Tag Archives: Rwanda economy

Czech Republic Investors Eye Rwanda

A group of investors from the Czech Republic are set to invest in a range of businesses in the country.

The 30-member delegation led by Jan Kohout, the Czech Minister of Foreign Affairs, was in the country last week as they explored potential areas of investment in the country.

During their visit, the group visited Rwanda Development Board (RDB) where they were assured of an enabling business environment in Rwanda.

The group, which also had a business meeting last Tuesday with several government officials and the Rwanda business community, is interested in investing in the a variety of areas, including: agriculture, services, manufacturing, energy, import and export promotion, and aviation.

“We have chosen Rwanda, South Sudan, Uganda and Ghana as our economic missions in Africa and I am optimistic that our business community will find various investment opportunities in these countries,” said Kohout in the meeting.

He added that the objective of coming to explore potential areas of investment in the country is due to the fact that Rwanda offers potential business opportunities since the country has continued to perform well in World Bank ‘Doing Business’ reports.

Borivoj Minar, a member of the Czech Chamber of Commerce, said that although it was their first time in Rwanda, they have developed a strong feeling of establishing businesses in Rwanda after holding meetings with government officials about various business opportunities.

“We are looking forward to partner with Rwanda towards promoting trade, innovation and entrepreneurship between the two countries,” Minar said.

RDB Chief Operations Officer (COO), Claire Akamanzi, said that Czech investors are looking to African markets where growth is high, and Rwanda was chosen as one of their destinations.

“Many countries are choosing our country as a potential area of investment and this shows that Rwanda is one of the fastest growing economies on the continent. We are happy about that and ready to offer them a conducive environment that will enable them to efficiently and effectively do their respective businesses in Rwanda,” Akamanzi said.

She said that RDB will continue working together with the Czech chamber of commerce in order allow many investors from the Czech Republic to come and invest in Rwanda.

“Although we haven’t done much with Czech Republic in terms of investments, the coming of such investors shows the beginning of their business journey with Rwanda,” Akamanzi said.

The group also toured Kigali Special Economic Zone (KSEZ) which the government put aside as place for industrial zone for the national and foreign investors.

Statistics indicate that RDB registered investments worth $1.2 billion (about Frw 800 billion) between January and June this year.

The investments represent 58 domestic projects, worth $ 509.1 million, 22 foreign projects, worth $406.9m, and nine joint ventures worth $338.1 million.

While talking to the visiting delegation, the Minister of Trade and Industry, Francois Kanimba said: “Our economy has responded considerably well to business reforms, we have grown at an average rate of about 8 per cent over the last decade and we welcome you to Rwanda to explore areas of your business interests,”

According to 2013 Baseline Profitability Index by the Foreign Policy Magazine, Rwanda was ranked fifth-best destination for investment in the world out of 102 countries surveyed. The global study indicated that high returns of investment are accessible and to a great degree, retrievable to investors in Rwanda.

The 2013World Bank Doing Business Report also ranked Rwanda the third easiest place to do business in Sub-Saharan Africa, after Mauritius and South Africa.

Rwanda readies debut Eurobond

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.

S. Korea to Construct ICT Innovation Centre in Kigali

The Korean International Cooperation Agency (KOICA) has signed an agreement with the Ministry of Youth and ICT aimed at enhancing Information and Communication Technology.

Under the agreement, KOICA will construct an ICT innovation centre in Kicukiro , Kigali. The centre will be a major step in the Information Technology front in the entire East African Region, according to officials.

The agreement was signed on Wednesday by Rosemary Mbabazi, the Permanent Secretary in the Ministry of Youth and ICT, and Sang Chul Kim, the resident representative of KOICA.

The centre, which will be constructed late next year over a period of 24 months and will cost $5.6 million, will be under Rwanda Development Board’s IT department.

Speaking at the ceremony Kim said, “This agreement is another significant step for the friendship between Rwanda and South Korea. This is the 50th year of our friendship. So we had to move it a step further by starting this important journey as well as helping Rwanda move further towards its Vision 2020.”

KOICA affirmed to continue its support of the ICT development in the country with a plan to put up other IT centres around the country to help rural youth access information.

“This signed document represents another milestone for ICT in our country,” Mbabazi said.

Upon completion, the centre which is targeting 78 per cent per cent youth will be a major leap for the ICT industry.

“It will also help in job creation and give more exposure for the youth in the country. Not only will it be good for the urban youth which is our main target but also for the rural youth,” Mbabazi asserted.

