IGIHE

Category: Economy

  • Rwanda, Kenya agree to expedite extension of railway network

    The agreement was reached during a recent meeting in Mombasa, attended by Rwanda’s Minister of Infrastructure, Jimmy Gasore; Kenya’s Roads and Transport Cabinet Secretary, Kipchumba Murkomen; and Uganda’s Minister of State for Transport, Fred Byamukama.

    Economic Advisor Roger Te Biasu represented the Minister of Transport of the Democratic Republic of Congo at the SGR Cluster Ministerial Meeting held on Friday.

    CS Murkomen expressed his confidence that the agreement between the four countries would revive the railway project, which has been delayed by a lack of funds.

    “This historic move seeks to enable joint resource mobilisation, expedite the completion of the construction of the remaining SGR sections from Naivasha in Kenya to Uganda, Rwanda, South Sudan and DRC, and develop a roadmap that will fast-track its implementation,” said CS Murkomen.

    The initial plans were to extend Kenya’s SGR line from Naivasha to Kampala, Uganda, before extending it to Rwanda and South Sudan.

    However, the project has faced a five-year delay due to a lack of resources.

    At the Mombasa meeting, the four partners agreed to pursue resource mobilisation for the high-speed railway as a joint project.

    “It was a challenge to do the project piecemeal, we cannot have SGR in Malaba to Kampala if Naivasha-Malaba is not complete. That is why we are seeing funds to ensure the sections are done simultaneously,” stated Minister Byamukama.

    The construction of Kenya’s SGR cost $3.6 billion, financed by a loan from China’s Exim Bank. The SGR has significantly reduced the cost of transporting cargo from the Port of Mombasa to the hinterlands.

    According to CS Murkomen, the Friday meeting also sought to harmonise the planning and development of inland water transport infrastructure in order to provide seamless multimodal transport services and speed up the review of the Tripartite Agreement on water transport on Lake Victoria.

    “As a country, we seek to leverage private sector partnerships in the extension of our SGR line in an effort to, not only ensure seamless cross-border movement of goods and people, but also create special economic zones along the corridor that will transform areas with stop stations into economic hubs,” added Murkomen.

    The Minister of Infrastructure, Jimmy Gasore, makes his remarks during the SGR Cluster Ministerial Meeting held in Mombasa. Beside him is Kenya's Roads and Transport Minister Kipchumba Murkomen.

  • Inside Kenyan companies minting billions in Rwanda

    Rwanda ranks second on the African continent in terms of ease of doing business and 38th globally, according to the World Bank.

    One of the attractive sectors that continues to mint profits for Kenyan firms listed on the Rwanda Stock Exchange (RSE) is the banking industry, which has attracted major Kenyan banks among the more than 20 banks, microfinance institutions, and rural savings and credit cooperatives operating in the country.

    Equity Bank which opened a subsidiary in Rwanda in the fourth quarter of 2011 continues to thrive in the local market due to its focus on empowering and elevating communities at the grassroots level.

    With headquarters at Grand Pension Plaza in the capital Kigali, Equity has expanded to open 46 branches and 56 ATMs across the country.

    Equity Bank Rwanda was ranked third among banks licensed by the National Bank of Rwanda in terms of reported total assets, amounting to RWF 682.9 billion as of September 30, 2023.

    The bank completed a merger with Cogebanque on November 30, 2023, increasing its total assets to RWF 989.7 billion, positioning itself as the second-largest bank in the country by asset base.

    Additionally, the bank reported growth in its deposits, reaching RWF 749.7 billion, along with an expansion to 4,516 agents and 1,777 merchants.

    Kenya Commercial Bank (KCB) is another banking giant from Kenya operating a subsidiary in Rwanda.

    KCB Bank Rwanda, which entered the Rwandan market in 2014, completed the acquisition and merger of the Rwandan lender Banque Populaire du Rwanda (BPR) in 2021 and renamed it BPR Bank Rwanda Plc.

    The merger which took effect on April 1, 2022, positioned BPR Bank Rwanda Plc as the second largest bank in Rwanda, before Equity acquired Cogebanque and became the second largest bank in Rwanda in terms of asset base.

