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PP RUEHWEB

DE RUEHLGB #0015/01 0131217
ZNR UUUUU ZZH
P 131217Z JAN 09
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC PRIORITY 5823
INFO RUEHDS/AMEMBASSY ADDIS ABABA 0223
RUEHBS/AMEMBASSY BRUSSELS 0368
RUEHJB/AMEMBASSY BUJUMBURA 0467
RUEHDR/AMEMBASSY DAR ES SALAAM 1281
RUEHKM/AMEMBASSY KAMPALA 2057
RUEHKI/AMEMBASSY KINSHASA 0609
RUEHLO/AMEMBASSY LONDON 0381
RUEHNR/AMEMBASSY NAIROBI 1389
RUEHFR/AMEMBASSY PARIS 0643
RUCPDOC/USDOC WASHDC
RUCPCIM/CIMS NTDB WASHDC

UNCLAS KIGALI 000015 
 
SENSITIVE 
SIPDIS 
 
STATE FOR OFFICE OF INVESTMENT AFFAIRS EB/IFD/OIA 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD PGOV KIDE OPIC KTDB USTR
RW 
SUBJECT: RWANDA INVESTMENT CLIMATE STATEMENT 2009 
 
REF: STATE 123907 
 
¶1. (U) This cable responds to queries in reftel 
 
 
¶2. (U) OPENNESS TO FOREIGN INVESTMENT 
       ------------------------------ 
 
-- The Government of Rwanda recognizes the private sector is 
an essential engine of development and welcomes foreign 
investment in policy and in practice. 
 
-- In September 2008, the Rwanda Development Board (RDB) was 
established to fast track development projects and facilitate 
new investment.  RDB consolidates several government agencies 
previously involved in promoting investment including the 
Rwanda Investment and Export Promotion Agency (RIEPA), the 
Rwanda Commercial Registration Service Agency (RCRSA), the 
Human Resource and Institutional Capacity Development Agency 
(HIDA), the Rwanda Information and Technology Agency (RITA) 
and the Rwanda Office of Tourism and National Parks (ORTPN). 
 
 
-- The establishment of RDB builds on the investment law of 
March 2006 which assists investors in obtaining necessary 
licenses, visas, work permits, and tax incentives and which 
remains in full force.  The law provides permanent residence 
and access to land for investors who deposit USD 500,000 in a 
commercial bank in Rwanda for a period not less than six 
months.  This law also fixes the minimum initial capital 
investment requirement for foreign investors at USD 250,000 
to qualify for tax and other investment incentives. 
 
-- In 2007, RIEPA (now RDB) claimed to have registered 23 
foreign investment projects valued at USD 229 million. 
However, of the 23 projects registered in 2007, only 9 
projects successfully began operations or merged with local 
companies. 
 
-- No statutory limits on foreign ownership or control exist, 
and there is no official economic or industrial strategy that 
has discriminatory effects on foreign investors. 
 
-- Rwanda,s legal investment infrastructure is still being 
developed.  Specialized commercial courts began operations in 
May 2008, but have only just started to address the backlog 
of cases.  A business law reform commission is drafting new 
commercial legislation to facilitate investment and improve 
the business climate.  Laws under consideration include 
protection of intellectual property, updated contract law, 
bankruptcy regulations and arbitration law. 
 
-- While there is no mandatory screening of foreign 
investment, the RDB does evaluate business plans of investors 
seeking tax incentives to record incoming foreign investment 
and to better allocate investment incentives to qualified 
foreign investors. 
 
-- The government encourages foreign investment through 
outreach and tax incentives.  The only difference in 
treatment between foreign and domestic companies is the 
initial capital requirement for official registration 
(registration is not mandatory) ) USD 250,000 for foreign 
investors; USD 100,000 for domestic investors.  There are no 
reports of foreign investors declining to invest due to these 
differing treatments.  Foreign investors can start a new 
business irrespective of the initial capital requirement. 
 
-- Foreign investors can acquire real estate, but there is a 
general limit on land ownership.  Although land is owned by 
Qgeneral limit on land ownership.  Although land is owned by 
the state, both foreign and local investors can acquire land 
through lease-hold agreements that extend from 50 to 99 
years. 
 
-- The Government of Rwanda established the Privatization 
Secretariat and the National Tender Board to ensure 
transparency in government tenders and divestment of 
state-owned enterprises. 
 
