IGIHE

Category: Economy

  • KCB Bank-Rwanda appoints acting Managing Director

    {KCB Bank-Rwanda has appointed Mr. George Odhiambo to the position of the Acting Managing Director effective Friday August 1st, 2017.}

    The commercial bank says that this follows the departure of former Managing Director, Maurice Toroitich.

    Mr. Odhiambo, was the bank’s former Head of Business Development and Client Services. He joined KCB Bank Rwanda in September 2013 after serving as Head of Business Analytics & Transformation at KCB Bank Kenya. He brings to the bank 18 years of experience in Commercial banking.

    The incoming Acting Managing Director says; “I am humbled to take on this responsibility during an exciting and transitional period for both KCB Bank Rwanda and the financial sector in general.”

    “I am particularly pleased to champion the bank’s ambition in facilitating major infrastructure and financial technology development in Rwanda. My aim is to keep this momentum going in both the immediate and long-term.’’

    The Acting Managing Director also congratulated his predecessor, Maurice Toroitich for the commendable service provided during his 9-year tenure.

    “The staff, Management, Board and Iwould like to once again thank Maurice for the business foundation he built from inception and growth successes that the bank achieved during his leadership. The bank is in a strong financial position and we will definitely look forward to seeing more progress in the coming years. We wish him all the best in his future endeavors,” he added.

    According to the official statement, it is revealed that the banks remains committed to deliver on digital payments and investments in Rwanda’s key economic sectors.
    This year KCB Bank Rwanda launched Mvisa and is currently in the process of launching a new mobile credit service to customers.

    Subsequently, the bank derives satisfaction in contributing to landscape changing developments like the construction of Bugesera International Airport, Kigali Heights, Ubumwe Grand Hotel and Park Inn Radisson Blu among others and believes that the best times in helping to shape Rwanda’s economic development are still ahead.

  • MINEACOM to enhance assistance for SME’s to overcoming market challenges

    {
    The Ministry of Trade, Industry and East African Community Affairs “MINEACOM” has announced that it will enhance assistance for SME’s to overcome some of the market challenges that the face.}

    Honorable Minister Francois Kanimba made the disclosure during the opening of a one-day fifth SME’s forum convened in Kigali, that attracted all stakeholders including private and public, civil society and SME’s.

    The main aim is to discuss the main challenges facing SME’s, which include limited access to finance and management of resources lack of access to markets and market information among the others.

    Amiel Sezikeye one of the fisherman at Lake Burera disclosed that disorganization is one of the challenges since some illegally fish at night and at times steal their equipment.

    “As we seek a positive mindset towards ‘made in Rwanda’ products, SME’s need to produce quality products. This can be achieved if they have good business plans financial institutions will not hesitate to provide them with loans,” Minister Francois pointed out

    Those involved in tailoring and other SME’s also said that market competition from less expensive products from neighboring economies is one of the challenges faced since they import the raw materials from outside the country.

    The Minister also reminded everyone that the final products have to prove to be high-quality products in response to those challenges.

    The forum is expected to play an important role as catalysts for the operational and structural change of the stakeholders with the purpose of building strong and dynamic SMEs industry in Rwanda.

    It presents a timely opportunity for productive dialogue on how to use existing efforts to meet today’s SMEs challenges while helping the SMEs to generate the much-needed jobs and exports.

  • Rwanda economy grows by 1.7% in quarter one, services sector leads

    {Rwanda’s gross domestic product (GDP) grew by 1.7 percent in the first quarter of 2017 compared with the same period in 2016, the National Institute of Statistics Rwanda has revealed in a report released today. The report indicates an estimated GDP growth of Rwf1,817 billion at current market prices; i.e 1.7 % up from Rwf 1,557 billion in the same quarter of the previous year.
    }

    The services sector which grew by 4% accounted for 46 percent of GDP, while agriculture which grew by 3% contributed 32 percent of the GDP, the equivalent of Rwf 578 billion. The industrial sector contributed 15 percent.

    The growth in the services sector, NISR has said, is attributed to the growth in hotels and restaurants which grew by 17%, real estate which grew by 8%, administrative and support activities which grew by 25%.

    Within industry, manufacturing activities increased by 7 percent boosted by food processing activities which increased by 13 percent and manufacturing of chemicals, rubber and plastic activities which grew by 28 percent. Construction activities declined by 7 percent.