    BPR, with over 150 branches countrywide, registered RWF 25.8 billion in profit after tax in 2023. The lender also recorded a significant increase in its total revenue, marking a 13 per cent rise to RWF 81.1 billion. The customer deposits also rose by 33.4 per cent to hit RWF 589 billion.

    In the same period, the bank’s total assets also registered a substantial growth of 15.2 per cent to reach RWF 860 billion.

    Other Kenyan banks with subsidiaries in Rwanda are I&M Bank and NCBA.

    I&M Bank Group from Kenya ventured into the Rwandan market in 2012 with the acquisition of the majority stake in Banque Commerciale du Rwanda (BCR).

    I&M Bank Rwanda’s net profit for the year ending December 31, 2023, increased by 15 per cent, largely driven by growth across all business segments.

    In audited financial results announced on March 22, 2024, the bank disclosed that its profit after tax rose to RWF 10.7 billion from RWF 9.3 billion in 2022 with the headline earnings rising by 18 per cent to hit RWF 46.7 billion.

    On the other hand, NCBA began operations in Rwanda in 2017 with a micro-finance license.

    In March 2018, the bank merged with Crane Bank and received a license in July 2018 to operate as Commercial Bank of Africa (Rwanda) PLC. The bank later changed its name to NCBA Bank Rwanda PLC on October 15, 2019, after the Board of Directors’ resolution to harness the strengths of NCBA Group PLC.

    The bank recently announced a net profit of RWF 6 billion for the year 2023, an increase of 70 per cent compared to the 3.5 billion Rwandan francs recorded in 2022.

    Besides the banking sector, a number of Kenyan companies are operating in Rwanda in different sectors including the media, where the Nation Media Group (NMG) leads the pack.

    NMG, which was listed on the RSE in November 2010, mainly operates a regional paper, The East African, in Rwanda.

    The company also operated KFM radio station before it shut down in 2016 over financial constraints.

    NMG has operations in print, broadcasting and digital media in Kenya, Uganda and Tanzania. The brands include NTV Kenya, NTV Uganda, Daily Nation (Kenya), Taifa Leo (Kenya), Daily Monitor (Uganda) and Mwananchi (Tanzania), among other products.

    Other sectors Kenyan companies have invested in Rwanda are construction, insurance, aviation, education, agribusiness, tourism and hospitality.

    In the insurance sector, Britam Insurance in Rwanda traces its roots to Kenya and is among the leading insurance firms offering services to Rwandan communities.

    In the education sector, Mount Kigali University was previously a campus of Mount Kenya University in Kenya. On April 20, 2023, after an elaborate process that lasted more than five years, it was granted full accreditation to operate as Mount Kigali University.

  • Bridging the gap: Banks meet Rwanda Agri-MSMEs to discuss inclusive financing

    The event organized by the United States Agency for International Development (USAID) under the Feed the Future Initiative brought together more than 80 select MSMEs, often excluded from financing by commercial banks.

    Representatives from Equity Bank and the Bank of Kigali attended the event held at the Four Points by Sheraton Hotel in Kigali, where they had an opportunity to showcase products targeted at the groups.

    Representatives from Equity Bank engage local MSMEs during the networking event.

    The event also offered the MSMEs an opportunity for agribusinesses to pitch their businesses and initiate Business-to-business (B2B) partnerships to expand their businesses.

    The Bank of Kigali’s presentation focused on working capital facilities and how the bank can support agri-MSMEs to access working capital for daily operations.

    The other products the bank showcased touched on financing for land acquisition, post-harvest activities, irrigation equipment, as well as the purchase of vehicles.

    The bank also took the MSMEs through various unsecured facilities aimed at supporting their cash flow.

    Alexis Bizimana, the Head of Agribusiness at the Bank of Kigali, said the bank offers different financing products for MSMEs, with interest rates ranging from 8 to 18 per cent per annum.

    “We have different loan schemes for commercialization and delisting for agriculture transformation targeting production at an interest rate of 8 per cent. The second one is export growth funds, where we support surety for exporters at an interest rate of 12 per cent. We have an economic recovery fund for agri-processing available at 6 to 8 per cent. If we have customers under these categories; they are going to get concessional funding. Otherwise, if you come at a commercial rate, we give at an interest rate of 16 to 18 per cent,” explained Bizimana.