-- The law establishing the RDB provides investors with a 
&one-stop8 investment services center.  Additionally, RDB 
organizes investment conferences, both in Rwanda and abroad, 
to attract foreign investment.  RDB directors and local 
businesses regularly join Rwandan President Paul Kagame in 
overseas tours to attract foreign investors.  RDB assists 
potential investors in securing all required approvals, 
certificates, land for their projects, work permits, and tax 
incentives.  No discrimination has been reported against 
foreign investors who pass through RDB.  Legally, foreign 
firms are treated equally with regards to taxes, access to 
licenses, approvals, and procurement.  However, during 2008 
some foreign investors asserted unequal treatment for foreign 
companies versus domestic firms on tax enforcement. 
 
-- There are no laws requiring private firms to adopt 
articles of incorporation or association which limit or 
prohibit foreign investment, participation, or control. 
 
 
¶3. (U) CONVERSION AND TRANSFER POLICIES 
       -------------------------------- 
 
-- There is no difficulty obtaining foreign exchange, or 
transferring funds associated with an investment into a 
freely usable currency and at a legal market clearing rate. 
In 1995, the Government of Rwanda established a 
market-determined exchange rate system under which all 
lending and deposit interest rates were liberalized.  The 
Central Bank holds daily foreign exchange sales freely 
accessed by commercial banks. 
 
-- Investors can remit payments only through authorized 
commercial banks. There is no limit on the inflow of funds, 
but justification for all transfers over USD 20,000 is 
required by the Central Bank to facilitate the oversight of 
potential money laundering.   Additionally, there are some 
restrictions on the outflow of export earnings.  Export 
earnings generally must be repatriated within three months 
after the goods cross the border.  Tea proceeds must be 
deposited after the auction in Mombassa.  Repatriated export 
earnings deposited in commercial banks must match the exact 
declaration the exporter used crossing the border. 
Justifications are required to transfer more than USD 20,000 
per year from Rwandan commercial banks.  Rwandans working 
overseas can freely make remittances to their home country. 
 
-- It usually takes three days to transfer money using SWIFT 
financial services.  Other financial services companies such 
as Western Union and Money Gram are also available to 
investors seeking to transfer funds. 
 
-- Since January 2007, the Rwandan Franc (RwF) has been 
convertible for essentially all business transactions. 
Rwanda has a liberal monetary system and complies with IMF 
Article VIII and all Organization for Economic Cooperation 
and Development (OECD) convertibility requirements.  The 
Rwandan Franc exchange rate is closely tied to the USD. 
 
¶4. (U) EXPROPRIATION AND COMPENSATION 
       ------------------------------ 
 
-- The Government of Rwanda is authorized to expropriate 
property if it is &in the public interest8 and &for 
qualified private investment8 under the expropriation law of 
April 2007.  Compensation is negotiated directly between the 
QApril 2007.  Compensation is negotiated directly between the 
buyer and the seller.  Valuation of expropriated property 
remains non-transparent and controversial.  Legislation 
governing valuation of expropriated properties is still 
pending.  In 2008, a number of property owners vocally 
protested expropriation of their property by the city of 
Kigali and claimed the compensation offered was below market 
value and not in accordance with the expropriation law. 
 
-- Expropriation actions have been more common in the capital 
because Kigali is undergoing major development.  No 
industrial plant has been expropriated thus far, as 
expropriation has been limited to residential areas and small 
farms.  For detailed information on the expropriation law, 
visit www.primature.gov and official gazette law No 18/2007 
of 19 April 2007. 
 
-- There are no laws that require local ownership, but the 
Organic Land Law allows the Government to expropriate land 
that is &underutilized.8 
 
 
¶5. (U) DISPUTE SETTLEMENT 
       ------------------ 
 
-- The Government of Rwanda established an arbitration center 
in 1998 as an alternative dispute resolution mechanism, but 
it has not lived up to expectations according to businesses 
that have utilized it.  Rwanda is a member of the 
International Center for the Settlement of Investment 
Disputes (ICSID) and African Trade Insurance Agency (ATI), 
which are supported by the World Bank and Lloyds of London. 
ATI covers risk against restrictions on import and export 
activities, inconvertibility, expropriation, war, and civil 
disturbances. 
 
-- In 2008, Rwanda opened specialized commercial courts to 
address commercial disputes and facilitate enforcement of 
property and contract rights. 
 
-- The law governing commercial establishments, the 
investment law, the law on privatization and public 
investment, the land law and the law on protection and 
conservation of the environment currently are the main laws 
governing investments in Rwanda. 
 