The ceremony was a culmination of a six months survey by a Basic Design Survey Team (BDST) that consisted of members from KOICA and officials from RDB who took a Kigali-wide research to determine the essential tools and strategies which were necessary for the commencement of construction of the centre.

Microsoft 4afrika Initiative Launches Its Activities 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.

Rwanda aims for average growth of 11.5% through 2017

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.

Rwanda Businesses Target Burundi, Uganda Markets

Kigali — Rwandas midsize companies are looking at Burundi and Uganda as potential investment destinations in the region. According to the Top 100 Mid Sized Companies survey, over 69% out 205 companies surveyed indicated that Burundi would be their potential target for investment in the region while 48 percent saw Uganda.

“It is very interesting to see Rwandan companies beginning to pick interest in investing in the region,” Robert Onyango Senior Manager, Mid Markets at KPMG said during the launch of the survey in Kigali.

The Rwanda Top  100 midsize  companies  Survey  is an initiative of KPMG  to identify and recognize Rwanda’s  fastest  growing  medium sized companies  in order  to showcase  business  excellence and highlight  the country’s  most successful entrepreneurial stories.

Conducted last year for a period of three months, the survey targeted around 205 midsize companies with a turnover of between Rwf 50 million up to Rwf 5 billion in different sectors with 175 submitting financial ratios in order to qualify for the ranking.

“By giving recognition  to these  companies, we are investing in the multinationals of tomorrow  and meeting one of the national goals of Rwanda which is to move  from poverty reduction to wealth  creation,” John Ndunyu, Director KPMG Rwanda said.

The survey reported that the past 6 months credit extended to businesses has increased  with most businesses accessing bank overdrafts, credit lines or credit card overdrafts and bank loans which indicated 41 percent and 40 percent respectively.

Rwanda’s Economic Miracle

December 13, 2012

Rwanda has been getting a lot of attention lately, but not the good kind. With the possible appointment of Susan Rice to replace Hilary Clinton as US Secretary of State, many media outlets are digging up one of the more embarrassing moments in recent history, as the Western world stood idle while a genocide unfolded in this small Central African nation. In addition, the recent siege of Goma by the M23 rebels has attracted a certain level of suspicion over Rwanda’s motives in the region, while others have defended its stance on the conflict.

But leaving these two angles aside for the moment, all this coverage has ignored a more interesting story: that the Rwandan government has actually implemented ideas that work, resulting in a small economic miracle.  Should other African governments pay attention?

Having moved beyond the horror of the 1994 genocide, even if the West has not, this nation of 10-million is experiencing fast growth based on tourism and services despite a near total absence of mineral wealth. Averaging above 8% GDP growth for the past five years, more than one million Rwandans have been lifted out of poverty, according to the Rwanda Household Living Conditions Survey.

Unlike some other African nations who have struggled despite enormous mining exports and oil production, Rwanda’s business and service sectors account for two-thirds of GDP, having replaced agriculture. Tourism is a key part of the service sector, and multinationals are beginning to pay attention. Recently it was announced that Hotel giant firm Marriott is building one of its first three hotels in sub-Saharan Africa, with a 5-star, 250-room hotel in Kigali.

Marriott is eager to cash in on the promise of booming services, transportation, and logistics industries in the country, where thanks to strong education programs put in place by the government, foreign investors enjoy a particularly vibrant talent pool of recent graduates and experienced workers.

Rwanda has had more success than others in translating its economic growth toward solving social issues. The country has recorded a significant boost in the health sector where infant mortality dropped from 86 per 1000 live births in 2005 to 50 per 1000 live births in 2011. The strides made in the health sector have also spread to the use of contraceptives in a country with a very high population density, providing an improved public safety net against the threat of infectious diseases.

Infrastructure has been improving quickly. Households on the electricity grid have jumped from 91,000 in 2006 to 215,000 in 2011, according to government statistics.

Access to education improved sharply with primary school completion rates for 2011 reaching 79 percent for boys and 82 percent for girls, much higher than the overall targets of 59 percent and 58 percent respectively, while participation in secondary level education doubled from 2006 to 2011.

Instead of absorbing more and more donor aid without any visible improvement, Rwanda is actually taking less and less.
In 1995, donor accounted for 100% of the state budget, while today it is less than 40%.

