Tag Archives: Rwanda the Singapore of Africa

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.

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Rwanda, Kenya, Uganda to Build Super-Highway

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 scores another first in region with 4G rollout

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.

The new technology is expected to offer high-speed Internet and make Rwanda the East African Community leader in information and communications technology.

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.

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 Insurance Industry Grows By 36 Per Cent

The insurance sector grew by 36 per cent between 2011 and 2012, according to the latest National Bank of Rwanda monetary policy and financial stability statement released by the central bank last month.

The sector’s revenues also grew progressively, for instance by December 2012, the industry recorded Rwf214b compared to Rwf157 in 2011, representing a 36 per cent expansion. The gross premiums also grew by 67 per cent, from Rwf46b in 2011 to Rwf77b in 2012.

“Last year, we tripled our advertising campaigns, which increased general public awareness about insurance services and their importance. This was more new people coming on board,” said Pamela Abonyo, the assistant manager corporate communications at Sonarwa Insurance Company while commenting on the sector’s growth.

She added that a bylaw passed by the government last year, which made it compulsory for all commercial properties to be insured against fire also played a big role as property owners were forced to take on policies.

Last year, the industry’s profitability (after taxes) also increased by 192 per cent, from Rfw12b in 2011, to Rwf35b in 2012.

“Ever since the central bank started supervising the insurance sector, the number of policy holders (clients ) increase as this protected their interests,” Bonaventure Sangano, the director for non-bank financial institutions department at the central bank, said.

He added that separation of life and non-life insurance, instituting of corporate governance structures, coupled with latest licensing of a number of insurance companies, boosted capitalisation and ensured efficient management.

“The fact that last year in July, the government made a general salary increment for most of its employees may have partly contributed to the general increase in subscription to insurance services,” noted the National Bank of Rwanda governor, John Rwangombwa, at a recent media conference.

By the end of 2011, the sector had six non-life insurers, three life and two public insurers, totaling to 11 insurers in the entire market. However, by the end of 2012 the number had increased to 152 insurance agents, six insurance brokers and nine loss adjusters.

The liquidity position of the insurers also improved as the current ratio stands at 241 per cent.

The return on assets increased from 9 per cent to 17 per cent, and the return on equity from 13 per cent to 25 per cent, according to this periodic statement review

The pension sector is comprised of the National Social Security Fund (NSSF/CSR), which merged with Rama to form Rwanda Social Security Board (RSSB) and about 40 private pension schemes.The National Social Security Fund covers largely salaried workers representing eight per cent of the working population in Rwanda.

The pension sector assets increased by 74 per cent from Rwf192b recorded during the quarter that ended in December 2011, to Rwf334b recorded in the quarter that ended in December 2012, this excludes private pension schemes.

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.

Opec, Rwanda Sign Rfw8 Billion Power Project Loan Deal

RWANDA HAS acquired a $12m (about Rwf7.9b) loan from the Organisation of the Petroleum Exporting Countries’ (OPEC) Fund for International Development (OFID) to finance the country’s electricity expansion programme.

Suleiman Al-Herbish, the fund director general, and Ronald Nkusi, the director for external finance in the Ministry of Finance and Economic Planning, signed the deal that was finalised on Tuesday at OPEC’s headquarters in Vienna.

The money would fund extension works of the Rukarara hydro-power plant transmission lines, Nkusi said in a statement. The power plant, located in Nyamagabe district, Southern Province, currently produces about 9MW at peak capacity.

“The project will include a 30km transmission line from Rukarara to Kilinda and will enable the efficient dispatching of the Rukarara generated electricity, which currently serves only the Southern Province,” he said. “It will be completed in one year and will contribute significantly to achieving the Economic Development and Poverty Reduction Strategy target for electricity access to the masses.” Rwanda targets to connect 50 per cent households to electricity by 2017 from a paltry 16 per cent currently.

In an earlier interview, the Energy, Water and Sanitation Authority director general, Yves Muyange, said his body would embark on connecting 100,000 households to the national grid annually to achieve the country’s target.

Established in 1976, OFID operates as a multilateral development finance institution by OPEC member countries, with the objective of to reinforcing financial co-operation between OPEC members and other developing countries.

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.