-- Judgments of foreign courts and governing law clauses in 
agreements are accepted and enforced by local courts.  There 
have been growing numbers of private investment disputes in 
Rwanda, but the Government has never been involved as a 
complainant or respondent in a World Trade Organization 
dispute settlement. 
 
-- Rwanda signed and ratified the Multilateral Investment 
Guarantee Agency (MIGA) convention on October 27, 1989.  MIGA 
issues guarantees against non-commercial risks to enterprises 
that invest in member countries. 
 
¶6. (U) PERFORMANCE REQUIREMENTS AND INCENTIVES 
       --------------------------------------- 
 
-- The Government maintains measures that are alleged to 
violate the WTO,s TRIMs (Trade Related Investment Measures) 
by allowing parallel imports of goods from countries where 
patents and original trade marks are not registered and 
recognized.  However, as a least developed country, Rwanda 
has up to 2013 to abide by specific WTO TRIMs. 
 
-- Unless stipulated in a memorandum of understanding that 
characterizes the purchase of privatized enterprises, 
performance requirements are not imposed as a condition for 
establishing, maintaining, or expanding other investments. 
They are mostly imposed as a condition to access tax and 
investment incentives.  Investors who demonstrate capacity to 
add more value, and invest in priority sectors enjoy more tax 
and investment incentives which include VAT exemptions on all 
imported raw materials, 100 percent write-off on research and 
development costs, 5 to 7 percent reduction in corporate 
income tax if the company exports products and services 
valued from USD 3 to 5 million, duty exemption on equipment, 
and a favorable accelerated rate of depreciation of 50 
percent in the first year. 
 
-- Although there are no legal obligations regarding these 
Q-- Although there are no legal obligations regarding these 
matters, foreign investors are encouraged to transfer 
technology and expertise to local staff in the development of 
human resources.  Work permits are granted to foreign 
expatriates as long as they are key personnel and fall into 
categories of skilled labor where Rwandans are not available. 
 
-- RDB has been relatively successful in developing 
investment incentives and publicizing investment 
opportunities.  Registered investors obtain certificates that 
bring benefits, including exemption from value-added tax and 
duties when importing machinery, equipment, and raw 
materials.  RDB also assists with the issuance of expatriate 
work permits, securing all the required government permits, 
and assisting with land acquisition if required.  Grants and 
special access to credit are provided to investors promoting 
rural areas.  There are no import quotas for investors. 
 
-- There is no legal requirement that investors purchase from 
local sources or export a certain percentage of their output. 
 In order to benefit from incentives of the planned free 
export zone, a certain percentage of the finished product 
must be exported.  Access to foreign exchange in relation to 
exports is regulated. 
 
-- Preferential tax incentives are given to investors who 
create significant export-oriented growth.  Determination is 
made upon request and is based on several factors: exports 
must total at least 80 percent of production (or exports 
total at least 10 percent if manufacturing under bond); 
capital investment is at least USD 100,000 (local investors 
and COMESA members) or USD 250,000 (non COMESA investors). 
 
-- There is no legal obligation that nationals own shares in 
foreign investments or that shares of foreign equity be 
reduced over time, however, the Government strongly 
encourages local participation in foreign investments. 
Technology transfer can only be imparted to local employees. 
There is no condition that technology be transferred on 
certain terms. 
 
-- The Government is not involved in assessing the type and 
source of raw materials for performance, but the National 
Bureau of Standards determines quality standards.  Investors 
are not required to disclose proprietary information to 
government authorities. 
 
-- U.S. and other foreign firms are allowed to participate in 
government-financed and/or subsidized research and 
development programs.  In practice, foreign firms are given 
priority in research projects because Rwanda has not yet 
fully developed a highly trained cadre of research 
professionals. 
 
-- There are no onerous residence visa or work permit 
requirements that inhibit foreign investors, mobility.  U.S. 
nationals are not required to have visas for the first 90 
days of their stay in Rwanda.  Other foreign nationals 
generally have their visa applications processed in a timely 
manner.  As a result of joining the East African Community, 
East Africans are theoretically not required to have work 
permits in Rwanda.  In practice, this is only applicable in 
some circumstances.  The RDB facilitates visas and work 
permits for potential investors. 
 
