Kenya, Uganda and Rwanda are considering building a superhighway from Mombasa to Kigali, parallel to the planned railway.
According to regional trade lobby organization Trademark East Africa, which will be facilitating the project, it is expected to have a six-lane road, with construction beginning in 2016.
Inspired by the N1 highway that runs from Cape Town in South Africa to Harare in Zimbabwe, the proposed road is intended to ease the movement of cargo, thereby reducing the cost of doing business and increasing intra-regional trade.
Expenditure on transport in the EAC countries accounts for 45% of the total cost of goods. This is 30% higher than in Southern Africa, making commodities produced in the region uncompetitive.
John Byabagambi, Uganda’s Junior Minister for Works who is chairing the Standard Gauge Railway Committee, said that Trademark was doing feasibility studies for a dual carriage highway that forms part of plans to expand the Northern Corridor, as the current single carriage system is too narrow and fraught with inefficiencies.
Allen Asiimwe of Trademark East Africa said the superhighway would have no weighbridges or roadblocks.
This means that once the goods are loaded onto a truck at the Port of Mombasa, there will be no stops until the final destination. Weighbridges and roadblocks are among major hindrances to trade in the region.
As the cost of doing business in the region drops, intra-EAC trade, which currently stands at over $3.8 million, or just 13% of the total trade volumes in the region, is expected to increase.
Asiimwe added that the road, the ability of the revenue authorities of Rwanda, Uganda and Kenya to acquire the latest software known as Automated Systems for Customs Data (Asycuda), plus a $50 million investment in the port of Mombasa, will ensure that cargo moves fast and that it is constantly monitored.
“Investment in a regional asset like the Mombasa port will reduce the time for clearing goods from 18 to five days,” she said.
The software enables Customs officials from the three countries to use the electronic tracking system to monitor the trucks.
The software will also boost the EAC Customs Union since revenue authorities will be able to assess and collect taxes at the first point of entry. This means that once a trader has paid his taxes for goods bound for Uganda, there will be no need to pay a refundable bond to Kenya. This has been the practice, due to the fear that goods could be dumped in Kenya.
As the cost of doing business in the region drops, intra-EAC trade, which currently stands at over $3.8 million, or just 13% of the total trade volumes in the region, is expected to increase.
Experts warn that intra-EAC trade is well below the standards of any functional common market.
“Intra-regional trade should account for at least 25% of the total trade volumes in any functional common market,” said Rashid Kibowa, Commissioner for Economic Affairs in Uganda’s Ministry of East African Community Affairs.
In the European Union, intra-regional trade accounts for 55% of total trade while it stands at 40% in the US.
Rwanda will soon be among the few African countries to link every corner of the country when it rolls out the first ever 4G LTE broadband network in the region.
LTE (Long Term Evolution) is a wireless broadband technology designed to support roaming Internet access via cellphones and handheld devices.
The $140 million project, to be rolled out over the next three years by the government in partnership with KT Corporation, South Korea’s biggest telecommunications provider, will see the whole country linked to a fiber optic cable.
Its launch coincides with Transform Africa, a continental ICT and innovation summit that takes place in Kigali from October 28 to 31.
Seven African presidents and more than 1,500 delegates from all over the world are expected at the summit to discuss how Africa can overcome its connectivity and ICT challenges.
The presidents who are expected to attend include Rwanda’s Paul Kagame, Uhuru Kenyatta of Kenya and Yoweri Museveni of Uganda — who will also be in Kigali for their countries’ Infrastructure Summit on October 28.
According to Rwanda’s Minister for ICT Jean Philbert Nsengimana, the country is today ranked among the “most connected” countries in Africa.
The 4G LTE network will be the final phase to deliver the “last mile” of connectivity after putting in place all the other infrastructures needed, including linking the whole country to the fiber optic backbone. The project will connect 95 per cent of Rwandans.
“Six years ago, African leaders met in Kigali for the connect Africa summit to find means of addressing the digital divide the continent was facing. At the time, only five per cent of the population had mobiles but today 65 per cent of Rwandans own mobile phones,” Mr Nsengimana said.
Connecting all citizens
“Today, when we meet in Kigali for Transform Africa, the question will not be how Africa will be connected but rather how this infrastructure can reach the final person,” he added.
Africa’s biggest challenge remains linking population to available ICT infrastructures as well as the high cost of making phone calls.
Rwanda and other EAC member states are among the countries where making a single phone call is more expensive than in any other part of the world.
The issue of affordability of telecoms and data will be one of the key issues to discussed at the Kigali summit this week.
Rwanda’s debut US$400Million Eurobond has been over subscribed, a lead banker has revealed saying, “its well over subscribed as you can imagine”.
