IGIHE

Category: Business

  • BK Shares Attract 274% Subscription

    The Finance and Economic Planning minister John Rwangombwa has announced 274% over subscription for the recently launched Bank of Kigali Initial Public Offer (IPO).

    The government sold its 45% stake in Bank of Kigali, the leading bank in the country by assets, for $62.5 million in an IPO.

    The shares were priced at Rwf 125 in the IPO in which the government was offloading 300.3 million shares.

    He further pointed out that over subscription is a good sign that shows people have confidence in the economy. “This shows that there’s an appetite for assets in this economy,” the finance minister remarked.

    In this respect, all applicants totaled to 6,636 of shares including institutional and retail investors whereby 75% represent local applicants.

    Initially, BK had targeted to raise Rwf 37.5 billion but instead attracted submissions amounting to Rwf 103 billion which is rated at 274 %.

    The applications came from both local and international interested buyers, and according to Rwangombwa. “A 40% pool was allocated to international investors, 15% to regional institutional buyers and another 15% to domestic institutional investors, 27.6% to retail investors while 2.4% was set aside for BK management,” he remarked.

    The bank’s listing will follow that of brewer Bralirwa in which the government sold a 30% stake last year.

  • RwandAir Purchases 2 Boeings

    RwandAir Purchases 2 Boeings

    Before the end of October the national carrier RwandAir will have two 737-800 Boeing carriers at a cost of US$ 85 million.

    The new acquisition aims at strengthening RwandAir’s performance on long distance routes, while small airplanes would be used to strengthen regional routes; South Sudan’s Juba , Zambia’s Lusaka and Zimbabwe’s Harare.

    The RwandAir Chief Executive Officer John Mirenge noted that the purchase of the two bigger airplanes were timely given the 20% growth of its clients every month.

    The national carrier has been able to purchase two Boeings through US$ 85 million a loan from the Eastern and South African Trade and Development Bank (PTA bank) today the latter disbursed the remaining US$60 million.

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    Signing the loan on behalf of the government the minister of Finance and Economic Planning John Rwangombwa noted that a lot of efforts were inserted to improve the national carrier since it promotes economic growth.

    Michael Gondwe the PTA president noted that the bank has been influential in the fleet acquisition process for RwandAir since the carrier announced its plans towards an owned fleet in 2009 with the purchase of two small planes CRJ200 and also in making the pre-delivery payments towards the soon to arrive two Boeing planes.

    “This is the third time in many years that I’m coming to Kigali to conclude an agreement for the purchase of air craft’s, and this is a proof that RwandAir is growing rapidly in line with the country’s noble vision of making Rwanda an aviation hub for the rest of the continent,” he remarked.

    Over the last decade, a total of over US$ 150 million, inclusive of the airplanes , has been made available for the project and trade financing activities.

    “We have financed projects in tourism, aviation, transport and agri-business and real estate amongst others,” he remarked.

  • EXPO 2011: Traders decry High taxes, Poor Customer Care

    It’s just one week since the International Trade Fair (EXPO) 2011 kicked off varied commodity exhibition, some business participants have expressed dissatisfaction, especially on tax rates.

    Exhibitioners who exclusively talked to igihe.com noted that major areas need extensive attention to boost business environment in Rwanda. These include; business communication, customer care services, bureaucracy, friendly customs union staff and high tax fares.

    Shelter Msangi of pina Fashon Company from Dar es Salaam, Tanzania noted: “The tax charges here are extremely high as compared to other countries in the region yet even the purchasing power is low.

    “I don’t think I can make profitable business in Rwanda with such exorbitant taxes. Yet they are telling us that we are in EAC and instead things are worsening as time goes on.”

    Dr. Lucy Samky, Managing Director, Rafiki Herbalist from Arusha-Tanzania said: “If revenue charges are cut down like in other regional countries, then the business environment in Rwanda is the best and this can entice me to start business in Rwanda.

    “They should reduce tax charges and train lower cadres on issues of EAC partnership in order to increase business investments.”

    Elsie Otieno, Managing Director of Impact Marketing Kenya, a corporate branding company said: “We have partners here and we are soon opening a shop in Kigali and we have already registered it.

    “Transportation process has no problem but the problem comes from customs union, right here in Kigali where there is full of bureaucracy.

    “We came here for the EXPO but since last week before the show started, our products have been locked at Majerwa and released after three days and this is not doing business at all.
    “Tax fares and communication breakdown is really crippling business environment in Rwanda. We told them this is COMESA; our government and COMESA secretariat had already told us that we shall not pay taxes.