 
¶7. (U) RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT 
       -------------------------------------------- 
 
-- Local and foreign investors have the right to own and 
establish business enterprises in all forms of remunerative 
activity.  The Rwandan constitution stipulates that every 
person has the right to private ownership, whether personal 
or in association with others.  The right to private 
Qor in association with others.  The right to private 
ownership cannot be violated except in the public interest, 
and with procedures that are determined by law, and subject 
to fair compensation. 
 
-- Private entities are also allowed to acquire and to 
dispose of interests in business enterprises.  Foreign 
nationals may hold shares in locally incorporated companies. 
The Government has divested and continues to divest in public 
enterprises that would compete with the private sector. 
However, holding companies closely affiliated with the 
Government continue to dominate the private sector. 
 
 
¶8. (U) PROTECTION OF PROPERTY RIGHTS 
       ----------------------------- 
-- The law protects and facilitates acquisition and 
disposition of all property rights.  Investors involved in 
commercial agriculture have lease-hold titles and are able to 
secure property titles, if needed.  The land law passed July 
14, 2005 stipulates modalities of property registration, but 
no registries have been established yet. 
 
-- Rwanda adheres to key international agreements on 
intellectual property rights and adequate protection of 
intellectual property rights, but as a least developed 
country, Rwanda has until 2013 to abide by specific Trade 
Related Intellectual Property (TRIP) arrangements.   As a 
member of Common Market for East and Southern Africa 
(COMESA), Rwanda is automatically a member of African 
Regional Intellectual Property Organization (ARIPO).   It is 
also a member of World Intellectual Property Organization 
(WIPO) and is currently working towards conforming its 
legislation to WTO trade-related aspects of intellectual 
property.  The Ministry of Commerce (MINICOM), the Rwandan 
Revenue Authority (RRA), and the Rwandan Bureau of Standards 
(RBS) work together to address issues involving counterfeit 
products on the Rwandan market.   Through the RBS and the 
RRA, Rwanda has earned accolades for its protection of 
intellectual property rights, but many goods that violate 
patents, especially pharmaceutical drugs, make it to market 
nonetheless. 
 
-- Rwanda has not yet ratified WIPO internet treaties, but 
the Government has taken steps to implement and enforce the 
WTO TRIPS agreements.  Intellectual property legislation 
covering patents, trademarks and copyrights have been drafted 
and are pending parliamentary review.  A Registration Service 
Agency, which is part of the Rwanda Development Board (RDB), 
was established in 2008 and will further improve intellectual 
property rights by registering all commercial entities and 
facilitating business identification and branding. 
 
 
¶9. (U) TRANSPARENCY OF THE REGULATORY SYSTEM 
       ------------------------------------- 
 
-- The Government of Rwanda generally uses transparent 
policies and effective laws to foster clear rules consistent 
with international norms.  Institutions such as the Rwanda 
Revenue Authority, the Ombudsman,s office, the Bureau of 
Standards, the National Public Prosecutions Authority (NPPA), 
the Rwanda Utilities Regulatory Agency, the National Tender 
Board, and the Privatization Secretariat all have clear rules 
and procedures.   Some investors allege that regulations 
concerning the Rwanda Environment Management Agency and 
Rwanda Utilities and Regulation Agency are less transparent. 
 
-- There is no formalized mechanism to publish draft laws for 
public comment, although civil society is sometimes accorded 
the opportunity to review proposed laws.  There is no 
government effort to restrict foreign participation in 
industry standards-setting consortia or organizations. 
 
-- Some investors complain that the strict enforcement of 
tax, labor, and environmental laws impede investment. 
 
-- Rwanda established an Ombudsman,s office in 2004 that 
Q-- Rwanda established an Ombudsman,s office in 2004 that 
monitors transparency and compliance to regulation in all 
governmental sectors.  The Rwanda Utility Regulation Agency, 
the Auditor General,s Office, the Anti-corruption Division 
in the Rwanda Revenue Authority, the National Bureau of 
Standards, and the National Tender Board also enforce 
regulations.  Moreover, the press has openly exposed 
instances of bad debts and malfeasance in 2008 involving 
private citizens and Rwandan officials.  This has led to some 
arrests and resignations. 
 
-- There is no informal regulatory process managed by 
nongovernmental organizations.  Existing legal, regulatory 
and accounting systems are generally transparent and 
consistent with international norms but are not always 
enforced. 
 
-- A key component of the Government,s regulatory system is 
the Auditor General,s Office, established in 1999 to audit 
government adherence to fiscal controls.  The Auditor 
General,s report for 2007 cited numerous accounting 
irregularities.  The report issued to Parliament in October 
2008 will be used to examine official conduct of government 
business.   Based on the Auditor General,s report, the NPPA 
began wide-ranging criminal investigations during the year. 
 