An investor source told media that the order book was $3 billion, or 7.5 times the issue size.
The 10-year dollar bond was issued on Thursday with a 6.875% yield, a lead banker said. That was at the tighter end of Rwanda’s final guidance of 6.875-7 %.
Investors were attracted by Rwanda’s strongly growing economy, low debt and recent political stability.
President Paul Kagame has been commended for presiding over Rwanda’s recovery after the 1994 genocide against the tutsi that claimed over a million lives.
Economic growth averaged 8.2% from 2006 to 2012 and the International Monetary Fund projects growth of 7.6% this year.
Rwanda’s debt levels are equivalent to 23.3 % of gross domestic product in 2012 and Inflation is in single digits.
The United States has praised the government of Rwanda for its tremendous strides in improving the lives of Rwandans by increasing the rate of life expectancy for its citizens and reducing the maternal mortality.
Speaking at the Africa Health Forum in Washington DC on Friday, the US Deputy Secretary of State William J. Burns said that the country is on track to meet many of the Millenium Development goals despite challenges the country faced after the 1994 Genocide against Tutsi.
In his key note address, the Deputy Secretary of state said that: “Rwanda, a country devastated by genocide less than two decades ago, is today on track to meet many of the Millennium Development Goals – life expectancy has doubled, maternal mortality and annual child deaths more than halved, and deaths from HIV, TB, and malaria have dropped by 80percent.”
The US diplomat went on to thank the current African leadership for the dramatic transformation of the continent.
“We gather here today amidst a dramatic transformation of the African continent from a region once defined largely by its problems, to a region defined increasingly by its possibilities… from a region afflicted by conflict, crisis, and impoverishment to a region known more and more for its economic growth, expanding democratic governance, and enhanced health and human development,” said William J. Burns.
He emphasized that as the continent evolves, and as governments take on greater leadership and responsibility for their own future, the nature of assistance and cooperation from the international community should evolve as well – from a donor-recipient relationship to more of a partnership.
“This partnership – based on principles of country ownership, shared responsibility, and mutual respect – allows donors and partner countries to better meet the needs of the country’s population. Where transparency, good governance, and accountability are enshrined in law and in practice – our joint investments will yield more effective, more efficient, and ultimately more sustainable outcomes.
This is why sustainability and shared responsibility are two foundational principles of President Obama’s Policy Directive on Global Development and our global health diplomacy strategy.”
The US Deputy secretary of State told delegates that United States commitment to global health is strong, citing President Obama’s budget request for a $1.65 billion contribution to the Global Fund in fiscal year 2014 as US’s historically high level of support.
The Forum was attended by Ministers and representatives of Ministries of Finance and Health over two dozen African countries.
Rwanda is globally hailed for presenting a unique case in development and in the progress towards attaining the MDGs.
Rwanda’s debut in the Eurobond market will offer investors the rare opportunity to buy into one of the fastest growing economies in Sub-Saharan Africa – but don’t expect the country to get carried away.
The sub-benchmark size of the trade, combined with the country’s strong dependence on foreign aid and volatile sectors of the economy, will see some buyers take a step back and demand a reasonable premium to get involved.
The East African sovereign, rated B/B, will wrap up investor meetings for its planned US$400m 10-year bond sale next Wednesday, after conducting a one-week roadshow in Asia, Europe and the US through BNP Paribas and Citigroup.
The last Eurobond issue from the continent, Zambia’s 5.375% US$750m 10-year note offering, generated an order book of US$12bn when it was issued in September, pricing through the curves of the country’s regional peers.
While Rwanda is unlikely to replicate that success, a shortage of African paper in the market will generate strong interest among yield-starved investors.
Despite a US$50m increase from the originally targeted US$350m, Rwanda’s transaction will fall short of the US$500m minimum required for inclusion in global emerging market indices, reducing the notes’ potential buyer base and limiting their liquidity in the secondary market.
“The sub-benchmark size is a problem because it means there is no automatic demand from index followers,” said Graham Stock, chief strategist at Insparo Asset Management. “It is a market distortion created by the importance of the index, but it can’t be ignored.”
Borrowing more for the sole purpose of joining the index league, however, would make little sense for a country with annual GDP of US$6.4bn. “It would be risky for the government of a small economy to borrow more than it needs and thereby increase debt service costs and refinancing risks just to qualify for the benchmark,” said Stock.
While Rwanda’s growth story is compelling – real GDP growth averaged 7.4% between 2003 and 2011 – the country relies on foreign aid to finance almost 40% of its budget. Subsistence agriculture accounts for one-third of annual GDP, employing 73% of the labour force.
