Rwanda : how to exceed $819 million in digital Foreign Direct Investment (FDI) by 2035

Between 2013 and 2023, Rwanda attracted $819 million in foreign direct investment (FDI) in the digital sector. This funding, spread over four sub-sectors, reflects the growing interest of investors in the country’s digital potential.

The software and IT services sector accounted for the largest share of investment, with $372 million (45% of the total), followed by communications, including telecoms and connectivity, with $304 million (37%). Communications, which includes telecoms and connectivity, followed with $304 million (37%), while electronic components and machinery and equipment accounted for $77 million and $66 million respectively.

The investments made are not limited to financial contributions. FDI involves an active contribution to the management of local projects, reinforcing the creation of added value. This dynamic makes digital technology a key lever for the Rwandan economy.

An ambitious plan for the next decade

Over the next decade, Rwanda aims to surpass the performance recorded between 2013 and 2023. In setting a higher target, the country is building on the Digital Foreign Direct Investment (DFDI) initiative, launched in 2022 by the Digital Cooperation Organization (DCO) and the World Economic Forum (WEF).

By joining this initiative in 2022, the country became the second to benefit from it. This membership has enabled us to diagnose the specific challenges the country faces in becoming a preferred destination for digital FDI. The report published on January 3, 2025 by DCO and WEF, entitled “Digital FDI Initiative : Digital FDI-EnablingProject in Rwanda“, highlights the measures needed to achieve this goal.

Structural challenges

Despite its dynamism, Rwanda faces a number of major challenges that are holding back its full digital development. These include Internet and telecoms infrastructure, particularly in rural areas. In January 2024, the Internet penetration rate was just 34.4%, according to Data Reportal.

The development of digital skills is also a crucial issue. The growing need for skilled professionals in information and communication technologies (ICT) is not yet being met. Added to this are problems such as regional competition, limited access to capital, and a lack of support for start-ups and early-stage companies. Cybersecurity and data protection are also among the critical challenges. These aspects are essential to build the confidence of foreign investors in a context where data is becoming a strategic asset.

Digital technology, a pillar of Vision 2050

Digital technology plays a central role in Rwanda’s Vision 2050, an ambitious plan launched in 2020. This national strategy aims to make Rwanda an upper-middle-income country (UMIC) by 2035, with a GDP per capita of over $4036. By 2050, the country aspires to become a high-income country (HIC), with a per capita GDP in excess of $12,476. To achieve these objectives, digital technology is seen as a catalyst for economic and social development. By strengthening its digital ecosystem, Rwanda hopes to attract massive FDI and position itself as a key technology hub in East Africa.

Rwanda’s strengths in the digital sector

Despite the challenges, Rwanda has a number of assets that make it attractive to foreign investors.  The regulatory framework is one of the strongest in the region. The Investment Promotion and Facilitation Act of 2021, for example, guarantees the absence of restrictions on foreign ownership or control in the digital sector.

In addition, the government has clearly defined its priorities in strategic sectors such as information and communication technologies. This coherent political vision is a key factor in encouraging investors. However, as the DCO and WEF report points out, these legal foundations alone are not enough. Rwanda will need to step up its efforts to improve connectivity, support start-ups and train a highly qualified workforce.

Positioning against regional competition

Kenya, often dubbed the “Silicon Savannah”, remains the regional leader in the digital sector. In 2023, it attracted $1.1 billion in FDI in the sector, a performance well ahead of Rwanda. To compete with Kenya, Rwanda needs to strengthen its infrastructure, further simplify administrative procedures for investors and diversify the opportunities offered by its digital ecosystem.

With its Vision 2050 and initiatives such as DFDI, Rwanda is equipping itself to become a major digital player in Africa. Although significant challenges remain, the progress made over the past decade and the solid foundations laid by the government point to a promising future.