-- Consumer protection associations exist, but are largely 
ineffective.   The business community has been able to lobby 
the Government and to provide feedback on government policy 
and execution through the Private Sector Federation, a 
business association partially funded by the government. 
 
 
 
¶9. (U) EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT 
       --------------------------------------------- ----- 
 
-- Access to affordable credit is a serious challenge in 
Rwanda, as interest rates are relatively high and loans are 
usually short-term.  However, credit terms generally reflect 
market rates and foreign investors are able to negotiate 
credit facilities from local lending institutions if they 
have collateral and &bankable8 projects. 
 
-- The private sector has limited access to credit 
instruments.  Most Rwandan banks are conservative, 
risk-averse and trade in a limited range of commercial 
products.  A variety of credit instruments were introduced 
with the privatization of the commercial banks and more 
products such as mortgages are expected to become available 
as the local banking industry matures.   Credit cards are not 
in use except in major hotels and a few restaurants, but 
debit cards have been introduced on a limited basis. 
 
-- The Central Bank encourages and facilitates investments 
through the sale of treasury bills and bonds.  An 
over-the-counter (OTC) market was established in 2008 with 
the assistance of the US Department of Treasury, but volume 
is limited and confined to sale of government treasury bills 
and a few corporate bonds. 
 
-- The percentage of non-performing loans in the commercial 
market remains high at 29 percent in 2008. 
 
-- In 2006, the Central Bank increased the capital 
requirement for commercial and investment banks to USD 9.2 
million. 
 
-- With only a small OTC market, corporations generally trade 
shares among themselves or with private investors.  No 
hostile takeovers have occurred involving foreign investors, 
and both the Central Bank and the GOR have been very active 
in seeking foreign investors for the banking sector. 
 
-- An effective regulatory system is monitored by the Central 
Bank, which is given high marks by the IMF. 
 
 
¶10. (U) POLITICAL VIOLENCE 
        ------------------ 
 
-- Rwanda is a stable country with little violence.  A strong 
police and military provide a security umbrella that 
minimizes potential criminal activity and political 
disturbances.  There have been no incidents involving 
politically motivated damage to projects or installations 
Qpolitically motivated damage to projects or installations 
since the 1994 genocide and war.   However, in April and 
December 2008, unknown assailants detonated grenades in the 
vicinity of the Kigali Genocide Memorial Centre. 
-- Parliamentary elections in 2008 were peaceful.  Though the 
neighboring region remains unstable, Rwanda currently does 
not face insurgent activity from rebel groups operating in 
the Democratic Republic of Congo.  Rwanda acts in concert 
with its neighbors to fight crime and terrorism, and it 
actively cooperates in efforts to identify and freeze the 
assets of known terrorist individuals or organizations. 
 
¶11. (U) CORRUPTION 
        ---------- 
 
-- The Rwandan government maintains a consistent policy of 
combating corruption.   Although documented reports of 
corruption are relatively infrequent, the Government is 
periodically confronted with allegations of misconduct by 
officials using their office for personal gain.  In general, 
such incidents are investigated, prosecuted and perpetrators 
punished when found guilty.  Enforcement is the same for both 
foreign and local investors.  When corruption involves 
high-ranking officials, they are dismissed or prosecuted. 
Senior government officials take pride in Rwanda,s 
reputation as being tough on corruption, and the Parliament 
takes an active role in investigating public officials 
accused of corruption. 
 
-- Rwanda has signed and ratified the UN Anti-corruption 
Convention.   It is a signatory of the OECD Convention on 
Combating Bribery.  It is also a signatory of the African 
Union Anti-corruption Convention.  Giving and accepting a 
bribe is a criminal act under law, and penalties depend on 
circumstances surrounding the specific case.  U.S. firms have 
not identified corruption as an obstacle for investment. 
 
-- Some businesses report occurrences of petty corruption in 
the customs clearing process, but there are limited reports 
of corruption in transfers, dispute settlement, regulatory 
system, taxation or investment performance requirements. 
 
-- A local company cannot deduct a bribe to a foreign 
official from taxes.  A bribe by a local company to a foreign 
official is a crime in Rwanda. 
 
-- Institutions including the Ombudsman,s office, the 
Anti-Corruption Unit in the Rwanda Revenue Authority, and the 
Auditor General,s Office identify corruption cases.  The 
police and the NPPA prosecute cases. 
 