Eyeing a 7% yield
In light of these challenges, a syndicate official away from the deal reckons investors are likely to demand a yield of around 7% to buy the new notes. “I see a definite floor of 6%, on top of which you need to add a new issue premium and [an additional concession for] non-index eligibility,” said the banker.
“I think the premium for the size will be significant. A pricing [of] circa 7% is not far-fetched,” said a London-based portfolio manager who specialises in African markets.
He suggested, however, that the rarity value of the name could push the yield even lower. “I would go tighter, between 6.5% and 6.75%, mainly because of the appetite for Eurobonds from the region and current yield levels for SSA names,” he added.
Proceeds from the sale will be used to repay outstanding loans and finance the completion of the Kigali Convention Centre and the Nyabarongo hydro power plant.
The African Development Bank Group (AfDB) Board yesterday approved $39.44 million to help in developing the Skills, Employability and Entrepreneurship Programme (SEEP) in Rwanda.
The initiative created to support specific sectors in the country’s budget of 2012/13 was mapped out in partnership with Rwanda and her development partners, according to AfDB.
The continental bank was among development partners that had frozen or cut aid to Rwanda over allegations that the latter was supporting a rebel group in DRC – which Kigali vehemently denied. Most of these donors have since released their financial support.
The SEEP aims to boost Rwanda’s policy reforms for inclusive growth and poverty eradication programmes.
Negatu Makonnen, the AfDB Rwanda resident representative, said “the SEEP beneficiaries will include youth, women and small and medium enterprises (SMEs).
Reducing critical gaps skills:
“The bank’s plan is to directly contribute to inclusive growth and reduction of the Balance of Payments and fiscal deficits that will lead to a reduction in Rwanda’s high dependence on foreign aid over the medium term,” he noted.
Makonnen observed that young people and women comprise 40 per cent and 52 per cent of the population respectively while SMEs account for over 90 per cent of private sector establishments and employ the majority of the population.
According to SEEP, the programme targets to reduce critical skills gaps and improve the relevance of education in relation to the labour market.
Recently AfDB gave Development Bank of Rwanda with US$8 million Line of Credit (LoC) to support BRD lending to the agriculture, agro-processing, telecommunication, education and tourism infrastructure sectors in Rwanda.
Kigali — Today, Microsoft launched its 4Afrika initiative in Rwanda. The continental initiative was set up by Microsoft to actively engage in Africa’s economic development to improve its global competitiveness.
According to Microsoft, the goal of the 4Afrika initiative in Rwanda is to disseminate affordable smart devices built specifically for Africa which will encourage application development by Africans for Africans.
The initiative will also run an education platform aimed to develop technical and entrepreneurship skills as a means to improve employability especially for young people.
According to Patrick Nyirishema, Head of ICT Department in Rwanda Development Board, the Government of Rwanda has identified two lead programs for possible collaboration with Microsoft within the 4Afrika initiative.
There is Viziyo program which is designed to increase citizen-access to smart phones and the Smart Village program built on the concept of replicating digitised model villages across the nation as a means to achieve Rwanda’s goal to become an ICT driven economy.
Speaking at the launch of this initiative, the Minister of Youth and ICT, Jean Philbert Nsengimana indicated that tremendous opportunities abound in Rwanda’s ICT industry.
“Technology is now becoming a driving force behind numerous aspects of national development and we cannot afford to be left behind. I believe a lot can be achieved through collaboration, consultation, and smart private-public partnership.
We welcome Microsoft’s 4Afrika initiative and we know that they are committed to developing innovative ways using the power of technology to help transform social and economic progress in Rwanda,” he concluded.
Several HIV/AIDS awareness campaigns by the government and other stakeholders have recorded significant improvement in the reduction of new HIV infections in the country.
Dr Sabin Nsanzimana, the Coordinator of HIV and Sexually Transmitted Infections (STIs) Care and Treatment Department at Rwanda Biomedical Centre, who disclosed this at a meeting in Kigali on Wednesday, said the campaigns have been effective that the rate of new infections has gone down compared to the previous years meaning that more Rwandans are aware of the dangers of HIV/Aids.
“The rate of new infections was at 25,000 people every year in Rwanda five years ago, but now it has gone down. We have laid a number of strategies to increase awareness and other protective measures against new HIV infections so we are positive that this rate will go down further,” Dr Nsanzimana said. Every hour, two people get infected with HIV in Rwanda, according to Dr Nsanzimana. This is equivalent to 15,000 new HIV Infections every year, according to the doctor, who called upon those already infected to adhere to the instructions of their anti-retroviral treatment.
Functional HIV cure:
An infant was reportedly cured of HIV as announced recently at the Conference on Retroviruses and Opportunistic Infections in Atlanta, while French researchers published in the journal PLOS Pathogens that they had been studying 14 people that have been “functionally cured” of HIV.