    Michael Baingana, the Director of Finance and Investment at Hinga Wunguke, a USAID Feed the Future support program that enhances agriculture productivity and monetization, said there are still gaps that banks could take advantage of and develop more products targeting MSMEs in the agriculture sector.

    “We thought that perhaps we could bring them [MSMEs] to the forefront because they potentially have some very good businesses in agriculture. We have people in production, processing, and other input suppliers, mostly women, people living with disabilities, and youths,” said Baingana.

    “We are trying to see if the banks could unlock, in terms of understanding the potential in agriculture, and perhaps come up with new projects that could even help them make money from potentially very redundant but productive sectors.”

    Uwera Emma, the Founder and Managing Director of I&J company, a seed company producing maize and soybeans, was among the MSMEs who attended the event.

    She lauded the networking initiative, saying it helped raise awareness about financial products targeted at entrepreneurs like her.

    “There are some financial institutions and banks doing things that are very beneficial to us, but you find that we are not aware. For instance, the bank I am using can only give me RWF 5 million without collateral, but these ones go up to RWF 17 million at an interest of about 9 per cent,” stated Emma.

    Jessica Spence, the Economic Growth Office Director at USAID, emphasized that access to inclusive financing is crucial to improving food security and driving the economy.

    “Most assessments show that one of the biggest problems is that financial institutions do not understand the agricultural sector and have limited products that speak to the needs of actors within the agricultural sector,” stated Spence, adding, “The good news is that financial institutions are beginning to crack the nut.”

  • Beyond gorillas: Inside diverse reasons travelers flock to Rwanda

    While the perception of foreigners visiting the country has always been centered around leisure, tourism, and enchanting trips to gorilla sites, it’s interesting to note that more than half of the foreigners who visited Rwanda in 2023 (51.1%) did so for business purposes.

    The growth can also be linked to a significant number of foreign investments registered in Rwanda, which also grew by 50 per cent to hit $2.4 billion (RWF 3 trillion) in 2023. These investments are projected to create more than 40,000 jobs in the next five years, according to the Rwanda Development Board.

    The latest statistics from RDB show that 22.2 per cent of persons who entered Rwanda in 2023 were in transit to various destinations worldwide.

    Another 11.2 per cent of the foreigners visited Rwanda for holiday and recreational purposes, with the majority of this number comprising 25,927 gorilla visitors.

    Notably, the number of gorilla visitors in 2023 marked a 29.4 per cent increase from 2022, the highest number of gorilla visitors recorded in Rwanda’s history.

    Gorilla tourism is a major revenue earner for Rwanda, with tourists paying at least US $1500 per person to see gorillas in the country. This fee covers the gorilla trekking permit, which grants access to the park and the gorillas.

    Rwanda netted $620 million (RWF 793 billion) in tourism revenue in 2023, representing a 36 per cent growth compared to 2022.

    Meanwhile, 6 per cent of the foreigners who visited Rwanda in 2023 were in the country for official missions, while 3.9 per cent of the visitors were there to attend conferences and other international forums.

    Another 3.7 per cent of the visitors were in Rwanda for unspecified reasons, 1.3 per cent for education purposes, and 0.6 per cent were in the country for medical reasons.

  • Top 10 investment sub-sectors generating most jobs in Rwanda

    Latest statistics from the Rwanda Development Board (RDB) show that manufacturing is expected to create 9,900 new job opportunities over the next five years, accounting for a quarter of the jobs projected to be created in the next five years.

    According to RDB, investment commitments registered by the Board in 2023 are expected to generate 40,198 job opportunities by 2029. The investment commitments grew by 50 per cent to reach $2.4 billion (RWF 3 trillion) compared to the previous year.

    RDB forecasts that the agriculture sub-sector will continue to thrive, contributing to the creation of 7,600 jobs over the same period.

    Real estate is expected to create 6,200 new jobs by 2029 while the agro-processing sub-sector will contribute some 4,400 jobs to the economy.

    Additionally, the construction sector will generate 2,700 jobs while the accommodation and food services sub-sector will create 2,600 job opportunities over the next five years.