-- There is a local chapter of Transparency International in 
Rwanda   Other similar regional non-governmental 
organizations do not operate in Rwanda, yet periodically 
issue reports on Rwanda. 
 
 
¶12. (U) BILATERAL INVESTMENT AGREEMENTS AND AGOA 
        ---------------------------------------- 
 
-- Rwanda is eligible for trade preferences under the African 
Growth and Opportunity Act (AGOA), which the United States 
enacted to extend duty-free and quota-free access to the U.S. 
market for nearly all textile and handicraft goods produced 
in eligible beneficiary countries.  A Trade and Investment 
Framework Agreement (TIFA) was signed between the U.S and 
Rwanda in 2006 and a Bilateral Investment Treaty was signed 
in 2008. 
 
 
¶13. (U) OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS 
        -------------------------------------------- 
 
-- The Overseas Private Investment Corporation (OPIC) has 
provided a single investment guarantee in Rwanda to Sorwathe, 
an American-owned tea factory.  Given Rwanda,s political, 
Qan American-owned tea factory.  Given Rwanda,s political, 
economic and currency stability, OPIC officials have 
expressed interest in expanding OPIC involvement in Rwanda 
and are currently evaluating several promising projects. 
 
-- The Export-Import Bank (EXIM) continues its program to 
insure short-term export credit transactions involving 
various payment terms, including open accounts that cover 
exports to the U.S. of consumer goods, services, commodities, 
and certain capital goods.   Rwanda is a member of the 
Multilateral Investment Guarantee Agency (MIGA) and the 
African Trade Insurance Agency (ATI). 
 
 
¶14. (U) LABOR 
        ----- 
 
-- General labor is available, but there is a shortage of 
skilled labor, including accountants, lawyers, and 
technicians.  Higher institutes of technology, many private 
universities, and vocational institutes are improving and 
producing more and more graduates each year.  In 2008, the 
Government decreed starting in 2010 English will become the 
language of instruction from elementary school grade three 
onwards.  French will be taught as a course subject. . 
 
-- Rwanda attempts to adhere to the International Labor 
Organization (ILO) convention protecting worker rights. 
Policies to protect workers in special labor conditions 
exist, but enforcement remains inconsistent.  On-the-job 
training and technology transfer to local employees is 
encouraged, but not obligatory. 
 
-- The national labor code was revised in 2000 to eliminate 
gender discrimination, restrictions on the mobility of labor, 
and wage controls.  A new labor code is currently under 
review in Parliament.  Laws relating to insurance are being 
drafted.  Companies find skill deficits in many sectors when 
hiring, but these deficits will continue to shrink as 
literacy rates increase and more qualified people graduate 
from Rwandan institutions of higher learning.  The general 
population,s literacy rate continues to improve. 
 
 
¶15. (U) FOREIGN TRADE ZONES/FREE PORTS 
        ------------------------------ 
 
-- Rwanda is a member of several sub-regional economic 
organizations, such as the Economic Community of the Great 
Lakes (CEPGL), the Common Market for Eastern and Southern 
Africa (COMESA), and the East African Community (EAC). 
Member countries in COMESA have a free trade agreement. 
Goods originating from COMESA countries that comply with 
rules of origin qualify for duty free status.  Value addition 
on imported raw materials must be 35 percent to qualify for 
duty free status.  Rwanda plans to establish a free trade 
zone in the near future.  Bonded warehouse facilities are 
available to businesses importing duty free materials. 
 
 
¶16. (U) FOREIGN DIRECT INVESTMENT STATISTICS 
        ------------------------------------ 
 
-- UNCTAD World Investment Report 2008 reported foreign 
direct investment (FDI) statistics in Rwanda from 2006 to 
2007 as follows:  In 2006, FDI inward flows were USD 16 
million representing 3.3 percent of gross capital formation. 
In 2007, FDI inward flows grew to USD 67 million or 12.2 
percent of gross capital formation.  As a percentage of GDP 
in 2007, FDI grew to 6.4 percent compared to 4.5 percent in 
¶2006.  These statistics differ considerably from estimates by 
the Rwanda Development Board which reported FDI in Rwanda for 
2007 at USD 202 million.  Most observers consider RDB 
estimates to be inflated due to RDB,s practice of front 
loading total projected investment at the time of business 
registration rather than recording actual capital inflows as 
Qregistration rather than recording actual capital inflows as 
they occur. 
SYMINGTON