Tag Archives: Rwanda poverty alleviation

Rwanda to issue $400 million debut Eurobond : IMF

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.

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Rwanda Gets U.S $50 Million for Poverty Fight

Kigali — The World bank has approved a grant of $50m aimed at bolstering Rwanda’s poverty eradication efforts.

It fund will also see Rwandans cushioned from the full impact of shocks, from unemployment or illness to sudden natural disasters.Carolyn Turk, World Bank Country Manager for Rwanda said that while Rwanda has pushed back poverty dramatically in the past decade, it is still one of the world’s poorest countries.

“We are happy to continue supporting Rwanda’s efforts to manage its social safety net programs more efficiently, so that poor people can withstand economic and climatic shocks better and benefit more from economic growth,” she said

Rwanda has recently seen a record decline in poverty, from 57 percent in 2006 to 45% in 2011. The government has partly attributed this success to its social safety net programs.

Zambian Bishop Sees Gold Opportunities to Invest in Rwanda’s Education Sector

When a clergy professes a belief and lives to act, it often yields forth for the community. And for Zambian evangelist Joseph Ndashe, there was not a second day that he doubted the heights at which the education sector in Rwanda will rise.

“We’ll never go wrong if we invest in Rwanda,” the Bishop Ndashe had told leaders at a local church in Tennessee, Cleveland, after doing an assessment of the opportunities in Rwanda.

The Zambian only saw the roses in the education sector and today, he says there is no better time to invest in it than now, because new policies in the country are more than enticing.

Bishop Ndashe convinced the US-based Church of God World Missions to invest nearly Rwf450m in buying and renovating a secondary school in Niboye, Kicukiro district. This was after the mission’s initial plan to build a Rwf750m secondary school in the same region had failed due to registration pitfalls.

In 2011, the Church of God World Missions in Rwanda bought the formerly French-speaking general secondary education provider, Ecole Secondaire St. Patrick, at Rwf350m. The church, which by then was only registered in Kicukiro district, has turned St. Patrick into an A-Level technical school called Church of God St. Patrick Secondary School.

Bishop Ndashe, who is now the school’s administrator, said the government’s current education policy that focus on either technical training or general education instead of doing both is encouraging.

“We opted to go for professionals so that if the students fail to go to university they are able to use what they learned to go and get employment, that’s one of the things that attracted us,” he said. “And then there is no much interference from the government as long as you follow the right policy without breaching.”

He also said the shift to using English as the language of instruction in schools instead of French was another attractive point for his church because most of its trainers speak English.

The church’s investment in the school came as a relief for its former owners Anastase Sebudandi and associates who couldn’t afford to exclusively train students taking professional courses since they would lose money without students taking general courses in O-Level.

“We were going to cut the number of our students from 600 to 200 and that was not going to generate enough money to pay off our loans,” Sebudandi said. “We were failing to maintain the school.”

The church invested an extra Rwf50m to renovate classrooms, buy computer equipment, and increase teachers’ salaries. It is also planning to invest another Rwf50m to provide better computer labs and washrooms for the school.

Profits expected after five years

Bishop Ndashe says he hopes to make a return on his investment in the next five years. Focus will then shift to expansion to receive international students.

It all looks like a long shot given, but the prospects are rosy. Last year, the country’s target of students entering Technical and Vocational Education and Training (TVET) system was 40 per cent of all graduates of nine-year basic education, while the target by 2017 is projected at 60 per cent.

According to Pacifique Karinda, who oversees human capital and institutional development at the Rwanda Development Board, the current demand for TVET schools calls for more investment.

“We believe it’s a big opportunity for investors because this is a new system that is being implemented,” he said.

For the Church of God World Missions in Rwanda, Karinda could be preaching to the converted because it has already bought two pieces of land; in Gahanga, Kicukiro district, and in Nyagatare, inEastern Province, to expand its chalkboards.

Rwanda ; Oil prospects gain momentum

Prime Minister Pierre Damien Habumuremyi recently told parliament that studies done so far have shown that there are very high prospects of oil deposits in East Kivu Graben region of Rwanda.

This is the first ever solid confirmation from government on the stretched exploration activity by the Canadaian exploration firm, Vanoil Energy Limited.

Habumuremyi said: “Exploratory studies will continue. The first phase showed that there are many signs indicating that it is there. The second phase which will begin at the start of 2013 will be able to show the quantity and nature of the oil Rwanda has.”

The area covers parts of Nyungwe and Gishwati forests, and Lake Kivu.

Vanoil Energy Ltd, which was previously known as Vangold Resources Ltd, has explored for oil in the area for over five years.

Earlier this year, government entered into an agreement with Vanoil to embark on airborne magnetic and gravity survey as an initial step.

Requests for details were not fully answered as the Premier did not appear inclined to elaborate further. But he promised that the House will be kept in the know, as more findings come out.

