Rwanda Country Brief: September 2010
Thursday, 21 October 2010
The latest updates on the business environment, sector news, data releases and key deals.

  • Sustained business reforms: According to Frank Twagira, the Coordinator of Doing Business National Taskforce, the Rwanda Development Board is in the process of implementing reforms to improve the business environment, include online tax calculations and company registrations, and easier construction permits. Rwanda has been named by the World Bank as one of the best performers globally in the last Doing Business Survey, having shot up from rank 146 to rank 67, and Twagira stated that Rwanda was looking for another improvement in its ranking in the next survey out in November 2010.
  • One remaining concern, raised by the World Bank in its Investing Across Borders assessment, is that Rwanda’s economy is characterised by monopolies or near monopolies in a number of areas, including energy, transport and the media. In the World Economic Forum’s Global Competitiveness Index (CGI), Rwanda came 80%, distinctly ahead of Kenya, East Africa’s largest economy, at rank 106.
  • Aid: German aid agency GTZ and Rwanda’s Ministry of Trade and Industry (MINICOM) signed a three-year agreement under which Germany will help Rwanda build policy analysis and formulation capacity.
  • A fuel storage facility is currently under construction and scheduled to be completed before the end of 2010, according to the Permanent Secretary in the Ministry of Trade and Industry, Emmanuel Hategeka. This will help shield Rwanda against global fuel price fluctuations. Meantime, top government officials reassure Rwandans that the Kenyan fuel crisis should not affect prices at local petrol pumps in the near future.
  • Kigali Free Trade Zone: To address investor concerns over lack of available land, the Rwandan government has gazetted over 260 hectares of land for the Kigali Free Trade Zone (FTZ) and Industrial Park. The land can be used for new industrial property, storage and warehouses. Two investors, Agropack and Bakhresa Group, have already taken up plots. According to Alex Ruzibukira, coordinator of the FTZ, 30 investors have shown interest, but overall, companies are slow in taking up the facilities, which Ruzibukira explains with the sluggish performance of the first contractor. Rwandan companies asked to relocate from wetlands in Gikondo are also expected to consider this option.

  • Trade: Rwanda registered a 26% increase in trade in the first half of 2010. Main export products were coffee, tea and minerals, accounting for nearly 65% of all exports. A survey carried out by the National Bank of Rwanda also found that informal cross-border trade, mostly agricultural products and livestock, is significant at an estimated RWF27.6bn of exports. Total exports are estimated at RWF137.3bn.
  • Inflation: September has Rwanda’s inflation at 3.7%. Price increases were driven by a recent jump in vegetable prices (vegetables make up 25.3% of the CPI basket). Prices of bread and cereals increased slightly in September, but are still considerably lower than price levels three months ago. Prices of other key components, such as utilities, remain stable

  • Mortgage financing: The Rwanda Bankers Association (RBA) has issued new guidelines on the information and documents that clients need to present with an application for mortgage financing. RBA hopes that this will streamline mortgage applications and speed up the approval process.

Banking and finance:

  • Trade finance: Rwanda Development Bank’s (BRD) trade transactions, launched in March 2010, reached RWF2bn to date. At the moment, BRD fund only import transactions, but aim to expand their services to export financing as well. Due to limited refinancing, BRD may not reach its target of RWF11bn for this year.
  • Fina Bank Rwanda reported a 51.5% drop in profits to RWF116.1m in the first half of 2010, citing recruitments costs to implement the branch expansion programme – the bank plans to open three more branches until year end, and four to six new branches in 2011   as well as substantially increased costs of funds. However, Fina Bank is optimistic of reaching its RWF1bn profit target by end 2010. According to Managing Director Steve Caley, the bank made one substantial bad debt recovery in 2009, which translated into an increase in net profits. In 2010, however, Fina Bank will no longer be eligible for tax exemptions as investment incentives.
  • Banque Populaire du Rwanda (BPR) have launched a mobile banking service that provides access to the bank account via mobile, transfers, bill payments, and purchases of airtime. Fina Bank, Rwanda Commercial Bank and Bank of Kigali also offer mobile access to bank accounts.

  • Lower interconnection fees: In efforts to deepen mobile penetration by encouraging mobile service providers to lower service costs, Rwanda Utilities Regulatory Agency (RURA) plan to lower the interconnection fees between operators. RURA has commissioned a study to be completed, after which a new pricing structure may be release. Spokespeople estimate that this process will take four months.
  • 4th mobile operator’s license suspended: RURA is reserving numbering codes for a fourth mobile operator, set to join MTN, Tigo and Rwandatel on the Rwandan mobile market, but has suspended their license until a ‘policy decision is taken’.
  • SIM Card registration: RURA’s Director General, Regis Gatarayiha, says the government will begin registering all SIM cards early next year, in an effort to prevent the commission of mobile-related crimes. RURA and operators are still involved in talks to outline a procedure for the execution of this plan.
  • SMS flight schedules: Mobile operators MTN and Tigo have partnered with the national airline, RwandAir, to provide passengers with updates on flight schedules by sms. RwandAir also state that it was working on an online booking and credit card payment facility.
  • MTN slashes SMS prices: Under a new promotional package, MTN’s 2m subscribers will be able to enjoy text message price cuts of 66.6% and 52.8% for on-net and off-net SMS respectively. Another MTN promotion allows MTN users a 70% discount on international calls. MTN is Rwanda’s mobile market leader and these deals, in advance of the planned entrance of a fourth competitor onto the mobile stage, might be considered a bid to consolidate this lead.
  • Mobile overdraft: Tigo launched the ‘Tira Tigo’ airtime overdraft facility. It is only available for prepaid subscribers, and they need to have been active for at least three months. The maximum account to borrow is RWF80, which will attract a RWF10 service fee. Tigo have signed up 500,000 subscribers in seven months of operations.

