KIGALI, April 16 (Reuters) – Rwanda will issue a debut $400 million debut Eurobond in the days ahead to raise funds for the retirement of short-term debt and complete strategic investments, the International Monetary Fund (IMF) said on Tuesday.
Investors have lapped up sovereign bonds by African countries in recent years, thanks to fairly attractive yields and robust economic growth prospects at a time European economies struggle to shake off a persistent debt crisis.
Rwanda will be the first country in east Africa to issue a Eurobond. Kenya planned to borrow from the international market but postponed it repeatedly due to worries over the prospects of violence in polls held last month.
Officials in Nairobi say the government will issue the $1 billion bond this year after the election passed peacefully in contrast with last election five years ago that resulted in deadly post-election violence.
Rwanda had initially indicated that it would borrow $350 million.
The country’s ministry of finance confirmed on Twitter that it had mandated BNP Paribas and Citi to arrange the issue, with road shows set to start on April 18.
Fitch Ratings assigned the issue ‘B(EXP)’ rating in line with the country’s ‘B’ Long-term foreign currency Issuer Default rating with a stable outlook.
“Rwanda’s rating is supported by solid economic policies and a track record of structural reforms, macroeconomic stability and low government debt,” the ratings agency said.
“Rwanda will continue to attract significant budget support flows, reflecting its strong track record in poverty reduction and control of corruption.”
The country had a debt to GDP ratio of 23.3 percent last year, Fitch said. The IMF said in a statement it expected the economy to expand 7.5 percent this year, barely changed from its previous forecast of 7.6 percent.
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.
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.
The growth of information communication technologies will increase employment and boost the country’s competitiveness and economic growth overtime,” Jean Philbert Nsengimana, the youth and ICT minister, has said.
Nsengimana added that this would also ensure provision of quality services and products. He was speaking at the launch of Techno Brain, an international software development company, at Umubano Hotel in Kacyiru, Kigali on Tuesday.
A modern IT laboratory, with fully-equipped ICT infrastructure, was also unveiled during the event.
Yvette Uwineza, the Techno Brain country manager, said the facility was one of the efforts by the firm to contribute to the country’s growing ICT sector.
The firm, which started operations in June last year, employs 20 Rwandans and is expected to recruit over 100 more in the coming months. It recently won a tender to train the Rwanda Development Board staff in ICT use.
Rwanda’s ICT landscape has evolved greatly in the last 10 years, especially after the laying of the fibre optic cable and the introduction the National Data Centre and e-governance services, as well as the rise in mobile telephony penetration.
The International Telecommunication Union 2012 report ranked Rwanda as one of the developing nations with vibrant ICT markets, along with Bahrain, Brazil, Ghana, Kenya, and Saudi Arabia.
“Rwanda, our beautiful and dear country / Adorned of hills, lakes and volcanoes / Motherland, would be always filled of happiness…”
The European Union (EU) has pledged to fund major energy projects in Rwanda during the period running between 2013 and 2015.
Micheal Arrion, the EU head of delegation, announced this yesterday while speaking at the ACP-EU Energy Facility Forum that is underway in Kigali.
The two-day seminar focuses on promoting good practices regarding the implementation of energy projects, based on the experience of the already ongoing projects within the sector.
“The funding of the energy sector in Rwanda, is something new for EU, as you know, the rate of access of energy in the country is quite low, we want to help the government to improve those rates,” said Arrion.
He could however not specify the amount his institution was going to inject into the venture, saying it will be determined after thorough talks with the government and other stakeholders.
“We have been very active in funding roads rehabilitation, rural development, in particular, crop intensification programme, post harvest mechanisms and the justice sector. Energy development in Rwanda hasn’t been our priority area of intervention,” he said.
Arrion stated that it is in response to the 2013 Economic Development and Poverty Reduction Strategy (EDPRS 11) of Rwanda and within the framework of the division of labour among donors.
“After discussions and negotiations with the government, we do expect to have a final programme for the next five years from 2013-2018, where we will certainly focus the large part of our interventions and financial envelopes on energy sector,” he explained.
The forum that was organised by Danish Management Energy group, saw the launch of the call for proposals that will allow grants for an additional 68 energy projects.
The EU envoy pointed out that his organisation will focus mainly on renewable energy and major projects like hydropower and other energy sources that will help Rwanda improve the energy mix.
The meeting which has drawn participants from the eastern, central and southern Africa is held under the theme “improving access of energy services for the poor in rural and peri-urban areas”.
At the event, the State Minister in Charge of Energy and Water, Emma Francoise Isumbingabo said Rwanda recognises that lack of reliable and affordable electricity as a critical issue impacting the economy and a major obstacle to the improvement of living conditions of the rural population.
“Our country’s target is to initiate energy sources to have access rate at 70 percent by the year 2017. In order to achieve this goal, the government is encouraging public-private development approach that will boost the expansion of generation capacity to energy mix comprising of hydro-power, methane gas, geothermal, peat among others, to have 1,000 megawatts on stream,” she explained.
