Category: Business

The IMF Managing Director Christine Lagarde has said that her next focus is to raise funds for the IMF’s Poverty Reduction and Growth Trust (PRGT), which provides low-cost loans to poor countries in Africa, Asia and Latin America.

She urged wealthy countries, which made a profit from the IMF’s sale of 403.3 tonnes of gold last year, to reinvest the windfalls into the PRGT.

“We need more money in that trust if we want to finance concessional loans for the low-income countries,” she said after talks in Washington with African finance chiefs.

The IMF in 2009 set a target to raise $17 billion to lend to the poorest countries. So far, 32 IMF member countries have reinvested profits from the gold sales into the fund.

Lagarde’s comments were aimed at easing concerns that the IMF and donor nations may turn a blind eye to poor countries as they home in on containing the euro zone crisis.

Elizabeth Stuart, a spokeswoman for Oxfam, said poor countries have exhausted their resources to deal with contagion from the rich world, while facing the first drop in aid since 1997.

“Governments are throwing money at the IMF to deal with the European crisis, but where is the money for poor countries?” she asked.

Meanwhile, earlier in March (15–28) IMF mission, led by Catherine McAuliffe, visited Kigali-Rwanda to conduct discussions for the fourth review under the Policy Support Instrument (PSI).

McAuliffe issued a statement, “Rwanda’s recent economic performance has been strong. The growth of real gross domestic product (GDP) exceeded 8% in 2011 and is projected to be in the range of 7.5–8% for 2012 and 2013.

The World Bank has reported that Sub-Saharan African economies will experience faster growth in 2012 as still high commodity prices and investments in mining offset the drag from weak exports to Europe.

The World Bank estimated growth in sub-Sahara Africa rising 5.2% in 2012, which will be an acceleration from the 4.9% expansion logged in 2011.
This comes the Bank’s twice-yearly analysis of the issues shaping Africa’s economic prospects.

That would take growth in the regional economy just above the pre-crisis average of 5 %. The estimate is a touch below the International Monetary Fund’s forecast for 5.4 % growth this year.

“African economies continue to show resilience and some of the fastest-growing economies in the world are now in Africa,” said Obiageli Ezekwesili, the World Bank’s vice president for Africa.

“The urgent agenda remains sustaining the macroeconomic reforms while accelerating the structural reforms that will deliver the right quality of growth that creates jobs and raises incomes on the continent.”

Dr. Hussein Abdul the Director of Action Aid Nigeria says that African Leaders celebrate growth yet this doesn’t translate into poverty reduction. He says Poverty levels are still high and that there has been minimal transition
Hussein blames World Bank Economists saying they rely mostly on figures and never take a look at People on gorund.

However, the Bank noted that the regional economy was vulnerable to commodity price declines, given the cooling in Chinese growth. Commodities account for 70% of sub-Saharan Africa’s exports.

But the region has become a magnate for capital inflows as the debt crisis in Europe forces investors to find other places for their money.

According to the Bank, capital flows to sub-Saharan Africa rose by $8 billion in 2011 to $48.2 billion. Foreign direct investment, which accounts for about 77% of all capital flows to the region, contributed to about 83% of the increase.

“Recent foreign direct investment to the region has been spurred by increased global competition for natural resources, higher commodity prices, robust economic growth and a fast rising middle class,” says the Bank.

Bharti Airtel (“Airtel”) today announced the launch of its operation in Rwanda, expanding its footprint on the African continent to 17 countries.

Airtel has already said that it will invest over USD 100 million in its operations over the next three years and generate direct and indirect employment opportunities.

Commenting on the launch, Mr. Manoj Kohli, CEO (International) & Joint MD, Bharti Airtel said, “We are delighted to launch our operations and bring Airtel to the people of Rwanda. We believe that Rwanda is an extremely promising
market and this launch further strengthens our footprint in eastern Africa.

It will be our endeavour to bring world-class and affordable services to our customers in Rwanda and add value to the economy. We would like to thank the Rwandan government for giving us this opportunity, and we are committed to contributing to their aim of bridging the digital divide in the country.”