  • Tracing ore sources: In an effort to mitigate the impact of the US’s recent ‘conflict minerals bill’, Rwanda is planning to set up a scheme which will allow buyers to trace the origins of tin, in compliance with global tin authority ITRI, and other ore. The scheme is voluntary, but it is expected that all companies will comply with it since it will prevent the shrinking of their market. Rwanda has been regarded as a crucial conduit in the illegal trade of ‘blood minerals’ from the Congo. Rutongo Mines Ltd, the largest producer of cassiterite in Rwanda, will be the first to adopt the scheme.
  • Government marketing initiative: The Ministry of Forestry and Mines (MINIFOM) will market Rwanda’s minerals to foreign investors, in an attempt to lend a hand to the mining industry. Minister for Forestry and Mines, Christophe Bazivamo, called on the industry to set a high standard for its products, and Chairman of the Rwandan Mining Association, Mahmoud Salem commented that there was plenty of opportunity for local investment, too. This follows a decision in August to have Rwandan mining firms audited, and, dependence on compliance with international standards, duly accredited.

  • Rwanda nearly ready to export food: Increased productivity has allowed Rwanda to achieve its initial food security targets. A government-led programme now has the country processing produce in the name of value addition. The government has also earmarked funds to build new granaries, and once storage capacities are increased, Rwanda should be in a position to export agricultural produce, say representatives.
  • In further efforts to increase agricultural output, the government has plans to begin a USD200m terracing project on Rwanda’s hillsides – but at present, only half of this sum is available.
  • Seed distribution: The Rwandan government has distributed nearly 8,000 metric tons of high-quality seed for the new season in an effort to help agricultural production meet demand. The seed includes maize, wheat, rice and Irish potatoes. But Irish potato seed especially is still in short supply, and the Director General of the Rwanda Agricultural Development Authority called on farmers to participate in seed multiplication for the crop. Farmers are also being advised to apply for loans through the Rural Investment Facility (RIF). The government will service 25% of each loan. However, the following indicates that there are other concerns than just increasing output on farms:
  • Nyamagabe Wheat Farmers in trouble: Farmers in Nyamagabe are stuck with tonnes of wheat after their sole buyer, Minoterie de Nyungwe wheat processing factory, ran into financial trouble. The Vice Mayor in charge of Economic Affairs, Emmanuel Murangwa, has been marketing the leftover wheat to cooperatives, who have been buying some, though not all, of the wheat for storage.
  • Potential new markets for tea exports: In the wake of a government scheme to privatise all tea plantations and factories, new markets are being sought, and found, by Rwandan tea traders. Director General of the Rwanda Tea Authority said Rwanda will be striving to make the Middle East a crucial market for its teabags. There are hopes that entry into the Middle East via Dubai will open markets elsewhere in the world, since Dubai supermarkets have branches elsewhere in the world. At present, there are 40,000 cartons of bagged and loose Rwandan tea ready to be traded in Dubai. Meantime, Yorkshire, a UK-based tea company, is seeking a contract with the Tea Authority to sell Rwandan tea abroad, but the particulars of this deal are yet to be hammered out.


  • Rukarara Hydropower Plant: Construction on the USD19m, 9.5MW power plant is entering its long-awaited final stage, said the State Minister for Energy and Water. The plant’s product will be connected to the national electricity grid next month. Rwanda currently produces a total of 27.3MW of hydropower, and beyond Rukarara , other plans are in place to increase output, including a hydropower plant at Nyabarongo, which should generate 28MW of electricity upon completion in 2013.
  • Oil Exploration delayed: The Ministry of Infrastructure announced that continued oil exploration in the Kivu Graben area by Canadian firm Vanoil Energy Ltd. has been delayed by bad weather, and will be resumed in the rainy season (October-November) when winds blowing through the area are less forceful.


Rwanda-EAC Trade on the Rise: Over the last two years, Rwanda’s trade with East African Community (EAC) partner states has risen by as much as 41%. The volume of trade now stands valued at USD337.6m, up from USD237.8m in 2008. The Ministry of Trade and Industry revealed that exports to EAC states remain stable at USD37.9m, and that total exports to the EAC in 2007 and 2008 accounted for 16% and 11.2% of Rwanda’s total exports respectively. Imports, on the other hand, increased over the same period, with 2007’s total amounting to USD199.9m, and 2008’s EAC imports totaling USD299.8m.

Traders petition EAC: The East African Legislative Assembly (EALA) is currently reviewing petitions issued by members of the East African business community, citing unfair taxing and regulations. EALA is holding meeting in Bujumbura, Burundi.

Share this article with others:
Digg!Reddit!!Facebook!Slashdot!Netscape!Technorati!StumbleUpon!Newsvine!Furl!Yahoo!Ma.gnolia!Free social bookmarking plugins and extensions for Joomla! websites!
Comments (0)Add Comment

Write comment