IGIHE

Category: Business

  • MTN Rwanda to augment mobile cash service

    MTN Rwanda plans to develop more applications on its mobile money transfer service to allow more transactions and tap into the booming demand for the facility.

    The firm announced it had transferred over Rwf12 billion ($201 million) since its launch last year with an estimated 6,000 transactions carried out daily. It has so far attracted 261,000 users and 310 agents across the country.

    “We are expanding usage of the service beyond money remittance to allow clients from financial institutions such as MFIs to pay off loans and make deposits and transfer money from their savings account to their Mobile Money account,” MTN Rwanda’s head of mobile money Albert Kinuma said.

    Millicom International Cellular’s Tigo Rwanda and Rwandatel are in the process of launching mobile money transfer services too.

    Remittance charges

    Sending money through the MTN service attracts a fee of Rwf250 ($0.42) for any transaction between Rwf1,500 ($2.6) and Rwf300,000 ($504) for those registered while the transaction cost varies between Rwf600 ($0.90) and Rwf4,000 ($6) for the unregistered.

    However, users can only send between Rwf1,500 ($2.6) and Rwf 500,000($804) — the limit set by the National Bank of Rwanda for funds transfer through the service.

    Currently, the product, in which MTN Rwanda invested over $2 million, also allows users to buy airtime and pay for electricity upon registration.

    “The Mobile Money arena is still in its infancy,” said Mr Kinuma adding that MTN Rwanda is exploring possibilities of extending the service to enable transactions across the border.

    According to BNR director of payment systems John Bosco Sebabi, while MTN’s Mobile Money has registered tremendous progress, services offered on MTN’s Mobile Money need to be brought onto the national electronic payment platform.

    “If the value stored in the telephone can actually be used to pay for goods and services without necessarily picking up cash at the agent or, if it is transferable onto accounts at the bank, the unbanked can stop using cash,” Mr Sebabi said.

    Mr Sesabi added that the bank’s strategy of modernising payments systems in the country is to change Rwanda from a cash-based to a cashless society.

    Earlier last month, the central bank licensed the country’s second mobile operator Tigo Rwanda to provide a mobile payment service (Tigo Cash). The company is set to launch the service by end of this year.

    As part of modernising the national payment system, the central bank has begun implementing the Rwanda Integrated Payments Processing System, which is geared towards making payment systems in the country efficient and reliable.

    According to Mr Sebabi, the system will support new and innovative payment instruments and systems such as mobile money.

    “A mobile phone is owned by many people, thus the growth of cellular phones supersedes the growth of usual bank accounts. The growth of mobile money is thus promising and it is a good channel for electronic payments.”

    In addition to money remittances, MTN is working with other companies such as microfinance institutions (MFIs) to allow users the option to pay loans and make savings deposits, transfer money from their savings account to their mobile money account, and so on.

    MTN Mobile Money was officially launched in February 2010. The carrier invested over $2 million in the service developmen

    Currently, Rwanda’s mobile phone penetration stands at 35 per cent, the second lowest in the region after Burundi.

  • Umubano Hotel operations normal-Caretaker

    After the enforcement of the UN resolution which declared a freeze of funds, financial assets and economic resources owned and controlled by the Libyan authorities, the government has taken full control of Hotel LAICO-UMUBANO and rebranded it to UMUBANO HOTEL.

    In an interview with Igihe, the caretaker of the hotel, Rosemary Mbabazi, noted that operations at the hotel remained normal as the government seeks a professional firm to run the establishment.

    “We want to tell the public that the hotel is running well as usual and will remain operational, and in any case, we aim to offer better services,” Mbabazi, who is also the chairperson of the Board said.

    Sources privy to the ongoing saga affecting the Libyan investments in the country indicate that even before the UN move, the Libya Africa Investment Company commonly known as LAICO had failed to honour its pledge to raise US $25million to renovate the hotel and increase room capacity from 100 to 166.

    The sources further indicated that LAICO had been financially crippled even before the UN resolution, as the government of Rwanda sought for another investor to take over the operations of the hotel.

    Laico Hotel Entrance View

    LAICO took over the running of the hotel through SOPROTEL SARL, a joint shareholding with the government of Rwanda. The Libyan government held 60 percent of shares while the Rwandan government held the remaining 40 percent.

    As the majority shareholder, LAICO took over the management of the Hotel with Mr. Hussein Omrani appointed as SOPROTEL’s Managing Director while Mr. S.Hameeuw, was appointed as the Managing Director of the LAICO management Company. The two people have since been relieved of their duties since the government effected the the UN resolution.

  • Non tariff- barriers still a challenge to business community

    The Ministry of Trade and Industry in conjunction with the Private Sector Federation has produced an assessment on the status of Non- Tariff Barriers (NTBs) in the region, which shows that removal of NTBs especially along the Northern and Central Corridors are taking slow progress.

    However, in the northern corridor, progress has been recorded at border posts, which are no longer highlighted as a major barrier by truck drivers. This has likely been the result of introducing One-Stop Border Posts and 24hour 7day operations which avoid duplication of clearance procedures as well as reducing congestion and overnight delays.

     The report suggests that focused attention must be made to other persistent NTBs and not focused solely at improving border procedures. Weighbridges, for instance, remain a cumbersome, time-consuming process that nearly always results in hefty bribes being paid. Corruption also remains a real concern for firms, who face a significant addition to transportation costs as a result. Other NTBs identified suggest that the harmonisation and revision of tonnage regulations in particular must be considered by Kenya and Uganda in the near future.

    Whilst notable progress has been made by the Mombasa port in introducing measures to improve and expedite clearance of cargo such as 24hour 7days operations and a One- Stop Centre for key procedures, consultations with the private sector indicate that Rwandan exporters are still not experiencing the large improvements purported by officials. It still takes two weeks for Rwandan cargo to clear, with local shipments often clearing much quicker.

     Traders along the Central Corridor face similar problems but suffer to a much lesser extent from extortionate corruption than the Northern Corridor, with total bribery payments estimated at around US$20. Yet, significant NTBs exist along the route and have, in some cases, worsened since Rwanda’s Private Sector Federation conducted its baseline study in 2008. Particularly of note is the increase in the number of weighbridges encountered in Tanzania from five in 2008 to the eight currently observed.

    This is seen as a contradiction in respect to an agreement by Partner States aimed to eliminate NTBs and refrain from introducing additional ones. The increased time added to journeys is a significant cost to importers and exporters. Customs checks and police roadblocks are also an unwarranted hindrance.

    The Border Post at Rusumo, for instance, lags behind than other Border Posts in the region and is particularly poorly equipped and closes as early as 6pm due to the reliance on solar power. Additional NTBs, such as, time sheets and transit licenses further complicate the journey, and the risk of highway robbery is such that many drivers refuse to continue driving at night due to risk of theft.

    Dar es Salaam port has made some improvements in introducing competition to container management. However, customs procedures remain lengthy and the modernisation and automating of operations needs to be increased to ensure cargo clearance is expedited. Capacity is still limited in dealing with the demand for cargo handling facilities.

    Concerning the Bujumbura route, there are very few Rwandan trucks that travel to Burundi. Clearance on the Rwanda-Burundi Kanyaru Border Post does not take long, and the Gasenyi Border operates a ‘One Stop Border Post’ and the result is relatively quick. Nevertheless, the infrastructure at the port is still minimal. The port is rarely congested, mainly as a result of low demand. The Port has a capacity of 500,000 tones but the port does not handle even half of that. While driving along the Kigali- Bujumbura road, there are no roadblocks ; customs check points or weighbridges identified.