Rwanda Country Brief: January 2011
Friday, 18 February 2011
A brief overview over key deals, sector news, data releases and other news.

  • Inflation: Inflation is expected to rise sharply this year after relatively low levels throughout 2010. A number of external factors will push up the price level, including oil prices, which have reached USD100 per barrel, and rising global food prices, which are now at their highest level since 2008. Regional weather conditions will also have an impact, as poor rains restrict the supply of food crops to market. Food prices make up over 50% of Rwanda’s CPI basket. On the demand side, a rebound in domestic economic activity driven by growth in private sector credit will also create inflationary pressure.
  • Growth: The IMF expects growth of 6% to 7% in Rwanda for 2011. IMF Resident Representative Dmitry Gershenson told the Business Times newspaper that the government’s investment strategy, the recovery in external demand and pick up in credit to the private sector all point towards a generally favourable economic outlook for the year ahead.

  • Bralirwa IPO oversubscribed: Rwanda’s first ever IPO was oversubscribed by 174%. The sale of 25% of Bralirwa, the country’s largest beverage company, generated bids of USD80m against a projected USD29.5m. According to Finance Minister John Rwangombwa, this was due to confidence in a steady economy, governance of the country and the solidity of the company. The minister also stated that the government had sold the shares at a 20% discount in order to stimulate activity in the secondary market. Rwandan citizens represented 79% of the applications.
  • Saudi Fund sign USD17m loan agreement: Rwanda signed loan agreements worth USD17m with the Saudi Fund for Development for projects in the roads and electricity sectors. USD5m will be spent on the Butare-Kitabi-Ntendezi Road which links Kigali to the western and southern parts of the country. A further USD11.7 will help finance the Rwanda Energy Roll-out Programme which aims to increase connection to the national grid from the current 6 % to 16 % by 2012. The loan will be paid back over 30 years at an interest rate of 1 %.


  • Rwanda completes new 9.5MW hydro power plant: The Government of Rwanda announced that they have completed a 9.5MW hydro-electric power plant which will contribute 11% of total national generation capacity at a cost of USD23.5m. Plans are also in place for the construction of three further plants on the Nyabarongo, Rusizi and Rusumo rivers to generate a total of 234MW over the next five years in an attempt to cut the country’s energy deficit.
  • Methane gas project’s production begin delayed by one year: The first phase of a methane gas extraction project in Lake Kivu has been put back by a year due to delays in issuing an environmental impact assessment certificate. The USD325m deal with ContourGlobal, a US contractor, aims to eventually provide 100MW of electricity to Rwanda and the East Africa region. The first phase was due to produce 25MW by December 2010, but this has now been put back to December 2011. The project has already suffered several delays.
  • Geothermal potential estimated at 700MW: Rwanda may have the potential to generate up to 700MW of electricity from geothermal sources, according to a preliminary study by the Kenya Electricity Generating Company (KenGen). Two areas offer significant geothermal potential: Karisimbi, Kinigi and Gisenyi in the north-west, and Bugarama in the south-west.

  • Bank of Kigali to raise new capital for lending to SMEs: Bank of Kigali (BK), Rwanda’s largest bank, is looking to float 25% of its shares through an IPO in order to raise capital for lending to SMEs. The bank, which is currently 99.99% state owned, is looking to push into the high-growth SME sector due to low returns in the corporate sector. At the end of 2010, the bank’s asset base was USD294m, with USD157.6m net loans outstanding. The bank aims to increase its asset base by 30% in 2011.

  • Boom in construction activity: Rising demand for housing combined with a conducive business environment are driving a construction boom in Rwanda. According to statistics from the Rwanda Development Board, a government agency, investment in the construction sector increased from USD100m to USD350m between 2003 and 2008. A growing middle class, the return of the diaspora as well as population growth of 2.8% and urbanisation of 4% are driving the surge in demand.

  • Laying of fibre optic cable finalised: The rollout of a fibre optic cable linking Rwanda to the global broadband network has been completed on time, according to the Rwanda Development Board. The network is expected to be fully operational by April of this year. The network is creates the necessary infrastructure for Rwanda’s ambitions of becoming an ICT hub for the East and Central Africa regions, but the country will face human resource challenges.
  • Increased passenger numbers drive RCAA revenues: Rwanda Civil Aviation Authority (RCAA) revenues were up 25% over the past three years due to increased passenger numbers and air traffic at Kigali airport. The entry of new participants such as KLM and Air Uganda has pushed the number of weekly scheduled flights from 60 in 2009 to 100 last year.

  •  Tigo launches micro SIM cards: Smart phone users in Rwanda can now purchase micro SIM cards for use in the latest generation of mobile devices such as the iPhone 4 and iPad. The new SIM, which is half the size of the traditional SIM card, has been created for the latest smart phones by the European Telecommunications Standards Institute. Tigo customers can buy the new SIM cards for RWF350 or swap them for their older larger cards. Tigo has also cut the price of its wireless data modem from RWF25,000 to RWF19,700.

  • EAGI to invest USD10.5m in tile factory: East African Granite Industries (EAGI) is to construct a RWF6.4bn (USD10.5m) granite tiles plant in Nyagatare district in eastern Rwanda. The plant will be run in collaboration with China’s Beijing Union Stones, who will train 160 staff in mining skills as well as providing expertise and technology for the implementation of the project. The plant will produce up to 200,000 tiles per year according to demand, and will boost the local construction sector by reducing the demand on imports and lowering factor prices.

  • COMESA fund injects USD16m: Rwanda will receive USD15.99m from the COMESA fund to cover a shortfall in tax revenues over the first five months of financial year 2010/11. The money, which will mostly come from the European Commission, will mean that the treasury can pursue its planned spending targets without having to resort to budgetary cuts. Tax revenues for the current year are programmed to make up 13.6% of GDP, up from 12.2% in 2009/10. To finance ambitious development plans, the treasury aims to increase this percentage to 14.5% by 2013/14.
  • EU provides 45m Euro to promote regional trade: Rwanda is to benefit from a 45m Euro agreement between the EU and COMESA to expand and connect key regional transport corridors in the Northern Corridor. Funds will be used to connect Kigali with Gatuna and Rwanda with Uganda’s Northern Corridor. COMESA aims to implement a regional customs union by 2012, while a free trade agreement between Rwanda and DRC is still pending.

  • Opportunities in regional aviation market: Airlines in the East Africa region are positioning themselves for rapid growth over the coming years as more flight routes and a growing number of passengers offer significant profit potential. New destinations such as Burundi and South Sudan are opening up as well as increased competition on established routes such as Entebbe–Nairobi driving down prices. An open skies agreement that will open up regional airspace and further increase competition is yet to come into force.

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