How proposed reforms will ease cost of doing business

Sunday April 21 2019

The 2019 World Bank ease of doing business

The 2019 World Bank ease of doing business index ranked Rwanda in the top thirty globally based on a number of indicators like ease of registering property as well as quality of credit information systems and procedures. PHOTO | CYRIL NDEGEYA 

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 Investors could see the cost and time it takes to obtain building permits reduced when the government implements the soon-to-be gazetted reforms aimed at easing doing business in the country.

Developers currently find the process¬es cumbersome with reports showing that a building permit for a simple warehouse can take more than 113 days and cost more than 12 per cent of the project’s total cost.

Experts say this was a huge cost for a developing country, and was taking a toll on the country’s overall ranking in the global doing business ranking where Rwanda has been performing well.

The 2019 World Bank ranking put Rwanda in the top thirty on a number of indicators like ease of registering property as well as quality of credit information systems and procedures.

But, the country lagged relatively behind vis-à-vis construction permit issuance followed by enforcing contracts and getting electricity at 106th, 78th and 68th position respectively out of 190 countries.

According to officials from the Rwanda Development Board, pending re¬forms in the country’s building code along with ministerial orders for building regulations could see all unnecessary procedures and investor requirements scrapped.


“The reforms should position us even better to attract investments. We have been doing well but more needs to be done to minimise the impact of bottle¬necks on potential investments, especially because Africa is perceived to have a high risk of doing business,” said Emmanuel Hategeka, RDB deputy chief executive officer.

For instance, those seeking permits for buildings in category two and three will no longer be required to present geotechnical reports and environmental impact assessments.

Category two building is one without a storey or basement, and with capacity to host a maximum fifteen people, while those in category three have a capacity to host 50 people or less.

Besides, no topographic survey will be required except in districts, which are yet to have their masterplans online.

Developers say these requirements had seen investors incur up to Rwf2 million in addition to the filing and waiting time.

Fred Mugisha, the Construction and Urban Planning One Stop Centre head at City of Kigali, who is also part of the team disseminating the reforms said developers will no longer have to notify the one stop centre about starting construction under the new building code.

According to Mr Mugisha, this would also apply on the site mobilisation inspection, which has been removed from the requirements, while the time it takes for water connection would be reduced to only 10 days from 30 days.

The changes await publication in the official gazette following approval by the Cabinet early this month.

RDB, City of Kigali and Rwanda Housing Authority have started sharing the reforms with professional associations in the construction sector who include engineers, architects, environmentalists and well as government workers in the housing and construction sector.

The officials told Rwanda Today that they expected the implementation of the changes to help the country improve ranking in the global doing business report for next year.

The developers have however voiced concern that while the implementation of the reforms would be seamless in Kigali City, which has enough personnel due to the one stop centre, it could be hard in districts, which are understaffed in the building, licensing and inspection sector.

Engineers said that enforcement of existing permit issuance procedures and quality control was problematic owing to existing structures, which do not have enough staff and logistics to timely process applications and expedite necessary approvals.