    Electricity, gas, steam, and air conditioning supply are poised to create an additional 1,500 new job opportunities, followed by the arts and entertainment sub-sector, where approximately 600 opportunities will be generated.

    The financial and insurance sectors, along with administrative and support service activities, are expected to generate 500 and 200 jobs respectively over the next half-decade.

    It is also worth noting that most of the new jobs in the real estate, arts and entertainment, recreation, manufacturing, and construction sectors will be created in the capital Kigali, which attracted investments worth $2.1 billion (RWF 2.7 trillion). This accounts for 83.4 per cent of the total investments registered in 2023.

    The Eastern Province which attracted investment worth $262.9 million (RWF 336 billion) in 2023 will create new job opportunities in administrative and support service, manufacturing, electricity, gas, steam and air conditioning supply, agriculture, forestry and fishing sub-sectors.

    The Northern Province with investments totalling $60.8 million (RWF 77.8 billion) is expected to create new jobs in agro-processing, manufacturing, accommodation and food service activities and mining and quarrying.

    Jobs in agriculture, forestry, fishing, real estate, agro-processing, manufacturing, transportation and storage, energy, accommodation, and food services will contribute to the creation of new jobs in the Southern and Western provinces, which attracted investments totalling $46.9 million (RWF 60 billion) and $40.6 million (RWF 52 billion) respectively.

  • Kigali Special Economic Zone has generated over 16,000 permanent jobs – RDB

    Latest statistics from the Rwanda Development Board (RDB) show that KSEZ contributed to the creation of 1,300 jobs in the Rwandan economy last year.

    Established in 2007, KSEV aims to accommodate various industries, including heavy and light manufacturing, large-scale industrial plants, those needing robust national/international communication networks and firms requiring close collaboration.

    Additionally, it caters to wholesalers, chemical, pharmaceutical and plastic industries, as well as warehousing, telecommunications and other services.

    The latest report from RDB shows that 243 companies operating within KSEZ have collectively contributed $460 million (RWF 590 billion) in export revenues since its inception.

    Last year, the total revenue generated from goods and services exports amounted to $3.5 billion (RWF 4.4 trillion), representing an increase of 17.2 per cent compared to 2022.

    The top 10 exports from Rwanda were unwrought gold (incl. gold plated with platinum), zirconium ore, tin ore, tungsten ore, cement, malt extract, wheat or meslin flour, cereal flours, coffee, and tea.

    The United Arab Emirates (UAE) received the lion’s share of exports, amounting to 56.9 per cent, primarily consisting of goods such as minerals and horticulture products.

    The Democratic Republic of Congo (DRC) was second, accounting for 10.4 per cent of the exports, followed by China (5.0%), Hong Kong (2.6%), and the United Kingdom (2.2%).

    National carrier, RwandAir, transported a total of 4,595 tons of cargo, with the majority of shipments destined for Dubai, the United Kingdom, and Belgium.

    The export cargo increased by 22.7 per cent in 2023 compared to the previous year.

    RDB attributes the growth in export cargo to increased capacity out of Kigali to the UAE market and increased frequency of flights out of Kigali to London, which presented opportunities for more cargo shipments out of Kigali.

    The opening of the route to France also contributed to the growth of the export sector in 2023.

  • 51% of individual enterprises registered in Rwanda in 2023 are owned by women

    A new report released by the Rwanda Development (RDB) shows that more than half of the individual enterprises registered in the country last year were owned by women.

    Among 73,381 individual enterprises registered in 2023, 51 per cent are owned by women. Further, 34 per cent of domestic companies registered had female majority shareholding.

    RDB attributes this to ongoing efforts to achieve greater gender balance in the private sector and promote women in business. This includes training and other empowerment forums and conferences organized by the Board targeting women groups.

    The women-led investments were part of the $2.4 billion (RWF 3.08 trillion) new investment registrations recorded in the country last year, marking a 50 per cent growth compared to the previous year.

    According to RDB, 83.4% of all investments were directed to Kigali City, with the Eastern Province, which came in second, attracting 10.6% of the investments $262.9 million (RWF 337 billion).

