Investors in the property development sector in Rwanda have all reasons to smile following new reforms meant to ease acquisition of all relevant authorizations needed in carrying out actual construction of property.
Authorities announced in early April 2018 that it is now much easier to get a building permit that is a key component of property development process. The reforms are part of concentrated efforts by Kigali authorities working in tandem with Rwanda Development Board (RDB) to ease property development sector in Rwanda.
Both Kigali city authorities and RDB say the latest reforms is meant to ease doing business in the property sector which is currently experiencing an ongoing boom.
The widespread reforms are focused on the technical elements of attaining authorizations needed in carrying property development. The major authorization includes attainment of the construction permit.
Other counterpart approvals needed by property developers from local authorities includes an environmental impact assessment (EIA) certificate as well as attainment of approvals of geotechnical studies, topographic surveys and eventually occupation permits for fully completed property.
It now takes only 55 days up from 113 days to acquire a construction permit courtesy of the new reforms. The reforms comes after the World Bank said in their 2017 doing business report that 13% of total cost for putting up a typical warehouse in Kigali was spent on securing a construction permit by investors.
Acquisition of construction permits for property developers is one of the indicators where Rwanda ranked poorly in the 2017 doing business report – 112th out of 190 countries globally.
In a bid to secure its lofty position as a leading investment destination in Africa, RDB and city authorities worked closely to reverse Rwanda’s position by carrying out changes in the process of attainment relevant authorization needed by investors.
RDB CEO says that the new reforms will facilitate ongoing construction boom.
“When an investor is facilitated to attain all authorizations needed prior to commencement of construction in terms of time and cost saved then definitely we anticipate the reforms to aid on going property boom”,
RDB CEO adds;
“While it appears that the cost savings are minimal to developers it goes to outline the importance we attach to hasten the process of facilitating investors in getting projects from conception to actual construction”.
For instance, the cost of attaining a construction permit has been slashed drastically from the previous Rwf 150,000 to approx. Rwf 60,000. Furthermore, construction projects that are not in located in environmentally risky zones will not require attainment of an EIA certificate from authorities. This translates into savings worth upto Rwf 570,000 that investors have been paying EIA experts.
In addition, investors putting up grounded residential houses and warehouses will be assured of saving up to Rwf 2 million needed in paying for geotechnical experts.
Another significant savings in terms of time and money arises out of the caancelling the need by the developers to carry out topographic surveys for approval purposes , which cost Rwf 4,000,000 and takes a significant amount of time for developers.
This is due to fact that the entire Kigali City conceptual master plan has topographic features for all land users. However for terrain that is steep or having similar challenging features may require a developer to engage the services of topographic surveyor to aid in guiding detailed designs. The city authorities also scrapped as part of new reformsthe need to formally notify authorities as to commencement of construction works from the list of requirements needed by investors when carrying out property development. The new reforms leads to shortening of the occupation permit and freehold land title that will now be availed in less than three days from the day of application.
The new reforms come in the wake of boosting the capacity of the unit at Kigali City responsible for issuing the permits. formally notify authorities as to commencement of construction works from the list of requirements needed by investors when carrying out property development. The new reforms leads to shortening of the occupation permit and freehold land title that will now be availed in less than three days from the day of application. The new reforms come in the wake of boosting the capacity of the unit at Kigali City responsible for issuing the permits.
The city’s director of construction and urban planning, says;
“Kigali city’s one stop-centre has been given more capacity and personnel to improve on their efficiency. This is due to the fact that applications by developers had tripled over last year signaling the need to increase capacity for expediting authorizations”.
Analysts are predicting that the new reforms will stimulate further on going construction boom.
Architect Fred Ofuwa
a practicing architect says that the new reforms will very likely quicken the approval process of healthy pipeline of projects by developers.
“Kigali city has a healthy pipeline worth over US$1.6 billion over the next 2-3 years that is currently under going development estimated to bring on board 2,000,000 sq metres of space”. Ofuwa adds; “With the new reforms we expect to see newer and much more exciting projects coming up in line with Kigali city master plan”.