The private sector federation (PSF)-Rwanda officially launched two important reports on Thursday 2nd April 2009; the Business and Investment Climate Survey (BICS) and the Non Tariff Barriers (NTBs) reports at its headquarters in Gikondo. Although both reports are aimed at paving ways to make Rwanda a better business destination, they actually address different aspects. As much as the World Bank gives a picture on the ease of doing business worldwide, annually, the BICS report, the first of its kind, gives an in-depth analysis of the key challenges to doing business in Rwanda. The report provides a new understanding of the realities of the business environment that goes beyond the set of international indicators.
As such, the aim of this report is to provide a detailed, evidencebased set of recommendations which both the government and PSF News PSF PRESENTS NTBs, BICS reports to the media and stakeholders By Mansur Kakimba features Private Sector Federation - Rwanda I Aprill 09 I www.psf.org.rw 67 the private sector can take forward to ensure that business becomes the driving force for development in Rwanda.
With financial support from GTZ and the OTF technical support the survey was successfully conducted among 952 formal businesses across the country over last year. The vast majority of businesses surveyed cite transport, access to and cost of land, and tax administration as the most significant impediments to business success.
Small and Medium Enterprises in the north and south report greater difficulty accessing finance; manufacturing businesses face more problems recruiting and training skilled staff. Even when economic conditions are favorable such as low input costs and high demand, finance, tax, and legal issues pose major challenges to business success.
The governments’ minimal consultation with businesses regarding policy changes, along with difficulty in accessing and affording land are reported as major legal constraints to starting and expanding businesses.
Weaknesses in infrastructure remain a key constraint to business growth. Access to and cost of transport, electricity, water and telecommunications all rank in the top 9 constraints reported by businesses.

Businesses involved in foreign trade surveyed, cite costly and lengthy ground transportation routes to ports in Mombasa and Dar es Salaam. They also cite lack of electronic cargo tracking systems, exchange rate fluctuations, and the lack of availability of foreign exchange as priorities to address. On the other hand, the NTBs report specifically looks at challenges importers and exporters in the region go through while plying both the northern and central corridors enroute to the seaports of Mombasa and Dar el Salaam. The two corridors are lifelines to the EAC member states. The competitiveness of the trade bloc will highly depend on how seamless trade flows along both routes. While lowering transport costs are imperative for a growth strategy based on exports, Rwanda is in a difficult position because 95% of its main importexport route lies outside of its direct policy jurisdiction. Among the key NTBs detailed in the report include, among others; poor and almost impassable roads, corruption/ bribery, congestion at both seaports, and unnecessary delays at border posts and weighbridges. For instance, the report indicates that along the Northern Corridor, over 57% of the journey is spent stopping. Bribery expenses total to about US$891, accounting for over 21% of the total export costs, and on the import side, the cost is even higher, approximately 1200 US$. PSF commissioned the study to become well equipped with real data about the routes. At the press conference, the PSF Chief Executive Officer (CEO) Mr. Emmanuel Hategeka said of both reports, “We use both reports in informing governments, development partners and private sector priority areas to focus on to bring the cost of doing business down in Rwanda and in the region”. He says there is full support from development partners and government to publish both reports on an annual basis to be able to track progress made over time.

Journalists asked the CEO how far PSF has engaged authorities for solutions to challenges highlighted in both reports. In response, Mr. Hategeka said the federation has already engaged the EAC about the NTBs report, and that the findings of BICS report are being tackled through various forums like Tax Issues Forum (TIF), Rwanda Economic and Social Council (RESC), Kigali Investors Forum (KIF) among many others. One Journalist expressed concern by some institutions that say publishing facts in such reports is scaring away investors from Rwanda. Apparently Mr. Hategeka differs from this ideology. “Publishing such reports in a way gives confidence to prospective and existing investors that the government is aware of business challenges and also determined to work on them”. He went on to say that Rwanda was among the first countries to undergo the African Peer Review Mechanism (APRM) under the NEPAD framework, hence be ing transparent on challenges is not a thing of today.
Mr. Marcel Museminali, the Chief Editor of ‘Business Daily”, a local newspaper remarked of challenges highlighted in the BICS report: “If the government does not come out strongly in addressing these challenges, Rwanda is no doubt eating into her own future”.

Later in the day, PSF also hosted a separate stakeholders’ meeting to present both reports. Among the key reactions from different institution heads came from the RRA Deputy Commissioner General who is also the Head of Customs, Mr. Eugene Torero and the Permanent Secretary to the Ministry of East African Community (MINEAC) Mr. Robert Ssali.
Mr. Torero appreciated work done by PSF on both reports although he said the BICS report lacks some facts on how service providers fall short in complimenting government efforts in ensuring tax compliance. Whereas the MINEAC PS was in agreement with both reports, remarking: “In the EAC framework, at different forums, the Non Tariff Barriers (NTBs) has been topical but lacked concrete facts. With such a report (NTBs) it will guide us well in finding solutions”. Mr. Ssali urged fellow institutions not to take any offence if any of the reports victimizes them, but instead work towards solving business challenges for the betterment of Rwanda and EAC as a whole.