    “I was forced to pay taxes, yet I am just exposing my locally produced goods and not selling” Otieno laments adding: “Even the tax I paid at first I was told to pay Frw 50.000 another tax officer said it should be Frw 45.000, another tells me Frw 10.000 …and I was really pissed off and since I knew my rights, finally I ended paying Frw5,000” Otieno revealed.

    She however, hastened to clarify that such contradicting tax rates by the tax officers is not corruption but called it “communication breakdown” because people are not willing to understand the law imposed by the government.

    She said it’s very important for the government of Rwanda to stand up and educate people at the ground level particularly the customs union lower cadres about the East African community partnership first, otherwise doing business in Rwanda is messing up.

    A Burundian Entrepreneur who never wanted his names to be published told igihe.com; “We know our rights when we come to Rwanda but it has been violated here particularly in customs union.

    “They have to change the system of handling EAC people and know that we are one and therefore, should be given the first priority.”

    Jane M Munyao, Chairperson of East Africa Women Entrepreneurs pointed out: “We are all Rwandans because we are in East Africa Community and we share brotherhood, but we are anoyed because when it comes to doing business in Rwanda, the first priority is given to foreigners like those coming from Pakistan and other Asian countries.

    “ They shouldn’t charge taxes on goods produced in EAC region like they are doing.”
    According to her, all sectors involved in doing business should educate their juniors because they are the major hindrance to the business community and they lack customer care service delivery, they have a lot of bureaucracy.

    Andrew Lubaale, Trade Show Coordinator of Madhvani Group said: “Top officials here are very good and welcoming but the biggest challenge upon getting into the country is the poor assistance from lower cadres.

    “My personal experience is that I was coming to Rwanda with company’s products and reached at the Rwandan border at 2pm but I left the place at about 5:30pm and from there my truck is again locked up at Majerwa for 3 days.

    “Above that they are billing me for all the days it has been there, yet it’s not my mistake and I was really frustrated.

    “I also had to pay for the clearing and forwarding company and the amount I paid is now equivalent to the items I brought yet I am just exposing and not selling, is this viable business?

    According to Lubaale, the items he brought cost him Uganda Shs 974, 000, paid clearing agency Shs 900, 000, to get the truck out Majerwa cost him Frw11, 000 for packing, transporting back the customs’ agent took him Frw7,000 and renting the stand took him US$1350.

    John Tumwesigye, the Marketing Manager, Movit Products based in Uganda observed that: “Rwanda’s doing business should first harmonize tax fares, bureaucracy in custom unions, and train workers about customer service handling because these are the only areas that hinder Rwanda’s business environment otherwise Rwanda is the best country to do business from”

  • Women accuse Police of Sexual Harassment at EXPO

    Foreign women investors attending the 14th international Rwanda trade show are angered by the manner with which they are handled at Police checkpoints at Expo grounds which they say amounts to sexual harassment.

    However, Police spokesperson, Supt. Theos Badege said: “There is no way to avoid it because when a metal detector makes an alarm while checking a person in some parts of the body, they end up using hands to conduct a thorough search, and this is widely professional for security purposes.”

    Exclusively speaking to igihe.com, over 10 foreign females exhibiting their products at Expo grounds raised the same issue saying it is unprofessional and sexually abusive.

    An Exhibitor from Kenya who never wanted her names to be published in media noted, “Am really frustrated by the way the police corps are treating us at the entrance.
    “How can a young female constable who is supposed to be my granddaughter start touching me all the body including my breasts and private parts? “Is that professional way of checking people? She wondered.

    She said, “I like security in Rwanda because it is the first I think in the region, but they should also organize and bring metal detectives and scanners to do it in a professional way because some of us who are coming from different cultures take it as sexual harassment”.

    Joyce Waboyi also an exhibitor said, “We want to establish business in Rwanda and open offices in Kigali but I will first find out if this is the way of checking people even elsewhere.

    “The way it’s done here is abusive and discourages me because I can’t stand it according to my culture.

    A male exhibitor preferring anonymity for personal safety said ,“Rwanda is a country internationally respected and putting up other measures for detectives like detective gadgets and scanners is possible but I don’t know why the equipment are not brought to an international Trade Fair like here.”

  • Rwanda’s 2011 EXPO opens doors

    Today July 28, Rwanda’s 14th International Trade show has set off with the increased number of foreign exhibitors reaching up to 141, coming from over 19 countries and including new features to be showcased.

    The official opening will be scheduled tomorrow Friday, at the EXPO grounds in Gikondo and the Chief Guest is not yet known according to the Public Relations Officer in MINICOM.