    Northern Province attracted 2.5% of the investments totaling ($60.8 million to finish third, while Southern Province and Western Province attracted 1.9% ($46.9 million) and 1.6% ($40.6 million) of the investments respectively.

    Kigali attracted huge investments in real estate, arts, entertainment and recreation, manufacturing and construction, while the Eastern Province attracted investments in administrative and support services, manufacturing, electricity, gas, steam and air conditioning supply, agriculture, forestry and fishing.

    The Northern Province registered significant investments in agro-processing, manufacturing, accommodation and food service activities and mining and quarrying while the Southern Province attracted investments in agriculture, forestry and fishing, real estate, agro-processing and manufacturing.

    Some of the top investments recorded in the Western Province are transportation and storage, electricity, gas, steam and air conditioning supply, accommodation and food services activities and agro-processing.

    The investments are projected to create at least 40,000 jobs in the next five years.

    In 2023, the investments resulted in the creation of more than 2,000 jobs. Specifically, TekExperts generated over 500 jobs for software engineers, Kivest Ltd contributed 408 jobs through agricultural projects, and C&D Leather Shoes Production Plant added 500 jobs. Additionally, RwandMoz Ltd created 134 jobs for the Aquaculture project.

    RDB says the majority of the new jobs will be created in manufacturing, agriculture, forestry, fishing, and real estate activities sectors.

  • Kagame condemns ‘hypocrisy’ in efforts to address global North-South divide

    Speaking on Sunday, April 28, during the World Economic Forum Special Meeting in Riyadh, Saudi Arabia, the Rwandan Head of State called out what he described as hypocrisy in efforts by some players to solve problems facing developing countries in the Global South.

    “The divide is there. Let us not be vague about it. For example, if you look at it from the perspective of global shocks that we talk about, all countries in the world are affected. Of course, some are affected more than others. But that is a reminder that we need to look at the inclusiveness and collaborations that bring different entities of the world together.

    “For that, we must be able to call out hypocrisy whenever we see it. We keep talking about the North and South divide, but we don’t find quick solutions to that, yet we can,” President Kagame stated.

    At the same time, President Kagame challenged African leaders to overcome the victim mentality, stating that the continent has what it takes to thrive and narrow the divide between the global North and South.

    “In this case, I am going to argue for our continent, Africa. Africa has the fastest-growing middle class. In the not-too-distant future, it will be the only place with a growing middle class. How can you forget that this is a very important place in our world?”

    “To narrow the divide, the rest of the world has to see that this is an important place to invest in and to invest with. Secondly, it’s for Africa itself to avoid any victim mentality and start raising ourselves to the levels where we should be, and in fact, where we are — a very important geographical part of our world with a lot of resources. It’s not just natural resources but also the people,” he stated.

    He maintained that developed countries must recognise Africa as an important player in global affairs including politics and economy

    “As much as you may find problems here and there, Africa is coming together. Africa is moving forward. Different countries have decent or impressive growth of the economy. This can’t be coming from nothing but the good efforts that Africans are putting in place.

    “Therefore, it’s important that the rest of the world looks at Africa as an important entity in global affairs be it politics or economy,” President Kagame stated.

    On her part, International Monetary Fund (IMF) Managing Director, Kristalina Georgieva called for increased collaborations to increase the distribution of resources to underdeveloped countries and marginalised groups.

    “Over the last 100 years, despite a huge second world war and despite the cold war that followed, we as humanity have achieved so much. Life expectancy almost doubled, income per capita has increased eight times, with the population almost tripling. The question is: how did we do it? We did it with technology and we did it with capital accumulation, and then deployment of capital to generate that wealth.

    “Where did we fail? And we have to be honest and admit it. In a world of plenty, we still have almost 800 million people who are hungry. We failed to more inclusively share the benefits of this growth. I look forward, I am optimistic, and I think in 100 years we can achieve the same degree of wealth but with much better distribution of the benefits of growth. May we have the will to work together to achieve that,” the IMF boss stated.

  • India and UAE topped Rwanda’s foreign investments in 2023

    Most of the foreign investments registered in Rwanda in 2023, totaling $2.4 billion (RWF 3.08 trillion), originated from India and the United Arab Emirates, a new report shows.

