Private sector stakeholders in Rwanda’s industrial sector, together with officials from the investment division of the Rwanda Development Board (RDB), have raised concerns over the current management of industrial zones, suggesting the need for a specialized authority to provide unified oversight and speed up investment growth.
Current Structure of Industrial Zones
Rwanda’s industrial zones are divided into two categories. Special Economic Zones are designed for large-scale industries, while Industrial Parks are intended for small and medium sized enterprises.
At present, RDB manages the Special Economic Zones located in Kigali and Bugesera, while nine Industrial Parks, mostly in provincial areas, are overseen by the Ministry of Trade and Industry.
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Bugesera Seen as a Successful Model
Michelle Umurungi, Head of Investment at RDB, recently told the Senate Committee on Economy and Finance that Bugesera Industrial Zone has made faster progress than Masoro despite being newer.
She explained that Bugesera’s success comes from a model where a private investor is granted responsibility to develop infrastructure such as roads, water, and utilities, allowing operations to begin quickly.
Traditionally, the government first compensates residents, relocates them, and builds infrastructure before selling plots to investors. However, this model has often slowed progress because of limited public funds.
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Challenges at Masoro Industrial Zone
Umurungi noted that the Masoro Industrial Zone, previously managed by a private operator known as Kigali Economic Zone, did not meet government expectations.
According to her, weak contractual arrangements and poor management resulted in inadequate maintenance and rehabilitation of infrastructure, affecting both investors and zone operations.
As a result, the government revoked the operator’s license in January 2024, and RDB took over temporary management responsibilities.
Although urgent issues have since been addressed, further expansion at Masoro still requires a new investor.
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Problems in Other Industrial Parks
Industrial parks managed under the Ministry of Trade and Industry also continue to face challenges such as poor road networks, lack of basic infrastructure, delays in relocating residents, and limited government funding.
These issues have slowed industrial investment in several parts of the country.
Proposal for a Unified Authority
RDB has proposed creating a single institution to manage all industrial zones under one framework.
The proposed system, called an Industrial Land Bank, would bring together both Special Economic Zones and Industrial Parks under one government authority responsible for coordinating with private investors.
According to Umurungi, this would eliminate duplication, improve planning, and accelerate development.
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Private Sector Supports Reform
Josiane Nsanza, President of the Industrialists’ Chamber under the Private Sector Federation, also acknowledged the infrastructure challenges affecting many industrial parks.
She recommended professional centralized management and cited Morocco as an example where industrial zones are successfully managed by private operators through government partnerships.
Economic Importance of Industrial Zones
Rwanda currently has 11 industrial zones, which are expected to help achieve the government’s goal of increasing private investment from $2.2 billion (15.9% of GDP) to $4.6 billion (21.5% of GDP) by 2029.
According to RDB, Kigali and Bugesera zones host over 230 factories. About 53% are owned by Rwandan investors, while 47% belong to foreign investors.
The Kigali zone has created over 20,000 jobs, while Bugesera zone has already attracted $100 million in approved investments.
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Need for a New Management Direction
The challenges facing Masoro and other industrial parks have renewed debate on whether Rwanda should establish a dedicated Industrial Parks Authority.
Supporters believe a centralized institution could improve efficiency, attract more investment, and accelerate the country’s industrial transformation.