    Ephraim Karangwa, the Acting Director of Investments and Special Projects at PSF noted; “419 exhibitors have already registered, 141 of who are designated as foreign exhibitors. 721 stands are already booked.”

    Karangwa added that the total number of exhibitors has declined from last year’444 to 419 while the number of foreign exhibitors has risen up from 99 registered last year to 141.

    The official opening ceremony will also be marked by new features including fashion show from a renowned African Designer; Patheo Ouedraogo from Senegal.

  • Rwandatel liquidates to pay creditors

    The commercial court of Nyarugenge has finally ruled that Rwandatel should liquidate its assets in order to pay debts amounting to US$ 88.9 million.

    Creditors have been authorized to submit their claims to the company not later than 4th august.

    Richard Mugisha the company’s interim administrator noted that he was optimistic that selling the assets would make the situation better.
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    Rwandatel assets are valued at approximately US$50 million though the assessment process is still underway. “I believe we have stable equipments which would attract investors speedily,” he remarked.

    Once the assessment is complete, the company aims to advertise its assets in August. Mugisha further pointed out that the bid will be open. This means that even local telecommunication companies would be allowed to give their offers.

    “We have decided to sell our assets in form of a package which will enable us continue with our day to day activities without any obstruction,” he remarked.

    Mugisha advised the court to liquidate the company since in the recent months he has headed the company it has not shown progress of growth.

    The liquidation of Rwandatel is in Rwanda’s full compliance with the UN Security Council resolution to freeze assets belonging to Libyas Col. Muammar Gadaffi’s and his cronies’ assets and imposing travel bans.

    The luxury laico Hotel in Kigali was also frozen. The hotel will return to its former name Umubano Hotel and Soprotel, a private company will take over the hotel management.

    The United Nations Security Council earlier this year unanimously adopted a resolution that could put Muammar Gaddafi and his family in the dock of an international court for crimes against the Libyan people.

    In a 15-0 vote, the council ordered all UN member states to freeze the assets of the Libyan leader, his daughter and four of his sons. They and another 10 key members of the regime were banned from travelling outside the country.

  • Singapore Investor takes over MAGERWA

    Soon activities at MAGERWA and branches will be much quicker than before. This follows announcement by the new investor Larry lam, chairman of Portek a Singapore operator of medium sized containers and multipurpose ports.

    Portek now owns 66% shares of MAGERWA and it will be in charge of the day to day activities of the once public bonded warehouse. Lam noted that much effort would be put in ensuring better customer care, better service delivery and reducing congestion at the warehouse.

    The Singapore based company will also construct several dry and seaports at the two largest ports in the region situated at Mombasa and Dares salaam.

    “We intend to buy several lands closer to the ports at which goods from Rwanda and region would be offloaded. Currently, the two major ports are holding more than their capacity a fact that delays activities,” he remarked.

    In Rwanda more storehouses will be constructed. “With new branches cargo trucks for instance will offload quickly and service delivery would be enhanced reducing the current long queues,” he commented adding, “there will also be a reduction of miscellaneous costs.”

    The minister of trade and industry Francois Kanimba hailed the new investors saying that they represent a country that has shown tremendous economic progress. “We’re happy that you bring to Rwanda professionalism and replicating some of the best practices,” said Kanimba.

    The minister noted that improvement of the warehouse would be a big achievement for the landlocked country.

  • Fund deposits Rwf 11 Billion for borrowers security

    Difficulties of accessing bank credit especially due to lack of collateral shouldn’t worry people anymore.
    The Business Development Fund (BDF) is offering banks a financial security on behalf of borrowers as a way of promoting lending to upcoming business.

    BDF is an established company meant to support SME’s by offering credit guarantee facility. They generate their funds from government entities such as the National Bank of Rwanda (BNR) Rwanda Development Bank (BRD) and several ministries.

    The preferred ventures are Small and Medium Enterprises (SME’s) as well as agriculture.

    In his remarks the minister of trade and industry, Francois Kanimba noted that the grant was timely with the government’s campaign to strengthen SME’s through encouraging the private sector and stakeholders to join the cause.

    The BDF Chief Executive Officer Desire Rumanyika was quick to support the minister adding that the grant also aimed at facilitating upcoming businesses to access finance as a way of promoting the economy, of which 90% of its growth is gained from SME’s.

    He further pointed out that the fund was formed to the tune of Rwf 11 billion and that Rwf 1.5 billion of the amount has be channeled to several banks to support agriculture projects.