    The report unveiled by the Rwanda Development Board (RDB) on Wednesday, April 24, 2024, shows that India leads with 7.2% of foreign investments in Rwanda, followed by the UAE at 5.6% and Germany in third place with 5.3%.

    Mozambique and Nigeria made it to the list of the top five countries with significant investments in Rwanda, with market shares of 4.8% and 4.7% respectively. They are followed by the United Kingdom (3.8%), China (3.7%), United States (3.6%) and Eritrea (2.8%).

    A majority of the investments registered by RDB, including joint ventures, were of Rwandan origin, representing 39.6% of the total investments.

    Top sectors that attracted significant investments in Rwanda in 2023 are real estate, manufacturing, and arts, entertainment, and recreation.

    According to RDB, 83.4% of all investments, totaling $2.1 billion (RWF 2.69 trillion), were directed to Kigali City, with the Eastern Province, which came in second, attracting 10.6% of the investments $262.9 million (RWF 337 billion).

    Northern Province attracted 2.5% of the investments totaling ($60.8 million to finish third, while Southern Province and Western Province attracted 1.9% ($46.9 million) and 1.6% ($40.6 million) of the investments respectively.

    Notably, Northern and Southern provinces recorded significant investments in agro processing and agriculture.

    Creating employment

    RDB noted that the new investments, which grew by 50 compared to 2022, are projected to create more than 40,000 jobs in the next five years.

    On the actual jobs created by the investments, the Board said TekExperts created more than 500 jobs for software engineers. Additionally, 408 jobs were created by Kivest Ltd through agricultural projects, and 500 jobs were created by C&D Leather Shoes Production Plant.

    An additional 134 jobs were created by RwandMoz Ltd for the Aquaculture project.
    Auto Group also contributed to job creation with 613 new positions.

    President Paul Kagame and India Prime Minister Narendra Modi during India-Rwanda Business Forum organised by RDB in July 2018.

  • Rwanda’s top 10 exports in 2023

    According to the Board, the top 10 exports include unwrought gold (including gold plated with platinum), zirconium ore, tin ore, and tungsten ore.

    Other top exports were cement, malt extract, wheat or meslin flour, cereal flours, coffee, and tea.

    The United Arab Emirates received the largest share of exports, amounting to 56.9 percent, primarily consisting of goods such as minerals and horticulture products.

    The Democratic Republic of Congo (DRC) came second, accounting for 10.4 percent of the exports, followed by China (5.0%), Hong Kong (2.6%), and the United Kingdom (2.2%).

    National carrier, RwandAir, transported a total of 4,595 tons of cargo, with the majority of shipments destined for Dubai, the United Kingdom, and Belgium.

    RDB, in a report unveiled on Wednesday, April 24, 2024, disclosed that exports cargo increased by 22.7 percent in 2023 compared to the previous year.

    The surge in exports cargo has been attributed to increased capacity out of Kigali to UAE market and increased frequency of flights out of Kigali to London, which presented opportunities for more cargo shipments out Kigali.

    The opening of the route to France is also said to have contributed to the growth of the export sector in 2023.

    RDB also engaged in various initiatives to boost access to international markets for local producers, enhance product quality and foster development of new products.

    The Board said it facilitated training for 60 potential and existing exporting companies in the Manufacturing, Agroprocessing, Handcraft, and IT sectors. The training covered a wide range of topics including international market entry, packaging and labeling skills, and the protocols and rules of origin under the African Continental Free Trade Area (AfCFTA).

    Additionally, some 123 companies were assisted to access the export market through nine promotional events conducted in Tanzania, Uganda, Nigeria, Egypt, Turkey, Dubai, China, Italy, Mozambique. This led to closure of 35 export deals worth $55,763,466 (RWF 71 billion).

    “13 companies were on boarded to the International platforms- Dubuy.com, Rwandamart.rw and ArabianOrganic.com and 25 Entrepreneurs were trained on e-commerce under n-eutrentepreneur program,” the report reads in part.

    More than 287 Small and Medium-sized Enterprises (SMEs) were also reported to have benefitted from capacity building, market linkage, financial linkage and standard certification acquisition.