Category: Business

President Paul Kagame has said Africa has become a profitable investment destination.

Kagame who was addressing participants at commonwealth business forum in Perth, Australia said that Africa had in previous decades not considered for these kinds of ventures due to several turmoil.

He told the forum that many African countries have economically developed tremendously and have attained political stability which would now give security to investments.

“My country Rwanda managed to grow by 8% economically in the past ten years.” Kagame said.

The economy of Rwanda has for the previous years, recovered from sharp downturn from 2.1% in 2000 and finance Minister John Rwangombwa has predicted to will continue its growth by 8.8% due to increased exports, expansion in the growth of services and construction sector.

“In many times Africa has been taken as unstable continent to invest in but most cases including exaggerations because there is nowhere you can’t find these kinds of problems. Africa has now stood up to confront all these economic development challenges and seeking way forward to the sustainable development,” Kagame added.

Giving an example of African countries that have been ranked in better positions in the world’s ease of doing business report, Kagame said Rwanda was ranked the 45th best country in ease of doing business among 183 countries across the world.

He continued to say that Rwanda was ranked 143rd nation in doing business report by 2009 and then shifted to 58th position last year 2010.

Kagame noted that this kind of development needed all African nations; there is a need for strong partnership between governments and private sectors.

“Partnership between governments and private sector is the way forwards for sustainable development. It has been vividly realized that governments alone or private sector alone cannot develop with support from each other,” Kagame said.

About 1000 global government & business leaders have participated in Perth, Australia meeting of guest speaker included President Paul Kagame while international business leaders invited included speakers expected to James Gatera, CEO & Managing Director, Bank of Kigali, Rwanda.

Many of the dignitaries including Nigerian President Jonathan Ebele Goodluck hailed Kagame’s leadership also welcoming Rwanda into commonwealth heads of governments meeting (CHOGM) since it was her first time to attend the high profiled meeting.

After this commonwealth business forum which is expected to end tomorrow, it will be followed by heads of government meeting on Friday.

The operations officer of the national electricity utility agency (EWSA) Nathalie Muteteri has affirmed electricity tariffs will decrease as the ongoing extraction of methane gas in Lake Kivu contributes to the current energy in the country.

Officials from Rwanda Energy, Water and Sanitation Authority (EWSA) are in awareness campaign explaining residents around Lake Kivu, issues related to the extraction of methane gas and its extraction.

“By 2017, at least 300 megawatts will have been extracted and other study are being conducted to see how to increase energy in the country so definitely tariffs will have to drop down,” Muteteri said in Karongi.

Muteteri also calmed residents on the fear that methane gas will explode or make Lake Kivu to overturn saying that water surface of the lake overweighs the gas to cause such incidents.

The lake’s seeming lethal combination of methane and carbon dioxide has continuously made residents fear for their lives, however methane gas is also Rwanda’s vital and promising energy source.

Reports have suggested that Lake Kivu is one of the world’s three exploding lakes at serious risk of overturning, a process where huge amounts of carbon dioxide are released from the lake’s under surface, suffocating almost everyone residing around the lake.

Experts have pointed out that there should not be any reason of panic, because the surface area of the lake is far larger than that of methane gas into the water and that extraction work is done by experts and so calling for no panic.

It is not the first time residents residing around Lake Kivu get panic. Early this year, the State Minister for Energy and Water, Eng. Colette Ruhamya had to respond to them dispelling concerns that the extraction of methane gas and other fossil fuels from Lake Kivu would not harm biodiversity in the area.

She said that several feasibility studies were carried out on how the extraction will be carried out without causing any harm and how effectively the waters can be separated from methane gas, which contains other fossil fuels.

Ruhamya added that a Lake Kivu monitoring team was set up to keep a close eye on the activities in the lake.

According to her, methane gas, carbon dioxide, petroleum, fertilizers, electricity and hydrogen sulphide are some of the fossils fuel that were discovered in Lake Kivu “but due to capacity constraints, Rwanda had to prioritized methane gas and electricity.

Lake Kivu is said to be containing 65 billion cubic metres of methane (50 million tonnes of petrol) lying 250 metres under the water.

The available electricity generation capacity in Rwanda in July 2009 is 69MW and is largely produced from hydro power and thermal sources.

Overall power production has stabilized after severe power shortages in 2004 that caused massive load shedding all over the country, prompted the government to hire emergency power solutions and invest in increasing generation capacity.

Generation capacity will be expanded to at least 130MW by 2012 mainly through investment in hydropower and methane gas to power projects.