    This supplements a BDF grant for Rural Investment Facility which was availed by the ministry of agriculture and animal resources.

    The grant is worth US$ 10 million with main purpose of providing incentives for both financial institutions and for entrepreneurs making productive investments in agriculture.

    About accessing the grant, an applicant should present a solid business plan meaning it should be technically feasible, financially viable, with projected cash flow that will enable repayment within a maximum of 12months.

    The project should also observe standard environmental norms, yet in case of amounts below Rwf 5million a simplified business plan will suffice.

    In agriculture the three categories of investments that qualify include; primary production, processing of the products and agriculture support services.
    BDF will also offer advisory services related to investment, corporate and microfinance development.

  • New Business initiative to promote Rwanda’s Young Entrepreneurs

    Rwanda’s Junior Chamber International (JCI) organizers for Terimbere Business Plan Competition have advised the youth to continue sending their business proposals before end of August.

    The business competition which was initiated by the JIC- Rwanda Chapter in collaboration with stakeholders aims at promoting private entrepreneurship, with emphasis on business proposals showing viable employment opportunities.

    According to Fabrice Shema Ngoga, the JCI World Assign in charge of Africa and Middle-East, the business proposals show a reasonable sustainability for at least more than three years.

    He explains that application forms are currently available from JCI’s website www.jci/cc/local/rwanda then the filled forms can be sent to terimberechallenge@gmail.com.

    He, however, explained to igihe.com that applications will be obtained from those that want to improve their business ventures and those willing to start new viable ones and that those interested are only allowed to send one business proposal.

    “Even those who are in groups will be required to nominate a representative who will defend their single business plan,” he stressed.

    JCI’s executive secretary in Rwanda, Albert Nzamukwereka was quick to clarify on how the selection process will be conducted: “Those nominated will be taught how to professionally write business proposals by mentors that will also advise on the execution process,”.

    After the second phase, all nominees will defend their business proposals before a panel of judges most of whom are foreigners.

    Applicants are therefore obliged to draft their proposals in international renowned languages such as French and English.

    Ngoga also pointed out that those in the second phase have high chances of proceeding with their business whether they are chosen or not since at that stage their proposals will be financially viable to attract credits from banks.

    The winners at the competitions will be given loans ranging from US$ 5,000 to US$1 million.

    “Some amount will also be given to winners as an appreciation.” Ngoga said without specifying the amount.

    JCI is an international business initiative that currently has a membership of 200,000 people from 120 countries.

    Members are composed of young entrepreneurs, professionals and university students who are ambitious towards improving their lives and the community at large.

  • Economy to grow at 7% rate in 2011

    By:Randa Rugangazi

    Today, the Ministry of Finance and Economic Planning released the 2011/12 budget framework.

    Igihe.com has learnt that it is projected in the budget that the country’s economy will grow at a rate of 7%. The budget details the allocation of state funds for the fiscal year 2011/12.

    A budget framework paper accompanying the budget explains why certain sectors of the government will receive more or less funds in the upcoming year. It analyzes the country’s economic performance in relation to the global economy in the 2010/11 fiscal year.

    Rwanda registered an estimated annual GDP growth of 7.5percent in 2010; which was higher than the projected average of 5 percent growth in sub-Saharan Africa. In 2011, the projected growth rate for Rwanda is 7.0 percent. It may however be lower due to high fuel costs resulting in higher food prices. This is a shared risk across sub-Saharan African countries.

    The 2011/12 fiscal budget was put together with the main objectives of “safeguarding food supplies and ensuring food security and maintaining price stability.”

    In the government’s efforts to safeguard food supply MINAGRI (Agricultural ministry) within its budget of Rwf 67, 621, 050,663 some Rwf 2.5 billion will be allotted to the construction of storage warehouses for storing food surpluses.

    As for controlling the inflation rate, the government plans on reducing oil import taxes. High oil costs have been the main cause for the rising commodity prices, including food costs.

    The budget framework paper points out that Rwanda’s taxes are higher than those of other EAC countries. The government will therefore lower the taxes at the same level as neighbouring East African countries.

    The projected revenue and grants in 2011/12 fiscal year is Rwf 974 billion; with total expenditure at Rwf 1062.8 billion. Both accounts have increased compared to the 2010/11 fiscal numbers which were Rwf 844.2 billion for the total revenue and grants and Rwf 988.1 billion.

    The deficit, difference between revenue and total expenditure, was covered by financing. This usually means that the government sells bonds or borrows domestically or internationally. The deficits for 2010/11 and 2011/12 are Rwf 155.1 billion and Rwf 98.6 billion, respectively.