“The government welcomes Airtel into our country. We are looking to partner with the private sector to provide good quality, accessible and affordable telecommunications services,” says Right Hon. Dr. Pierre Damien Habumuremyi, Prime Minister, Rwanda.

Dr. Habumuremyi added: We are especially excited about the prospect of connecting Rwanda with the rest of the East African region and, indeed, with the rest of Africa. As Rwandans begin engaging in business ventures and looking for regional partners, telecommunications companies – like Airtel – that are able to provide access to a pan-African wireless network, become a crucial part of expansion.”

Airtel has also partnered with IBM in a move that will enable the teleco to offer superior customer experience in Rwanda. The partnership will see IBM deploy and manage the information technology (IT) infrastructure and applications to further support Airtel’s goal of providing innovative mobile services.

“As part of our strategic services agreement, we are happy to assist Airtel with its entry into the Rwandan market and ensure the very highest levels of support,” says Steve Martin, IBM Vice President and Senior Project Executive, Airtel Africa.

“Rwanda is an important market for IBM and we are actively strengthening our local presence and increasing our ability to serve our customers and partners in the country.”

Ericsson, the world’s leading provider of services and technology to telecom operators, was selected to manage the network from end-to-end, including OSS/BSS solutions and managed services.

Lars Lindén, head of Region Sub-Saharan Africa for Ericsson, says: “This solution is using the latest Ericsson portfolio, and will be the first Airtel network designed as an all-IP solution. That means Airtel will be able to provide advanced services to its subscribers, expand quickly to accommodate quick growth, and keep operating expenses down.”

Additionally, this launch has set a record. Lindén adds: “The inaugural call was placed on the system on March 7. It took just 83 days to build this network from the start – the fastest Greenfield launch in history in Sub-Saharan Africa.”

Rwanda is among the fastest growing telecom markets in Africa and, according to the National Statistics Institute of Rwanda, mobile penetration in the country was at 38.4% as of July 2011.

The rapidly growing private sector – which includes telecommunications infrastructure and ICT–presents many opportunities for the development of the industry and the country’s economy.

In fact, according to the World Bank, each 10 per cent of broadband penetration results in a 1.3% increase in per capita GDP growth in developing countries.

Airtel was awarded the license by the Rwanda Utilities Regulatory Agency (RURA) last year to operate 2G and 3G GSM mobile services. Currently, the Airtel brand is present in both Francophone and Anglophone markets across the continent.

Rwanda has been represented at the round-table discussion hosted by the U.S. Chamber of Commerce- African Initiative.

John Gara, CEO of the Rwandan Development Board and Ambassador James Kimonyo, Ambassador to the United States participated in a round-table discussion that attracts Washington’s elite business community.

The Initiative aimed at showcasing various investment opportunities in Rwanda. The business group present included Oracle, Boeing, IMB, John Deere, Citi, Trimble Navigation and PAE Group.

The U.S. Chamber of Commerce’s African initiatives’ engages the U.S. business community on legislative policies that foster foreign direct investment in Africa, to facilitate trade between the United States and African countries, and introduce U.S. companies to the continent’s vast economic opportunities.

During the discussion, RDB’s Gara underlined his satisfaction on the recent signing of the bilateral investment treaty (BIT). The ratification of this treaty would enhance protection including nondiscriminatory treatment of investors and investments; the right to freely transfer investment-related funds; prompt adequate and effective compensation in the event of illegal seizure of investment.

It also includes freedom from specified performance demands, such as domestic content or technology-transfer requirements and provisions to ensure transparency in governance.

Gara noted, through BIT, Rwanda also hopes to build capacity in trade areas and fill the specialized skills shortages. He emphasised Rwanda’s deep business reform agenda that has steered it to be among the top 45th easiest places to do business, the 3rd easiest in Africa and the finest in the East African Community.

Sectors such as agriculture, mining, tourism and Information Communication Technology were underscored as some of the few Investment opportunities that are ready to be explored in Rwanda.

Moreover, as President Paul Kagame deems “people” as the most important resource a country could have, Gara also highlighted the growing need to invest more in education and healthcare sectors.