Despite major reforms in ease of doing business, Trade and Industry Minister Francios Kanimba has said that discussions are underway to kick-off awareness campaign on insolvency law.

Resolving insolvency is one of the indices where Rwanda performed poorly in the ease of doing business report 2012 released yesterday by World Bank/International Finance Corporation (IFC).

Minister Kanimba was commenting on the Doing Business report 2012 where Rwanda emerged 3rd in Sub-Saharan Africa and 45th among 183 countries across the globe.

“There are some indicators where I am convinced that we have to do something to significantly improve, if I take indicator related to insolvency proceedings we are among the countries realy who are not performing well worldwide,” Kanimba said in an interview with igihe.com

“You know we have enacted insolvency law but the reality is the public awareness campaign for people to know about the new law to start its enforcement has not really started, and we are now discussing on an action plan to see what we can do to move quickly on this indicator from where we are around 165 perhaps to come to a double digits rank instead of triple digits where we are now,” Kanimba added.

Other indicators where Rwanda needs to improve include delaying contracts(39th) where it has not changed at all, protecting investors dropping from 28 last to 29th this year, while registering property falling by 20 positions from 41st last year to 61st this year and falling by 3 points in dealing with construction permits from 81st position last year to 84th position this year.

However among 10 indices measured, only three of them Rwanda performed very poorly in t5he ranking of Sub-Saharan African countries including dealing with construction permits (13th ), trading across borders (31st ), 36th out of 38 countries in resolving insolvency while the rest of indices performing below 10 indices.

Kanimba said that he is convinced that in two years to come, Rwanda will have gained significant improvements in the fallen indicators.

“There are some indicators that made some countries that were below outdo Rwanda. This does not mean we did not reform but even other countries are reforming too and they are working very hard joining this competition to see what can be made for their doing business to improve,” He said.

Kanimba called upon Rwandans not become complacent in this year’s score saying that there is a big room for improvement.

A new report from IFC and the World Bank finds that a record number of economies in Sub-Saharan Africa improved business regulations for local entrepreneurs in the past year.

Released today, Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency, and trading across borders.

This year, the rankings on ease of doing business have expanded to include indicators on getting electricity.

The pace of regulatory improvements has picked up across Sub-Saharan Africa. Six years ago, a third of Sub-Saharan African economies made improvements to the regulatory climate for domestic firms.

Between June 2010 and May 2011, 36 of 46 governments in the region implemented reforms in at least one of the 10 areas measured by the report.

With three reforms, Rwanda has jumped a further 5 places, landing this year at position 45. Rwanda is third best performer in Sub-Saharan Africa, only behind Mauritius and South Africa.

Rwanda made starting a business easier by reducing the business registration fees. And it eased firms’ administrative burden of paying taxes by reducing the frequency of value added tax filings from monthly to quarterly.

Rwanda’s credit information system improved, as its private credit bureau started to collect and distribute information from utility companies and also started to distribute more than 2 years of historical information. Rwanda made transferring property more expensive, however, by enforcing the checking of the capital gains tax.

“Entrepreneurship is constrained when regulation is too complex or onerous,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. “With their impressive improvements this year, the governments of Sub-Saharan Africa are improving prospects for local businesses.”

For the fourth year in a row, Mauritius was the easiest place in Sub-Saharan Africa for an entrepreneur to do business, with a global rank of 23.

By implementing reforms in areas such as paying taxes, getting credit, starting a business, dealing with construction permits, registering property, and resolving insolvency, São Tomé and Príncipe, Cape Verde, Sierra Leone and Burundi are among the region’s most-improved economies for entrepreneurs.

“Post-conflict economies such as Burundi, Liberia, and Sierra Leone are among those that have implemented broad regulatory reforms,” said Sylvia Solf, lead author of the report. “They demonstrate that despite challenges, economies can move forward to encourage entrepreneurship.”

New data show that improving access to information on business regulations can aid entrepreneurs.

In many Sub-Saharan African economies, getting essential information often requires meeting with an official, demonstrating that improving access to information remains one of the region’s areas for improvement.

Over the past six years, 43 economies in Sub-Saharan Africa have made their regulatory environment more business-friendly.

Recently, steps have also been taken to improve business regulation through regional coordination to overhaul a body of harmonized commercial laws—a legal reform requiring consensus from the 16 member states of the Organization for the Harmonization of Business Law in Africa (OHADA).

From 1st October 2011, the price of petroleum products will cost lower. This follows an announcement by the Ministry of Trade and Commerce.

