

RIPA

Note: This Virtual One-Stop Investment Web-site is to be developed, hosted and maintained by the ITSD of RIPA. It will provide the same services as the Physical One-Stop Investment Facilitation Center. It will serve an Investment Promotion Site as well as provide investment gateway services and facilitation services to potential investors online. It will be possible for investors to access information on investment opportunities in Rwanda on this Web-site and make inquires for additional information and facilitation services via the site. This Virtual One-Stop Site is likely to serve as the first port of call for most potential foreign investors.

Non

Note: The setting up of the Virtual One-Stop Investment Promotion and Facilitation Site will take priority over the setting-up of the Physical One-Stop Investment Facilitation Center at RIPA Headquarters

RIPA

Note: RIPA now serves as both the Investment Promotion and Export Promotion Agency. The possibility of creating a separate Export Promotion Agency at a later date is to be considered. This separation will enable RIPA to focus more on Investment Promotion and Facilitation.

Non

The Ministry of Commerce, Industry and Tourism to consider the possibility of setting up REPA and if possible set-up it up by 2005

Ministry of Commerce, Industry and Tourism

Note: A number of these Centers will be at locations throughout the country to vigorously promote the need to produce for export and to serve as Rapid Response Facilitation Centers for assisting local exporters. These Centers will be set-up at all the major Export Processing and Free Zones (EPfZs) as well as at each of the major regional capitals.

Non

Set-up Branches of the One-Stop Export Promotion and Facilitation Center at other suitable locations throughout the country by 2005

RIPA in collaboration with the Ministry of Commerce, Industry and Tourism

Note: The Virtual Trade Fair Site is to be developed, hosted and maintained by the ITSD of RIPA. It will serve as an online facility for promoting Rwandan goods and services on the Internet. Local Rwandan companies including SMEs from all sectors of the economy will be able to either link their Web-sites to the Virtual Trade Fair Site or host a store-front at the site to promote their goods and services. In addition to promoting Rwandan goods and services, the site will also provide e-commerce (business-to-consumer, business-to-business, and business-to-government) and e-trade facilitation services to Rwandan companies planing to do business on the Internet.

PSR-5

RIPA in collaboration with the Ministry of Commerce, Industry and Tourism and the Private Sector Federation to set up the Virtual Trade Fair Site by 2002

Private Sector Federation

Note: The Virtual Tourism Promotion and Facilitation Web-Site will be developed, hosted and maintained by the ITSD of ORTPN. This site (just like the TPIS as per C4.6) will provide online access to tourism information including details of tourist spots; game parks; hotels and lodges in various parts of the country; health information; travel information (air, road and lake) and other information that will be required to promote and facilitate tourism in Rwanda. The site will provide links to all Rwandan Hotel Web-sites as well as sites of other Tourist Facilitation Agencies. The site will also provide advance reservation and booking facilities for hotels, national park tours, car rental etc. It will also provide one-line facilities for making tourist visa applications to be forwarded to the Rwandan Immigration Service for processing.

C4.6

ORTPN to set-up the Virtual Tourism Promotion and Facilitation Site by 2001

ORTPN

Possible Contributions to the Realization of the GOR’s Multi-Sectoral Economic Development Policy

The promotion of FDI Drive in ICTs which is central to the programmes and initiatives identified for implementation under this Sub-Plan will be directly contributing to the development of the service and the industrial sector and indirectly (and in a limited way) to the development of the agricultural sector. More importantly it is envisaged that the multiplier effect of the development of the ICT sub-sectors of the service sector and the industrial sector in the entire economy will in the long-run, contribute towards the realization of the GOR’s multi-sectoral economic development policy.

Areas of Emphasis as per the ICT-2020 Policy

On the whole, the FDI Drive in ICTs Sub-Plan will contribute to the realization of the GOR’s policy goal to simultaneously pursue both ICT exploitation and production policy involving: the utilization and exploitation of ICTs to support the delivery of government services and the activities of various sectors of the economy as well as the production, development and delivery of ICT products and services ---- i.e. towards the development and promotion of an ICT industry and service sector.

The Risk Factors

As in the case of the ICT Infrastructure Development Sub-Plan, a possible risk factor as per the implementation of the programmes and initiatives of the FDI Drive in ICTs Sub-Plan relates to the possibility of Rwanda failing to attract substantial quality FDI in ICTs after the Government have done all that it can in providing costly (in terms ‘revenue-forgone’) tax incentives and packages to attract investors. In the event that this happens, not only will there be that risk of revenue lost (actual cost and opportunity cost) but also Rwanda will run the risk of delaying its advancement in the area of ICTs and this will undoubtedly have an adverse impact on the implementation of some of the other Sub-Plans of the NICI-2005 Plan and on the economy as a whole.