Echoing Gara, Ambassador James Kimonyo also highlighted the fact that trade and investment are important drivers of a country’s economic growth.

During the discussion, the Ambassador noted, United States’ economic strength and dynamism through the signing of the BIT not only deepens the two countries ties, but also supports important foreign policy goals.

He expressed his gratitude towards the Chamber’s unwavering assistance specially after the signing of the BIT.

The Ambassador emphasized Rwanda’s peaceful environment and political stability to re-assure the business moguls, and feature its competitive advantage.

Concluding the discussion, participants of the roundtable were encouraged to make Rwanda as their next destination. Meanwhile, the U.S. Chamber of Commerce will lead a group of investors to Rwanda during the summer months.

Rwandan exporters and importers have yet another choice through which they can send and receive products.

A Ugandan Based Katwine shipping company has now established in Rwanda after years of success in Uganda.

Katwine Company with head offices at Entebbe International Airport, Uganda is the authorized cargo accounts settlement system (CASS) agency for Air France-KLM.

According to Charles Jube Kimbowa the company manager and customer service personnel, the company is also shipping agent for some companies including; Greenfields, Marine and agro in Uganda and DHL Express, worldwide movers, flight logistics services in Rwanda.

Kimbowa said they aim at meeting end to end logistic needs of importers, exporters, manufacturers, global retailers, consolidators, forwarders and shipping agents and for Rwanda the company transports personal effects goods and general cargo by air, trucking and on oceans.

“We thought it was a good idea to open up a branch in Rwanda because both Uganda and Rwanda depend on exports and imports,” he said.

Katwine shipping company Kigali branch offices are located at ‘Jesus is Able-House’ (Sonatube), Kicukiro district.

The Ministerial Session of the EAC Sectoral Council on Trade, Industry, Finance and Investment concluded met last week in Arusha, Tanzania to grant a request by Rwanda for an additional six-month duty waiver on sugar imports, among other business.

The Sectoral Council on Trade, Industry, Finance and Investment which brings together the Ministers responsible for these dockets in the EAC Partner States gave its approval for the extension of the stay of application of the EAC Common External Tariff (CET) on 38,000 metric tonners of sugar to be imported into Rwanda following a report that the country could not take full advantage of a previous EAC allowance to import 50,000 metric tonnes duty free due to logistical issues.

The Sectoral Council directed that sugar exported from Rwanda to other Partner States attracts a CET rate during the six months the waiver is effective.

It further directed the Secretariat to develop a strategy on sugar production, supply and distribution after observing that persistent shortage of sugar in the region has continued since 2005, despite the commodity being a sensitive product and attracting a duty rate of 100%.

In the 15th general assembly held 25 March by COOPEDU a credit and savings cooperative, it has been adopted that COOPEDU will transform into a fully fledged commercial bank by the end of the year.

The 2011 audit report shows that COOPEDU cooperative wealth increased 84% valued at Frw 4.678.164.818.

COOPEDU has been in existence for the last 15years. It started with 610 members but today the number has reached 17393 including 80% as women.

The first Diamond ring in the world has been created in Switzerland at a cost of $70 million. It took a full year to carve the ring, which has been copyrighted.

The ring was created by Shawish’s president and CEO Mohamed Shawesh using lasers along with traditional diamond cutting and polishing techniques.

Most other diamond rings are composed of a precious-metal band with a diamond centerpiece.

The 150-carat ring runs laps around some other famous diamond competitors, including Beyoncé’s 18-carat engagement ring from Jay-Z and the even better known 30-carat ring given to the late Elizabeth Taylor by Richard Burton.

Rwandair has placed a firm Order for two Bombadier CR J900 NextGen Aircraft. Delivery for both aircraft is expected in October 2012. Transaction includes options on two additional CRJ900 NextGen regional jets with Bombardier Aerospace.

RwandAir will become the first operator of CRJ900 aircraft in Eastern Africa.

Based on the list price of the CRJ900 NextGen airliner, the firm-order contract is valued at approximately $89 million US. The value of the contract would increase to $185 million US should both options be exercised.

