Rwanda Country Brief: February 2011
Monday, 21 March 2011
Updates on the business environment, data releases, and sector news.

BUSINESS ENVIRONMENT
  • RDB to increase investment to fast track growth: The Rwanda Development Board (RDB) plans to fast track economic growth in 2011 by encouraging increased local and foreign investment in the country. In 2010, the RDB was able to attract USD381m in investment projects, but in 2011, it hopes to raise this figure to USD550m. RDB completed its restructuring in 2010, which has led to the creation of five economic cluster departments, as well as supporting divisions, which should work to promote growth in Rwanda’s priority sectors: agriculture, trade, industry, tourism, ICT and services. The RDB has also invested heavily in infrastructure, resulting in, among other additions, a completed 2,300km of fibre-optic ICT cable. Economic growth for 2011 is projected at 7%, reliant on good performances in agriculture, tourism and mining.
  • Bralirwa shares surge: Shares in Bralirwa, Rwanda’s largest drinks company, rose by 72% on their first day of public trading after their January IPO. The shares closed at RWF235 per share, up from the issue price of RWF136. The success of the IPO, which was oversubscribed by 174%, is expected to set the scene for the sale of more government assets to the private sector.
  • International Trade Law Capacity Building project launched in Kigali: President Kagame and AfDB Group President Donald Kaberuka ushered in the commencement of the joint project between the African Legal Support Facility (ALSF) and the Pan-African Lawyers Union (PALU). Its primary objective is the strengthening of international trade law practice in Africa, as well as strengthening the law for the sake of economic development.


DATA
  • Economic Growth: Rwanda’s economy grew by 7.4% in 2010 according to figures released by the Minister for Finance and Economic Planning. This is an acceleration from the 6% GDP growth in 2009, when the country was suffering from the effects of the global financial crisis and tight liquidity conditions affected domestic industry and services. The recent rapid growth has been driven by strong performances in the agricultural and service sectors, though industry continues lag behind potential, particularly in the mining sector. Accelerated growth towards the end of 2010 is expected to have carried over into 2011.
  • Inflation: Headline inflation rose to 1.09% in January 2011, up from 0.23% in the previous month. The rise was mainly a result of increased school fees at the beginning of the year. The National Institute of Statistics of Rwanda (NSIR) added that increased transport costs, due to rising fuel prices, had also had an inflationary impact on the CPI. Inflation remains the lowest in the East Africa region but is likely to rise through 2011 as a result of rising international food and fuel prices as well as adverse local weather conditions.


INDUSTRY NEWS
Tourism:
  • Hilton to invest RWF17.9bn hotel in Kigali: A new 160 room, 4-star hotel will be opened after Hilton Hotels has completed the registration of the USD30m investment, according to the Rwandan Development Board (RDB). Opulent Hotel Group, in partnership with Hilton Hotels, will also open luxury apartments in the capital.
  • RwandAir, SITA partner up: RwandAir have formed a partnership with SITA, a company that provides air transport communications and IT solutions. The deal should improve RwandAir's e-commerce platform to allow for online credit card purchases of e-tickets, which could help attract international customers to the airline.
  • British Travel Magazine names Rwanda top tourist destination: Wanderlust magazine named Rwanda the only African country in their top five 'Emerging Destinations' in 2011s Travel Awards. The RDB's head of the tourism department observed that Wanderlust's readers are high-end tourists who fall within Rwanda's target market. According to the RDB, revenue from the tourism sector rose 14% between 2009 and 2010, generating USD200m in 2010.

Energy
  • Government to review Lake Kivu methane gas extraction contract: The USD325m contract between ContourGlobal Kivuwatt Ltd and the government was signed in 2009. The gas extraction and electricity generation facility on the Lake was to provide 100MW of electricity, but the project has failed to take off prompting Minister of State for Energy and Water Ruhamya to announce a review of the deal.
  • Government seeks extra USD290m for expansion of electricity grid: The expansion project aims to bring electricity to 50% of the population over the next five years – currently only 6% of the population are connected to the national grid, although about 65% of the population lives within 5km of it. Minister of Infrastructure Vincent Karega said the government has 95% of the funds in commitments, with funding coming from the African Development Bank, the World Bank, the Rwanda government and other donor nations.

Telecommunication
  • BPR, Tigo partner for Mobile Banking: Banque Populaire du Ruanda (BPR) has joined up with TIGO Rwanda to allow Tigo’s subscribers access to the bank's mobile finance platform. BPR's CEO, Herman Klaassen, announced that the partnership is expected to push mobile banking transactions above the current RWF150,000 recorded each month. Mobile banking has reduced queues at BPR branches over the past few months, and the partnership is designed to offer Tigo subscribers an extension on their mobile facilities.

Mining
  • Suspected new mineral deposits in Rwanda: Forestry and Mining Minister, Mr. Christopher Bazivamo announced that Rwanda might have 21 new mining zones, which investors are yet to explore. The zones are suspected deposits of wolfram, tin, coltan, and gold. Mining is set to bring in about USD100m in 2011, becoming Rwanda's highest foreign exchange earner. In addition to mineral deposits, Bazivamo also commented on Rwanda's high-grade sand, potentially useful to begin a local glass industry.

DEVELOPMENT FINANCE

  • World Bank pledges USD104m to Rwanda for fight against poverty: The World Bank has announced that it will commit USD104.4m to Rwanda's fight against poverty. USD70m of this money is and IDA grant, whereas USD34.4 are an IDA loan. The IDA's total investment in Rwanda is USD237.28, spread over nine projects.
  • USAID/MLI sign USD58,000 agreements for food security promotion: The USAID-funded East African Market Linkages Initiative (MLI) has signed two agreements with six co-operatives worth a total USD588,000. The grant will go towards increasing food-crop productivity, profitability and quality.


REGIONAL NEWS
  • TMEA injects USD27m into EAC integration: Trademark East Africa (TMEA), a non-profit organisation that aims to promote regional trade and economic integration, has pledged USD27.5m to Rwanda's integration into the EAC. Plans include the reduction of transport costs, increasing border crossing efficiency, strengthening implementation of EAC protocols. Regional integration, it is hoped, will attract greater investment.



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