    The Director General of he National Institute of Statistics of Rwanda (NISR), Yusuf Murangwa

  • Rwanda : reaping the fruits of economic reforms

    {Rwanda’s accession to the Commonwealth in November 2009 marked another step in the landlocked African nation engaging with the outside world.
    }

    The group of mostly former British colonies brings together industrialised and developing nations, espouses democracy and good governance, and is a consensus-seeking forum on issues like economic policy, trade and climate change. Rwanda’s accession is a recognition of its rehabilitation since the genocide in 1994, said Rwanda’s Foreign Minister Louise Mushikiwabo at an audience with journalists in London.

    “The genocide and discrimination was, in some ways, due to a paranoia and fear of opening up. Our government now has a deliberate policy to open up. The more Rwandans come and go, the more they will benefit, and Rwanda joining the Commonwealth is part of this policy to open doors.”

    Rwanda’s joining the Commonwealth is just the latest in a stream of initiatives to engage with the outside world that is starting to entice investment into the country. Despite the chill of last year’s global economic downturn, foreign investment jumped 40% to $1.1bn in 2009 and is expected to rise 20% this year.

    Rwanda recently became the World Bank’s biggest business reformer according to its Ease of Doing Business Index, rising to 67th position overall, with starting up a business, registering property, paying taxes and enforcing contracts all getting easier. The Rwanda Development Board says it will simplify the issuance of land and building permits and promises to work with the East African Community trade bloc to address red tape and non-tariff barriers. “It now takes a Rwandan entrepreneur just two procedures and three days to start a business,” said the World Bank.

    Rwanda’s drive for private sector investment to transform its smallholder agricultural economy into a regional hub for financial services, ICT and tourism is finally starting to bear fruit. Investment is moving into the banking sector as groups seek to tap Rwanda’s unbanked population.

    Kenya Commercial Bank set up in Rwanda in 2008 and has expanded its branch network to nine; it is the only company that is quoted on the Rwanda bourse following its cross listing in 2009. Nigeria’s Access Bank has a 75% stake in Rwanda’s fourth-largest bank, Bancor SA, and is anchoring its East Africa push out of Kigali. “Access Bank’s presence in Rwanda is vital for our reaching the vast East African market,” said Access Bank’s Deputy Managing Director Herbert Wigwe.

    Dutch group Rabobank has a stake in Banque Populaire du Rwanda; and ShoreCap International and Germany’s African Development Corporation – which also has a controlling stake in Simtel, the national electronic payment transactions provider – are also on the ground. Tourism, the country’s biggest foreign exchange earner, is growing. In 2007, tourists spent $209m and in 2008, visitor numbers to resorts like Virunga National Park and Lake Kivu jumped 50%.

    Commentators highlight investor opportunities in high-end resorts. “There are 187 hotels in Rwanda and only seven are upper range,” says the Rwanda Development Board (RDB). Rwanda was among the countries hit by the fallout from the collapse of the Dubai sovereign wealth fund in 2009. A $230m venture with Dubai World to build six tourism projects collapsed, leaving just two – the Nyungwe Forest Lodge and Gorilla’s Nest Hotel – worth around $25m.
    Plethora of investments

    In Rwanda’s biggest foreign investment to date, New York-based ContoursGlobal, a privately owned renewable power developer, is ploughing $325m to harness methane gas to boost electricity generation compressed under the waters of Lake Kivu, one of Africa’s great lakes, which lies on the border of Rwanda and the DR Congo.

    The company plans the first 25MW of the project to connect to the grid by October this year and says it will total 100MW on completion in 2012. Most of Rwanda’s current 69MW power output comes from oil generators and hydropower. Elsewhere, South Africa’s Industrial Development Group is conducting a feasibility study to build a gas-to-liquid plant on Lake Kivu that would convert methane gas into products such as diesel, petrol and liquid petroleum gas.

    Canadian group Vangold Resources, which discovered signs of oil under Lake Kivu in aerial surveys, is also preparing an oil survey under a Special Hydrocarbon Exploration Licence. Vangold holds exclusive exploration rights to a 1,631sq km block. The government, which says it is targeting 90% of its electricity from renewable sources, has also signed biodiesel deals with Britishbased Eco Positive and US-based Eco-Fuel Global, together worth around $250m.

