The World Bank says that the Doing Business project has recorded over 3,188 regulatory reforms since its inception in 2006.
It says that from June 2, 2016, to June 1, 2017, for example, Doing Business recorded 264 regulatory reforms, making it easier to do business around the world; with 119 economies implementing at least one reform across the different areas measured by Doing Business.
Rwanda in particular, has implemented numerous business reforms over the last ten years, which saw the country improve from a global ranking of 150th in 2018 to 41st currently, and the 2nd easiest place to do business in Africa and 1st in mainland Africa and East Africa.
“This significant growth has led to Rwanda being recognized as the top global reformer of all time by the World Bank,” says Emmanuel Hategeka, COO of the Rwanda Development Board (RDB).
As a result, there has been increased investments and firms in the formal sector, translating into more and better jobs and a wider tax base.
In 2010, Rwanda attracted US$400 million in investments. The figure has grown by four folds. In 2017, the country registered US$1.6billion.
The number of businesses registered per year has also grown exponentially from 2,000 in 2009 to 13,000 in 2017.
These results have come at a price; hard work, mistakes, criticism, stalled projects, but also good fruits.
In this special report, we are looking at what motivates Rwanda and how it does it.
According to Louise Kanyonga, the Head of Competitiveness at RDB, “Rwanda is one of the most committed economies towards improving its business environment.”
She told Taarifa that, “The country sets ambitious reforms that typically take other countries several years to implement.”
What happens is that Rwanda takes bold moves of implementing the reforms in a single reform cycle, she explained.
More on why the country scores highly in the doing business reforms, Kanyonga explains that, “there is a strong political support across all levels of government; from the executive, to the parliament and to the judiciary.”
“It is very rare that you see this kind of harmony,” she says. “And whenever these kinds of interventions that are required, we all come together.”
So, why does the government do this?
According to Hategeka, “A business friendly environment reduces the costs and bureaucracy for businesses and this ultimately leads to economic growth-and indeed we have seen our economy grow at an average rate of 8% between 2010 and 2016.”
By engaging in Doing Business reforms, a country gets to be ranked out of 190 economies across 10 indicators, business regulations for local firms; mostly SMES in major cities, has to be looked at, the methodology applied, with each indicator providing a specific case study and then using it as a global benchmark tool that serves as a “Reputed Investor Signal.”
Taarifa has looked at the reforms for 2018.
We will run this special report in series, looking at each indicator independently. We begin with construction permits.
Acquiring Construction permits
The reforms are aimed at not only reducing bureaucracy in obtaining a construction permit but also cutting down the cost and duration of construction projects.
A developer is required to present a geotechnical study for approval before being awarded a permit.
Before adjustments, it would take 15 procedures, 113 days; thus eating up 13% of the actual project.
Now, amendments have been made in the requirements for the geotechnical study or report in the building code as per classification of buildings.
Buildings have been categorized, thus determining which buildings need or do not need geotechnical study.
Because the Master plan is online and has topographic features for all land uses in all locations, topographic survey was removed from the checklist as a mandatory requirement, valued at US$500.
This was captured in the amended building code but also bearing in mind the master plans that are not yet online.
More so, initially, a developer would be required to hire an environmental expert to produce and submit an Environmental Impact Assessment report (EIA), costing Rwf570, 000.
Additionally, construction projects will no longer be required to notify One Stop Centre of commencement of works and other stressing administrative inspections after obtaining construction permit.
Also, the topographic survey is not a mandatory requirement anymore for obtaining a construction permit in areas where the Masterplan features are available online.
It will only take three days to obtain an occupation permit and a freehold land title when requested by a licensed firm.
While announcing the reforms the Acting Mayor of the City of Kigali, Parfait Busabizwa said that, “When these reforms get into effect, they will help reduce the procedures an investor goes through to acquire a construction permit from 15 to only 7 and the number of days to acquire a construction permit will reduce from 113 to 55 days and also reduce all other associated costs”.
In the last 5 years the City of Kigali has introduced different reforms that have helped facilitate investments in the construction sector and also enhanced service delivery in line with the implementation of the master plan.
These reforms include among others: Online application for construction and occupation permits, online access of Kigali Masterplan 2013, establishment of a one stop centre for all construction permitting processes.
Our second special report will be published on Thursday. We will focus on Registering Property. Don’t miss it.
We asked our readers what they think should be included in the reforms.
Follow this tweeter thread for details.
Later today Taarifa will publish a special report on doing business reforms in Rwanda. We would like to ask you to mention what you think should be inluded in the next reforms. Your views might appear in our special report. @RDBrwanda @wasac_rwanda @reg_rwanda @CityofKigali pic.twitter.com/b3dt62Wd3e
— Taarifarwanda (@taarifarwanda) May 6, 2018