The country is also trying to make some inroad in the technology sector, as Carnegie Mellon University has already opened a computer science training institute in Kigali, where ambitious young Rwandese gather to push forward an African innovation hub. The idea is that the university will be able to attract the brightest and most promising students and help build and support the nation’s IT sector to study in their own countries.

Rwanda is described by many experts as the most well connected country in Africa, boasting the fastest internet speeds on the continent. Thanks to this advantage, the government landed a crucial foreign investor with Visa, which launched a partnership with the state to develop a cashless economy.

Undoubtedly, many challenges remain for the political development of the country. The opposition complains of unfair treatment, while the authorities are often accused of meddling in the neighboring conflicts in the Congo, where untold wealths of diamond, gold, copper, and cobalt deposits are attracting many potential suitors from across the region and beyond, who are all positioning to be part of the opportunity.

But judging strictly by the social and economic progress achieved in the past decade, something is going right in Kigali, and that’s no small feat.

The Beauty of Nyungwe National Park

With over 280 bird and 13 primate species and spreading over 1000 square kilometres, Nyungwe National Park is one of the most acclaimed biodiversity rainforests in Africa.

The park also boasts a diverse ecosystem from rainforest, bamboo, grassland, swamps, rivers, butterflies, moths and insects.

Last week, I travelled to Nyungwe with a group of about 30 local journalists and, together, we embarked on a thrilling adventure, walking down the hills and crossing valleys trekking for monkeys and chimpanzees and visiting other wildlife attractions.

A variety of hiking and walking trails crisscross the Park, leading to its varied attractions.

“Nyungwe is a hotspot for biodiversity,” Louis Rugerinyange, the Chief Park Warden at Nyungwe who led our party along the forest’s trails, says.

On day one, we undertook a long tracking adventure as we looked for the white and black colobus monkeys-one of the many primate species in Nyungwe Park.

Walking on a sloppy ground for about one hour was realistically a very difficult exercise to some of us, who fell down several times, as one of our guides led us through the jungle.

A monkey tracker, only identified as Simon, told me he has now spent over 15 years in the forest following monkeys and other primates.

After a tedious journey, of over one hour, we started hearing voices from deep within the forest, as trees were shaking.

Finally, we have arrived, Simon ushers to the excitement of many within our group.

Simon says there are about 600 white and black colobus monkeys in Nyungwe park, which he says live together in groups.

“They usually move together from one place to another,” Simon explains.

“We have to follow their movement on a daily basis to know the exact place where they are”.

The tracker, 60, says his job ends late in the evening and starts early in the morning-at about 5am-so as to make sure he does not lose track of the monkeys.

“Every morning, they make loud noises, making it easy for me to track them,” Simon says.

“As they move from one place to another, I follow them,” Simon told me as we observed the acrobatic antics of the primates jumping from one tree to another, from one place to another.

These colobus monkeys are one of the many species of primates found in Nyungwe.

Watching their gymnastic and flexible movements within the jungle, one feels relaxed from the pain of the long walk to reach this place.

According to Rugerinyange, visitors always have a chance to witness their movement thanks to knowledgeable and devoted trackers.

Canopy walkway

But Nyungwe’s magnet does not end on chimpanzees and monkeys as the Park offers a wide variety of other attractions.

One of them, the Kamiranzovu waterfalls is located deep in the forest, in the middle of two elevated hills and is reached after approximately one and half hours foot walk. And the park’s various trails give an opportunity to explore the different spectacular aspects of the jungle, observing birds, mammals, trees, orchids and other wildlife plant species, among other exciting attractions.

The forest walks are excellent and last from one to eight hours and a one to three days overnight hike, according to officials.

Notwithstanding the various attractions in the park, the Canopy Walkway remains one of the best places to experience as it offers a magnificent view of the canopy and it gives a great site for bird-watching.

The walkway is constructed on the Igishigishigi trail and is reached after about a one hour stride from the Uwinka visitor centre.

The Canopy walk is suspended at a height of about 60m above the ground and goes over giant trees.

Ildephonse Kambogo, the director of Tourism in Nyungwe Park, says the 150 meters walkway is the first in East Africa and the third in Africa.

“While on the walkway, tourists have a good view of the park,” Kambogo summarises.

The silver Canopy Walkway is narrow and shaky as a result of its altitude and as tourists move on it, one hears things cracking.

Its shaky nature makes many tourists fear for their safety, though officials here affirm it is very safe.

The canopy can carry a total of four tonnes at a time, according to Rugerinyange.

“It is safe, no one can fall,” assures Juarez, a Brazilian who is part of the team who set up the pathway.