    The company aims to meet up to 20% of domestic diesel demand from Jatropha-derived biofuels. Telecom companies have also jumped in. Sweden’s Millicom International Cellular has just started operations following a $120m investment after winning Rwanda’s third mobile licence in 2008. Trading under the brand name Tigo, the operator joins South Africa’s MTN and Libyan-owned Rwandatel in providing mobile phone services. At the moment, MTN and Rwandatel have just two million subscribers, representing 20% market penetration. “We are here to compete. We want to increase penetration and accessibility to telephone services that are affordable,” says Tigo chief executive Alex Camara.

    The company aims to meet up to 20% of domestic diesel demand from Jatropha-derived biofuels. Telecom companies have also jumped in. Sweden’s Millicom International Cellular has just started operations following a $120m investment after winning Rwanda’s third mobile licence in 2008. Trading under the brand name Tigo, the operator joins South Africa’s MTN and Libyan-owned Rwandatel in providing mobile phone services. At the moment, MTN and Rwandatel have just two million subscribers, representing 20% market penetration. “We are here to compete. We want to increase penetration and accessibility to telephone services that are affordable,” says Tigo chief executive Alex Camara.

    Rwanda’s ITC ambitions, outlined as a ‘Priority Sector’ in the government’s Vision 2020 have also got a boost from the newly laid fibre-optic cable between Kigali and Mombasa. The submarine cable means the government’s regulatory reform, infrastructure investment and education initiatives will finally start to bear fruit. Operators and the government are currently negotiating to acquire bandwidth from the cable, which will cut the price of accessing the Internet to as little as $100/mbps from current astronomical levels that range between $1,500-$5,000/mbps on costly and unreliable satellite connections.

    Patrick Nyirishema at the RDB says, “Companies set to benefit most are ICT operators and service providers and we expect an explosion in broadband service subscriptions with cheaper international bandwidth. The only constraint is affordable access devices, but the operators and government are devising ways to overcome this. Affordable Internet will greatly impact academia, business, government and society in general.” China is funding a $200m conference centre in the capital Kigali, representing another major part of Rwanda’s ambition to become a regional information and communications hub.
    Privatisation plans

    Rwanda’s mineral sector is its secondlargest foreign-exchange earner after tourism. Ore exports, processed to extract tin, coltan and tungsten used in consumer electronics, brought in $91.3m in 2008, according to Central Bank statistics. Mineral re-exports from neighbouring countries rose to $43.9m, amounting to 17% of total exports, up from $30.3m in 2007. Rwanda acts as a major conduit for mineral re-export from the DR Congo, where China holds a $6bn infrastructure for-minerals contract.

    The government hopes to lure investments with results of a national mining survey to identify mineral deposits. It is also putting together ‘a strong investor-friendly legal and policy framework’, according to the RDB, which highlights particular opportunities in processing ores. The government promises to overhaul crumbling infrastructure with massive investment in the pipeline including a $4bn investment in Isaka Railway due to start in 2014, $300m in Bugesera Airport and a $12m investment in Kigali’s Industrial Park.

    Funding might be raised from government sell-offs including the government’s recent announcement to privatise its 30% stake in brewer Bralirwa. The government has said it will sell 25% of its stake to the public and 5% to Dutch brewer Heineken, which already has a 70% stake in the company. The 50-year-old brewer, Rwanda’s largest, also bottles Coca Cola products.

  • Govt prioritizes Made-in-Rwanda, infrastructure in 2017/18 budget

    {The Government of Rwanda has decided to increase spending by Frw 140.7 billion from Frw 1,954.2 billion indicated in the 2016/17 revised budget to Frw 2,094.9 billion in the 2017/18 fiscal year, the Finance and Economic Planning Minister has said.}

    Presenting the 2017/18 National Budget to a joint parliamentary session yesterday, Minister Claver Gatete pointed out that generally economic plans enshrined in the 2017/18 budget as well as medium term will focus on promoting investments and locally made products hence the theme: “Sustainable growth through infrastructure development and promotion of Made in Rwanda”. In this regard, Minister Gatete noted that Rwanda’s economy is expected to grow by 6.2% in 2017 and 6.8% in 2018.

    {{Resources}}

    Government expects to finance 66% of the 2017/18 budget through resources, 17% through loans and expects 17% to come from grants through budget and project support.

    “Government’s objective is to reduce the reliance on external donor support especially where grants are concerned. However, this support remains vital for our development,” Minister Gatete told lawmakers.

    The 2017/18 domestic revenue is projected at Frw 1,375.4 billion (66% of total budget) and rises to Frw 1,738.2 Billion representing 83% of the total budget when combined with loans.

    The increase in domestic revenues is attributed to Frw 118.9 billion increase in tax revenue collection from projected Frw 1,081.4 billion to Frw 1,200.3 billion.