“Our two 50-seat CRJ200 aircraft have performed very well for us and have helped grow our business to the point that we require aircraft with more capacity,” said John Mirenge, Chief Executive Officer, RwandAir.

“Based on our experience with the CRJ200 aircraft, the dual-class 75-seat CRJ900 NextGen aircraft was the logical upgrade. CRJ900 NextGen aircraft also provide exceptional reliability and have much in common with other CRJ aircraft. These aircraft will be configured to have 7 business class seats and 68 economy class seats”.

“Other key factors that contributed to our decision to choose the CRJ900 NextGen aircraft are Bombardier’s customer support offering and cooperation in further developing RwandAir’s technical capacity,” added Mr. Mirenge.

“In the CRJ900 NextGen regional jet, RwandAir will have an aircraft with the best economics in its class,” said Mike Arcamone, President, Bombardier Commercial Aircraft.”

“The aircraft is of the ideal size to allow the airline to connect its regional markets that have become too large for smaller aircraft, but too small for RwandAir’s larger jets to serve efficiently.”

Operating from Kigali as its hub, RwandAir’s fleet includes two Boeing 737-800NG, two Boeing737-500, and a Dash8-200. The carrier serves most East African Community capital cities with daily flights and it flies to Johannesburg, Brazzaville, Libreville and Dubai.

There are currently more than 200 Bombardier regional jet and turboprop aircraft in service with, or on firm order from, approximately 50 operators in the Middle East and Africa.

Bombardier’s Commercial Aircraft Market Forecast for the period 2011-2030 projects that the fleet of Bombardier commercial aircraft in the Middle East and Africa will continue to grow, forecasting deliveries of 980 aircraft, or seven per cent of the worldwide total of 13,000 units in the 20- to 149-seat market segments during that period.

Including the order from RwandAir, Bombardier has recorded firm orders for 1,711 CRJ Series aircraft (including 268 CRJ900 and CRJ900 NextGen aircraft), with 1,661 aircraft delivered as of December 31, 2011.

To register Business in Rwanda now takes only six Hours. It has previously been 24hours. The registration process and the requirements remain the same.

Rwanda Development Board (RDB) last Friday announced the new reform as part of the comprehensive business reform agenda aimed at creating a foundation for making it much easier for the business community to operate in Rwanda.

The cost for registration remains at Rwf 15.000 (US$ 25) while online registration is free of charge. The Business Development Centres (BDCs) continue to facilitate business registration in the Provinces for clients who are unable to travel to Kigali.

“This proves the Government’s commitment to improve service delivery and ease doing business in Rwanda in order to further develop the Private sector,” said Louise Kanyonga, the Registrar General while officially announcing the change in time for business registration.

“We put the private sector at the forefront when we are reforming, therefore we are committed to reducing any possible hurdles they face,” Kanyonga added.

This was announced coincidentally during the study tour to RDB of Senators and Members of Parliaments from Africa, Europe and Development Partners from World Bank, IMF and ADB.

The Senators and MPs were in Rwanda on a 3day high-level meeting of international parliamentarians organised by the Parliamentary Network on the World Bank (PNoWB).

The conference dubbed “Private sector development in Africa: Cornerstone for sustainable growth,” was opened by the President of Rwanda, HE Paul Kagame and other notable key Speakers were Obiageli Ezekwesili, the WB Vice President for Africa; and Arnold Ekpe, the President of ECOBANK, Alain Destexhe, MP, Chair of the Parliamentary Network and Roger Nord, Deputy Director, IMF’s Africa Department.

The conference also discussed how countries can improve their ranking in international evaluations, notably in the global Doing Business report.

Most high ranking countries in the World Bank’s Doing Business report register their businesses in 8 hours. Rwanda currently ranks 8th in the world in the ease of starting a business considering the procedures, time, and cost.

TheDoing Business Project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the sub-national and regional level.

Launched in 2002, the project looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.

The business reforms are part of the government’s wider efforts to promote Rwanda as a business and investment destination, in order to drive the growth of the private sector and generate wealth.