But Professor Andrew Zolopa, from Stanford University School of Medicine, said those people who got cured had started on their ARVs at least a month after infection and so they started treatment early enough.
Rwandan President Paul Kagame said Thursday his country will aim for average annual economic growth of 11.5 percent for the next five years.
“We have set ourselves a target of promoting this country’s economic development. We want economic growth to average 11.5 percent” for the period 2013-2017, Kagame told a government retreat.
“It’s a feasible target,” he went on, saying that the fact that Rwanda managed 8 percent growth in 2012 despite suspensions of foreign budget support was “a miracle”.
The 8 percent growth figure is according to the government. The International Monetary Fund put Rwanda’s 2012 growth at 7.7%.
In 2012 several donor countries suspended their budget support to Rwanda following accusations from the United Nations that Kigali was backing rebels in eastern Democratic Republic of Congo.
Rwanda has always denied the claims.
Nearly two decades after the 1994 genocide, 40% of Rwanda’s budget still comes from aid.
In February Germany unfroze some 7 million euros of aid and reallocated it for professional training.
When Agnes Binagwaho began her career as a doctor in the slums of Kigali, Rwanda, in 1996, she worked in one of the most precarious health environments in the world.
“We could do nothing for them,” she remembers. “We didn’t have drugs even for ordinary diseases.”
19 years later, however, Rwanda is on pace to become the only country in sub-Saharan Africa to meet all of its health-related Millennium Development Goals, and the tiny pocket of Central Africa has posted some of the world’s most staggering health gains in the past decade, outpacing nations that spend far more per capita on healthcare.
And Dr. Binagwaho, who once stuffed her suitcases full of basic medicinal supplies to take home to Kigali whenever she traveled abroad, is now leading that charge as minister of health.
In an article published earlier this year in the British Medical Journal (BMI), a team of doctors and researchers working in Rwanda laid out the country’s swift rise.
Between 1994 and 2012, they wrote, the country’s life expectancy climbed from 28 years to 56 and the percentage of the population living in poverty dropped from 77.8 percent to 44.9 percent.
In the past decade, deaths from HIV have fallen 78 percent – the single largest decline in the world during that time frame – while tuberculosis mortality has dropped 77 percent, the most significant decrease in Africa.
Of course, the starting point in Rwanda’s climb was a harrowing one: In 1994, between 500,000 and 1 million people — up to 20 percent of its total population — were killed in an ethnic genocide, and some 2 million more fled. Many doctors were among the dead and exiled, and the country, including its healthcare system, was left in tatters.
That year, less than a quarter of Rwandan children received immunizations and more than 1 in 4 children were dead by their fifth birthday.
But in the years that followed, Rwanda became the darling of the international development community, a case study for how a country could use a trans-formative post-conflict period to effectively rebuild its core institutions.
As aid poured in, Rwanda’s new government channeled it into a wide variety of social programs, including healthcare. It rolled out a system of universal health insurance, doled out vaccinations and mosquito nets, and put nearly every AIDS patient on antiretrovirals.
And it did all of this in a place that still faces what the BMI article called “one of the greatest shortages of human resources for health in the world.”
Indeed, the country of 11 million has only 625 doctors in its public hospitals nationwide. But there are also now more than 45,000 “community health workers,” trained to treat basic health issues and help ensure adherence to drug regimens in rural areas far from hospitals and clinics.
As a result of these efforts, the probability that a child will die before the age of five has fallen by 70 percent and is now half the regional average. Some 108,000 people now receive antiretroviral treatment for AIDS – a figure approaching universal access.
But as the healthcare system has lurched forward, it has also come under attack for its heavy reliance on foreign aid: Nearly half of the government’s health budget comes from external funders.
Unlike many other countries, however, Rwanda has used these cash infusions to build institutions, not merely fund programs, says Peter Drobac, the Rwanda director for Partners in Health, a public health nonprofit, and one of the authors of the BMI paper.
Indeed, Rwanda spends no more on health than many of its neighbors, ranking 22nd among 49 sub-Saharan African countries in per capita health spending. That comes to about $55.50 per person each year, which Drobac says is a “tremendous value for money.”
But Rwanda’s government has ambitiously called for the country to be aid-free by 2020, an undertaking that would require a massive pivot away from its current healthcare funding model. In reality, that goal may be decades off, but in the meantime, officials have built the scaffolding for a sturdy healthcare system, Drobac says.
“The lesson we have learned is that you cannot solve every [health] problem at once,” Binagwaho says. “So you do the best with what you have, and you don’t leave anyone out.”