    Total grants are estimated at Frw 356.7 billion compared to Frw 326.6 billion in 2016/17 revised budget. Total external loans are estimated at Frw 362.8 billion in 2017/18 and Frw compared to Frw 375.1 billion in the 2016/17 revised budget on account of revised projections based on the status of the execution of projects.

    The Minister of Finance and Economic Planning ,Amb. Claver Gatete during the presentation of the 2017/2018 draft budget yesterday.

  • BK nets Rwf 5.6 billion in 2017 first quarter

    {Bank of Kigali earned Rwf 5.6 billion net profit in the first quarter of 2017 a 5.8% growth of similar period last year.}

    The bank’s total assets grew to Rwf 661.6 billion.

    The Chief Finance Officer at BK, Nathalie Mpaka has told the media that BK made a good progress in the past few months.

    Clients’ deposits increased by 3.5% rising from Rwf 419 billion to Rwf 433.7 billion. Offered loans increased by 10.4% compared to similar period last year rising from Rwf 385.8 billion to Rwf 426.1billion.

    The CEO of BK, Dr Diane Karusisi told the media that they want to increase loans to spur development.

    “We currently have Made in Rwanda in our country, a program aimed at promoting manufacturing and buying local products. We are analyzing such good projects to provide funding. It is something interesting for us,” she said.

    “We will be supporting Rwanda’s economy while expanding our activities. We are looking for good projects in which to invest because it is important to the economy, job creation and expanding trade,” she added.

    BK recently announced 50 projects among which the most outstanding ones will receive a loan of Rwf 60 million at zero interest rate.

    By 31stMarch 2017, BK had 241,300 retail customers and 25,100 corporate customers, 1321 agents, 79 branches, 93 ATM and 1038 Point of Sales (POS).

    The Chief Finance Officer at BK, Nathalie Mpaka has told the media that BK made a good progress in the past few months.
    The CEO of BK, Dr Diane Karusisi told the media that they want to increase loans to spur development.

  • Moody’s downgrades China over surging debt fears

    {Beijing rejects ratings agency’s assessment, saying it overestimated the risks to the Chinese economy.}

    International ratings agency Moody’s on Wednesday cut China’s credit rating for the first time in nearly 30 years over concerns about its growing debt mountain.

    The one-notch downgrade, to A1 from Aa3, comes as China, the world’s second-biggest economy, grapples with the challenges of rising financial risks stemming from years of credit-fuelled stimulus.

    “The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows,” the agency said in a statement, while also changing its outlook for China to stable from negative.

    China’s foreign ministry rejected Moody’s assessment.

    It said in a statement that the downgrade – the agency’s first for the country since 1989 – overestimated the risks to the economy, underestimated Beijing’s industrial reform and financial strength and was based on “inappropriate methodology”.

    Estimates of China’s total non-government debt have risen from the equivalent of 170 percent of annual economic output in 2007 to 260 percent last year.

    Over the same period, Chinese economic growth fell from 14.2 percent to 6.7 percent in 2016, though that still was among the world’s strongest. The finance ministry noted the growth rate ticked up to 6.9 percent in the quarter ending in March and said tax revenue rose 11.8 percent in the first four months of the year.

    China’s leaders have identified the containment of financial risks and asset bubbles as a top priority this year.

    Beijing is trying to steer the economy to slower, more sustainable growth based on domestic consumption instead of investment and exports. But growth has repeatedly dipped faster than planners wanted, raising the risk of politically dangerous job losses. Beijing has responded by flooding the economy with credit.

    “The planned reform program is likely to slow, but not prevent, the rise in leverage,” Moody’s said.

    “The importance the authorities attach to maintaining robust growth will result in sustained policy stimulus, given the growing structural impediments to achieving current growth targets. Such stimulus will contribute to rising debt across the economy as a whole.”

    While the downgrade is likely to modestly increase the cost of borrowing for the Chinese government and its state-owned enterprises (SOEs), it remains comfortably within the investment grade rating range.

    China’s Shanghai Composite index fell more than one percent in early trade before paring losses, while the yuan currency in the offshore market briefly dipped nearly 0.1 percent against the US dollar after the news.
    The Australian dollar, often see as a liquid proxy for China risk, also slipped.

    Moody’s said it expects the government’s direct debt burden to rise gradually towards 40 percent of GDP by 2018 “and closer to 45 percent by the end of the decade”.