But as we kept our walk on the above-the-ground way, many did not believe the assurances given and thought they would collapse.

In the middle of the walk one lady in our group stopped and asked to return back. She was so terrified that the guide found it difficult to make her overcome her fears and continue her journey till the end.

At some point, the tour guides stopped the group to listen to the forest but on the faces of some, prayers were flowing-they were seemingly thinking only of getting to the end as fast as possible.

“I won’t come back,” one woman told me as we reached the end of our walk.

But the majority enjoyed the experience and the view of the park while crossing the path. For them, as it was for me, the walk was a scary but thrilling and worthy exercise.

A Canadian tourist I met at the canopy walkway, who identified himself as Normand, told me he was “so excited” and “did enjoy” the walk.

“We are alive and so happy,” Normand, who was accompanied by his wife, told me as they ended the walk.

“Rwanda is really, really nice,” he added.

While the beauty of Nyungwe National Park remains unknown to many, efforts are being made to attract many tourists.

For Dr James Seyler, the Chief of Party of Nyungwe Nziza Project, which seeks to strengthen ecotourism in Nyungwe Park, there is a reason to visit the Park.

“The place (Nyungwe) is beautiful and there are a lot of things to see and a lot of things to do,” he says.

What you need is just to be in Nyungwe and witness the beauty of Rwanda, he concludes.

Agaciro Launched in Diaspora

Over Rwf130 million was raised during separate fund raising drives for the Agaciro Development Fund (AgDF) in Belgium and Uganda, at the weekend.

The Rwandan Diaspora in Belgium raised Rwf110m at a function held at the Rwandan embassy in Brussels.

Meanwhile, the Rwandan community in Uganda and friends of Rwanda raised 100 million Ugandan shillings (about Rwf24.4m) in cash and pledges at the launching ceremony that took place at the Kampala International University (KIU).

Participants in Belgium promised to organise similar functions in various towns in the country.

And the Ugandan ceremony also paved way for a planned grand AgDF event scheduled for November this year in Kampala expected to draw thousands of members of the Banyarwanda community, friends and well wishers.

Rwanda’s High Commissioner to Uganda Frank Mugambage said the AgDF is just one of the many other home grown solutions that Rwandans have chosen as a way of preserving their dignity and promoting development.

“It should be stressed that Rwandans have gained strength and determination from the achievements and progress made out of their collective efforts,” he said.

Mugambage observed that the momentum generated for the Fund since its launch is further proof and a vote of confidence that Rwandans have in their leadership and vision.

The event was marked by Rwandan cultural performances with several speakers promising to mobilise others to be part of the initiative.

“I call on the young generation to take the initiative forward. We should promote our culture of being self dependent in whatever we do,” said Urayeneza Bagakunde, an elder of the Banyarwanda community in Uganda.

Mark Karemera, a resident of Mukono district, said he didn’t have the money to contribute right away, but that he would tell others about the idea and make his contribution in the future.

Olive Kigongo, the Chairperson of the Uganda National Chamber of Commerce and Industry (UNCCI), commended the idea of the fund, saying it is a sure way of reducing dependency on foreign aid.

Donat Kananura, the Chairman of the Banyarwanda community in Uganda, noted that dignity is derived from self respect and called on all Rwandans to be proud of their culture.

For the KIU Vice Chancellor, Mohammed Ndaula, the AgDF is a timely initiative because the African continent only gained political independence and still lacks economic independence.

Rwanda economy grows 9.4 pct in 2011/12 fiscal

(Reuters) – Rwanda’s economy expanded by 9.4 percent in its fiscal year ended June from 7.4 percent previously, thanks to robust growth across all sectors, its statistics office said on Thursday.

Like other countries in the sub Saharan region, the landlocked central African nation has recorded robust economic growth rates in recent years, on the back of increased investments and consumption.

The farming sector grew by 6 percent during the period thanks to increased food production, which rose by 7 percent, the National Institute of Statistics said.

Industry expanded by 12 percent on the back of a jump in mineral exports, manufacturing and construction.

Electricity, gas and water also increased by 19 percent.

The government said the services sector expanded by 12 percent, buoyed by wholesale and retail trade, as well as finance and insurance.

Rwanda was the only country in east Africa that did not suffer last year from soaring inflation and steep currency weakening, faring better than its larger neighbour Uganda. (Reporting by Jenny Clover; Writing by Duncan Miriri; Editing by James Macharia)