The announcement comes on the back of an article published in the Arabic Oil and Gas Journal that indicated that, Vanoil saw Sudan-like features on Rwandan seismic, indicating the possibility of oil discovery in Rwanda.

Jacqueline Mukakanyamugenge said: “I wish to know more about this pleasing development relating to findings from studies indicating that in Rwanda, we have oil. When will these studies wrap up so that we know, conclusively, the amount of oil in Rwanda and when it starts getting exploited so that it benefits Rwandans?”

“I don’t want to go into theoretical details which are technical, but I am assuring lawmakers that the second phase which will follow, of digging deeply, in depth and width begins soon; the contractor is here and as studies reveal new findings, we shall update you,” he said.

On April 18, 2008, the explorer [then called Vangold Resources Ltd] had announced the completion of the first exploration phase which involved the use of satellite imagery.

At the time, images showed “signs of seepage” but this did not “really tell much,” Vangold’s Country Manager, Joseph Katarebe, told The New Times, confirming that other thorough phases would then commence.

Vangold started exploration in February 2007. Officials have in the past told The New Times that government is taking precautions, to get a good deal.

When contacted for the latest, on Friday, Katarebe said the line ministry is best placed to give an update or any other comments.

In 2010, the oil exploration programme was transferred from the Ministry of Infrastructure to the Ministry of Natural Resources.

Minister Stanislas Kamanzi could not be reached, for comment, by press time.

Whereas oil exploration in Rwanda began later, Uganda, Rwanda’s neighbour to the north, began exploring oil as early as 1920s and it was not until 2006 that the first oil discovery was made in the Albertine Graben, a region on the Uganda-DRC border.

 

Lessons for SA poverty-reduction from Rwanda of all places.

Philadelphia – When most people hear the name ‘Rwanda’, they think bloody massacres, genocide, and machetes, but that mental image is so twenty years ago – the truth is that today, Rwanda is evolving into one of Africa’s best economic success stories, with plenty of lessons to teach the rest of the continent.

Consider the following. Since 1996, Rwanda’s GDP has grown by an average of 8.5% a year (see chart below, note that data for 1994/5 were excluded as they reflected the changes wrought by the genocide and civil war). Even coming off a low base, and with a few down years, this is an impressive performance.

But even more impressive is the fact that was recently revealed by the 3rd Rwandan Household Living Conditions Survey: over the last five years or so, Rwanda has reduced its poverty rate from 57% to 45%, which means that close to 1m Rwandans (out of a population of 10.6m) have been lifted out of poverty in just a few short years (the table below summarises some of the key results of the survey).

 

Results of the Rwandan Household Living Conditions Survey

Metric

2005/6

2010/11

Poverty rate

56.7%

44.9%

Gini coefficient

0.522

0.49

GDP per capita

$333

$540

Net primary school enrollment

86.6%

91.7%

% with safe drinking water

70.3%

74.2%

% with access to electricity

4.3%

10.8%

Ownership of mobile phones

6.2%

45.2%

Maternal mortality

750

487

Infant mortality

86

50

Under 5 mortality

152

76

This is a remarkable achievement, particularly given the country’s heritage of inter-tribal bloodshed and civil war, so let’s take a closer look at how Rwanda managed this impressive feat, and what lessons it has for other countries in Africa, including South Africa.

The secret of its success

If you look closely at the information above, you’ll notice that Rwanda has achieved two separate but related things: it has grown its economy substantially and rapidly, and it has reduced poverty and inequality. These two things don’t always go together – some countries grow rapidly but retain high poverty levels – so Rwanda is an especially encouraging success story for African countries facing the twin challenges of low growth and high poverty levels.

On the economic growth front, there have been several factors that have helped boost Rwanda’s growth. One, admittedly, was the rise in global coffee prices which, together with programmes that improved agricultural outputs, gave Rwanda’s economy a nice boost. But more important were changes in how the country manages its domestic economy.

For a start, over the last few years Rwanda has made great strides in making itself a lot more business-friendly. In 2009, for example, Rwanda was named the world’s top reformer by the World Bank’s Doing Business report for its efforts in streamlining the process of setting up a business, improving investor protections, and speeding up the property transfer process. Between 2011 and 2012, Rwanda moved up five spots in the global Doing Businessindex, which ranks 183 economies in terms of how business friendly they are. In 2012, Rwanda was ranked 45 out of 183, making it one of the most business-friendly places in Africa.

In addition, the Rwandan government under Paul Kagame has emphasised clean government based on performance. According to Transparency International’s Corruption Perceptions Index, Rwanda has improved from a score of 2.5 in 2006, indicating a high level of perceived corruption, to 5 in 2011, indicating moderate levels of corruption (the scale ranges from 0, totally corrupt, to 10, totally clean). This focus on performance and fighting corruption has made Rwanda a much better and more efficient place to do business. Finally, Rwanda has managed its finances prudently, keeping inflation and budget deficits low.