    Beijing has identified the containment of financial risks and asset bubbles as a top priority this year

    Source:Al Jazeera

  • Rwf 2,094.9 billion for 2017/2018 budget

    {The Minister of Finance and Economic Planning, Ambassador Claver Gatete has presented a draft budget for 2017/2018 showing a significant rise from Rwf 1954.2 billion in 2016/2017 to Rwf 2094.9 billion. }

    Internally generated revenues and loans account for 83% of the total budget; 17% will come from foreign aid.

    As he presented the draft budget to both chambers of the parliament, Minister Gatete explained that recurrent budget take Rwf 1122.9 billion while development budget activities will take Rwf 774 billion.

    A total of Rwf 159.1 billion will be allocated to public investment like construction of Bugesera international Airport and expanding RwandaAir activities among others.

    It is expected that the nation’s economy will grow by 6.2% in 2017 and 6.8% in 2018.

    The Minister of Finance and Economic Planning, Ambassador Claver Gatete presenting the draft budget for 2017/2018.

  • UN body warns region against signing trade deal with EU

    {A United Nations think-tank has warned the East African Community against entering into an Economic Partnership Agreement with the European Union arguing that it will neither spur economic growth nor bring wealth to the region’s citizens.}

    The United Nations Economic Commission for Africa (UNECA) says in a report that if the EPA is signed, local industries will struggle to withstand competitive pressures from EU firms, while the region will be stuck in its position as a low value-added commodity exporter.

    “If the EAC-EU EPA is fully implemented, the region risks losing trading opportunities with other partners, industrial output, welfare and GDP,” the 45-page report seen by The EastAfrican says.

    The report titled Analysis of the Impact of the EAC-EU Economic Partnership Agreement on the EAC Economies is yet to be made public and is expected to be discussed by the Council of Ministers in the “days to come,” according to sources at the EAC Secretariat.

    The report, commissioned by the EAC Secretariat, is likely to further polarise the position of the Community’s members on the EPA, which Kenya and Rwanda have already signed.

    The two countries were opposed to the commissioning of the study that was requested by Tanzania towards the end of last year.

    Uganda said it would only sign the EPA if there was consensus among the EAC members while Burundi refused to sign the agreement until the EU lifts sanctions imposed on Bujumbura in 2015.

    Sources say Rwanda and Kenya have already said they will not discuss the report at the next Council of Ministers meeting.

    The EU-EAC EPA promises duty-and-quota free access to EU markets for East African goods in exchange for a gradual opening up of the region’s markets to European products.

    However, UNECA says the removal of taxes on capital goods from Europe will cause the EAC accumulated revenue losses of $1.15 billion per year. The market would be opened up over a 25-year period and capped at 80 per cent market access.

    The UNECA findings are in direct conflict with a 2014 report by the European Commission, which shows that the region will experience an economic boom due to improvements in market access to the EU.

    But according to David Luke, co-ordinator of the African Trade Policy Centre at UNECA, the deal with Europe will be calamitous unless EAC countries are able to clearly define what their infant industries are, as well as identify sub-sectors they intend to protect.

    “While the EPA purportedly intends to respect regional integration programmes, they are adding to the complexity of the task. Additional burdens are created through provisions that complicate or contradict the agreements African states have with each other or are about to make,” Mr Luke said.

    Rwanda’s Minister of Trade, Industry and EAC Affairs, Francois Kanimba, said the report is a “political tool” and a step back in long-term negotiations to secure a positive deal with the EU.

    A rose flower farm in Kenya. The EU accounts for 31 per cent of Kenya’s export market, especially for cut flowers, tea, fresh vegetables and coffee. The EPA deal is expected to ensure continued duty-free and quota-free access to the EU for all EAC exports.

    Source:The East African

  • World Bank Report names Rwanda among resilient economies

    {In its report released last week, the World Bank names Rwanda and six other African nations as countries that have exhibited economic resilience in recent past that saw them post annual growth rate above 5.4% in 2015-2017.}

    The six others include Côte d’Ivoire, Ethiopia, Kenya, Mali, Senegal and Tanzania.

    The report, dubbed Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, points out that the aforementioned economies registered upswing in economic performance partly on account of strong domestic demand.

    “These countries house nearly 27% of the region’s population and account for 13% of the region’s total GDP,” it said in a press statement issued last week.

    Rwanda’s economy grew by 5.9% in 2016, according to figures from the National Institute of Statistics of Rwanda (NISR).