Rwanda has been ranked fourth in Africa with high speed internet, after Ghana, Kenya and Angola in that order, according to Ookla NetIndex latest global internet speed report which was released on Monday.
The performance places Rwanda at 103rd position in the world with an average speed of 3.03 Megabits per second (Mbps).
Speaking to The New Times yesterday, Antoine Sebera, the Acting Chief Executive Officer Broadband Systems Corporation Ltd (BSC), said that the report was correct because the country offers high internet download speed.
“We have plans to increase the speed in the coming years. Soon we shall again increase the amount of capacity on our international links provided on the submarine cables. This will lead the users to access international websites and content at a much higher speed,” he said.
Lithuania ranks first in the world with 31.67 Mbps followed by South Korea 30.59 Mbps and Latvia in third position with 27.42 Mbps.
According to the report, the ranking is made by measurements on millions of test results from speedtest.net which is based on the rolling mean through put in Mbps over the past 30 days where the mean distance between the client and the server is less than 300 miles.
Speedtest.net is a free broadband connection analysis software.
Sebera mentioned that speedtest.net is a good tool and reference for measuring broadband speed.
Users can test their Internet speed against hundreds of geographically dispersed servers around the world.
Ookla NetIndex is the global leader in broadband testing and web-based network diagnostic applications.
The company’s software and methodologies set the broadband industry standards for accuracy, ease of use and the subsequent development of statistical data.
Despite the fact that it is not the only one, it gives a good indication of broadband speed because it is based on results dynamically collected on the Internet.
According to the report, Ghana’s average broadband speed is 5.36 Mbps and the country is 69th on the world ranking, Kenya 76th with 4.84 Mbps and Angola 81th with 4.53 Mbps.
Rwanda currently relies on three submarine fibre optic cable systems for Internet connection such as the East Africa Submarine Cable System (EASSY), The East African Marine Systems (TEAMS) and SEACOM through local telecommunication companies and ISPs.
The small African nation of Rwanda recently announced that it had cut poverty by 12% in six years, from 57% of its population to 45%. That equals roughly a million Rwandans emerging from poverty — one of the most stunning drops in the world.
It’s a remarkable achievement for Rwanda, which has emerged from civil war and a bloody ethnic genocide in the 1990s. How did it happen? The Times quizzed Paul Collier, director of the Center for the Study of African Economies at Oxford University, about the numbers.
Are there any doubts that the drop is real?
No doubts; I know the economics professor who did the data analysis, and he is highly experienced and painstaking, so it is genuine.
How did Rwanda cut its poverty so much?
There were one or two helpful events, notably the rise in world coffee prices, which pumped money into the rural economy, but, of course, overall the global economy since 2005 has not provided an easy environment for success. Hence, most of the achievement is likely due to domestic policies.
Rwanda is the nearest that Africa gets to an East Asian-style “developmental state,” where the government gets serious about trying to grow the economy and where the president runs a tight ship within government built on performance rather than patronage.
There were strong supporting policies for the rural poor — the “one cow” program [that distributed cows to poor households free of charge], which spread assets, and the improvements in health programs.
Alongside this, the economy was well managed, with inflation kept low, and the business environment improved, both of which helped the main city, Kigale, to grow. Growth in Kigale then spread benefits to rural areas — the most successful rural districts were those closest to Kigale.
When you say well managed, what do you mean? What choices did the government make that were signs of good management?
Basically, [President Paul] Kagame built a culture of performance at the top of the civil service. Ministers were well paid, but set targets. If they missed the targets there were consequences. Each year, the government holds a whole-of-government retreat where these performances are reviewed: good performance rewarded, and poor performers required to explain themselves.
An example is the strategy to improve Rwanda’s rating on the World Bank’s “Doing Business” annual rating, where over the course of six years the country moved from around 140th to 60th in the world rankings. Each component of the ratings was assigned each year to an appropriate minister. So over time, a cadre of government officials has been built up who believe in their ability not just to strategize but to get things done.
What changes can you see now in Rwanda?
Some changes are obvious to the eye — houses that now have tin roofs instead of thatch. Thatch may look prettier, but the world over, a decent roof is one of the first changes people make when they start the ascent out of poverty. Some of the changes are psychological — a sense that things really can improve, and a sense that individual families can do something about their circumstances.
What can other countries learn from Rwanda — or is its story so unique that it can’t be copied?
They can learn a lot. If Rwanda can do this well, with all its disadvantages — landlocked, legacy of conflict, no natural resources — other African countries should be able to do even better.
Do you think Rwanda can continue to reduce poverty at the same rate in the coming years?
The government has now set its sights on getting the country to middle-income levels. This will require a change in the growth strategy. So far, growth has come primarily from doing better the things that Rwanda is doing already. To reach middle income, new activities will need to be introduced and the economy diversified. Rwanda needs pioneer investors and aid to support them with public infrastructure; I hope that it gets them. If it does, then, yes, poverty can continue to fall fast.