In terms of poverty reduction, Rwanda has also done a lot of innovative things. Its primary poverty-reducing strategies were aimed at the agricultural sector, because Rwanda is primarily an agri-based economy. Programmes that helped subsistence farmers included agricultural extension services that provided fertilizers, crop advice, and even a “one cow” programme that gave poor families a free cow. Like the cash-transfer programmes that are being touted as excellent poverty reduction strategies, the one cow programme puts a productive asset into the hands of the poor, enabling them to make choices to improve their livelihoods.

So what can we learn?

So what are the lessons that other countries, including South Africa, can draw from Rwanda’s example? Basically, there are four:

1. Focus on improving the business environment, and growth and investment will eventually follow. Reforms that make a country more business-friendly will produce results.

2. Corruption is a poison that slows growth and harms the poor. Governments must take a firm stance against corruption and work hard to reduce it. Government positions should be awarded based on merit and performance.

3. Anti-poverty programmes should be designed with a country’s unique characteristics in mind. In Rwanda, with its high levels of agricultural employment, programmes like the one cow programme make a lot of sense. In places where the poor face different challenges, policies should be tailored to their circumstances.

If Rwanda, with its gory history and status as a small, landlocked state can do so much to fight poverty, so can other nations. Let’s hope African governments across the continent embrace the lessons Rwanda teaches us.

 

 

Rwanda taking on poverty by the horns

 

http://www.rwandagateway.org/spip.php?article1444&var_mode=calcul

 

An hour’s drive east of Kigali is the Nyagatovu model village, a 90 home settlement and one of the showpieces of the Rwanda’s attempt at eliminating poverty.

The settlement is built on the premise that by concentrating families and their resources, farm productivity can be improved, services can be delivered more effectively and subsequently incomes will be boosted and poverty will be shood out the door.

Barely two years into the project and the settlement has begun selling surplus matooke to local markets and Kigali, they have forty head of dairy cattle in a fast growing herd and they have several tomato green houses.

The village’s young eager leader Jean de Dieu Ntirenganya tells me he moved to the settlement a year ago and can see the light at the end of his tunnel.

“We had our small plots and were just growing food for eating and it was not enough, now not only do we have food for ourselves but we are now selling and making money, and there is still a lot of land,” the 25 year-old said.

Under the program, which is being rolled out to all the 30 districts of the small east African nation, consultation and sensitatisation of the communities leads to resettlement – where beneficiaries exchange their land for land at the earmarked sites and join up to 150 other families.

At the settlements government builds each family a two bedroomed house, in addition each family gets a cow, to improve family nutrition, income and whose waste is employed as manure in the fields. Each family also gets about four acres of land in a consolidated tract of land. At Nyagatovu the crop they concentrate on is matooke and more recently tomatos.

For all intents and purposes Nyagatovu is now a urban center, with lines radiating from power poles into homes and roads quartering the more than 50 acres of residential area.

I am suspicious of government handouts – or handouts of any type. Our guide Emmanuel Mugabo of the Local government ministry said they were aware of the dangers of this government largesse and ask every family to build their own kitchen and pit latrine in order to get buy into the project and ensure sustainability.

The Chinese collectives of the 1960s and 70s, on which this scheme seems to draw a lot of lessons, were successful in raising farm output but failed because the farmers were restricted to selling their produce to the government. In Rwanda the settlements sell their produce on the open market not only getting better than market rates but being paid cash.

At the heart of the poverty challenge is poor productivity, before you even talk about access to markets.

In explaining the historical wealth divide between the more developed northern versus the poorer southern economies of the world, is the fact that agricultural surpluses thanks to the agrarian revolution of more than 600 years ago, have been registered in Europe and later America ever since. These surpluses meant two things, that those societies could sustain thinkers – inventors and administrators as well as professional armies, which then could project their will abroad and secure markets and raw materials for their industries. By extension in fighting poverty the issue of surpluses has to be addressed.

With concentration of populations, delivery of social services – education and health as well as infrastructure will be more efficient ensuring a better quality of human resource and lower costs of doing business in Rwanda. In addition since each settlement is generating income and wealth financial services follow and all other services like retail trade as well.

The market economy has been shown to be the most effective driver of wealth creation. Market economies evolve and cannot be designed. However governments have a responsibility to create an environment in which markets can thrive. In addition through good governance, nations then mitigate the worst excesses of the market by ensuring good service delivery that can allow everybody a chance at material advancement.

It is still early days but barring bureaucratic inertia, Rwanda is setting itself up to be the real breadbasket of the region. But the implications of this scheme go far beyond that. This model with some variations can be applied to creating clusters of anything from crafts, manufacturing and ICT to make Rwanda the economic hub of the East African Community.

Adapted from Shillings and Cents