According to the ministry announcement, Kigali fuel price for super and diesel must not exceed Frw1000 per liter. MINICOM had always attributed the trend to the international oil prices, which are governed by the forces of supply and demand.

The current status of petroleum products has been frw1025per litre in Kigali but some taxi drivers say that in suburbs it costs more .

Pump prices for both petrol and diesel went up by 5%, recording the highest hike in pump prices the country has ever experienced early this year where petrol rose by 5% (Rwf965 to Rwf1,015 per litre) and diesel, 6%(from Rwf958 to Rwf1,015).

This has come again after the pump price for gasoline in Rwanda was last reported at 1.63 in 2010, according to a World Bank report released in 2011. The Pump price for gasoline in Rwanda was reported at 1.37 in 2008, according to the World Bank. Fuel prices refer to the pump prices of the most widely sold grade of gasoline

The Minister of the trade and commerce informs the general public, that the reduction of the pump prices reflects the current dynamics in the international oil prices as observed during the month of September.

Rwanda being the fastest country growing economies in central Africa has recorded sustained and widespread economic growth on the African Continent, a senior official at the World Bank in a report.

90% of Rwandan population is engaged in subsistence agriculture, new industries such as tourism, cut flowers and fish farming have been gaining importance. The major source of foreign trade is coffee, tea, tin cassiterite, wolframite and pyrethrum.

It said in a statement released in May that growth would slow to 7% this year due to the adverse impact of higher food and fuel prices, which would also push the inflation rate to 7.5% by the end of 2011.

Andrew Dukuzumuremyi 32, a Rwandan furniture and interior designer urges youth to save a little they earn for the better future, “Starting out with a solid design isn’t necessary, but neither is tying your shoes after you put them on.”

Andrew Dukuzumuremyi (pictured above) is the proprietor of Malina Interior Sarl. His company deals in home and office furniture’s, carpets, curtains, vertical blinds, cleaning services, construction and general supplies. He says every project has a starting point and desire to see its success.

Dukuzumuremyi started with frw 500,000 however, has accumulated between Frw 20-25 million. He says the most important thing is not money, it’s the mind, even it does not require much time, what matters it how you manage the little time you have got.

Dukuzumuremyi developed interest in decoration at the age of 17 while in Uganda. He lived with his uncle. When he returned Rwanda, he started with hanging and selling curtains and pillows, doing interior designs in rooms and painting homes and the hardest part of the project was to know how to save and invest, he says.

I like modern and beautiful furniture that’s why I got the idea of making L shape sofa affordable compared to other places, the 7 seat of Malina sofa costs almost Frw 700,000, he told Igihe.com

Dukuzumuremyi says his success depends on the trainings he acquired from USA and China for an 8 month period that gave him knowledge of how to find nice fabrics and supply better qualities to Rwandan, he says.

“No matter how you approach the development of your business, there will always be issues to deal with”, Andrew noted.

Malina interior Sarl trust in what they produce and place importance on design which has given the company a strong foundation with a unified goal.

Dukuzumuremyi urges youth to desist from old fashion mindsets and embrace the vision the government wants to put the citizens while creating and innovating.

A study released by the Belgian development agency, BTC shows that Rwanda has a great potential for macadamia production.

The Belgian development agency, BTC, mobilises its resources and its expertise to eliminate poverty in the world.

Introduced in the country in early 1980’s, macadamia had not attracted a big interest from various stakeholders whether public or private sector operators or even international development partners.

According to current findings, estimates are that between 85,000 and 200,000 macadamia trees in Rwanda that produce 700 metric tons of nuts-in shell or the nuts after the husk has been removed annually.

The estimates put the production at about 16,000 metric tons over the next 15 years to generate more than USD 30 million annually by 2020.

Currently, production is largely organized through farmers’ cooperatives.

Furthermore, the data generated by the study, anticipates that production growth calls for the setting up of a primary and secondary processing factory to add value for the local production in order to maximize returns.

However, this fact makes it difficult to have a large body of knowledge about this cash crop especially on diseases and parasites, economic and business opportunities and available transformation technologies.

Commissioned by Kayonza District with support of the Belgian – Rwandese Study Fund, the feasibility Study for Macadamia development and processing in Rwanda, aimed at promoting modern and cost effective technologies to develop macadamia plantations and a processing factory to ensure an export oriented economic growth in the district.

The study also gathered data and information around the country to assess current state of production and project potential growth as well as economic significance of the development of Macadamia as a cash crop in Rwanda.

“The climatic condition in Rwanda is ideal for high quality macadamias and high yields.Trees will produce much nuts for a year from multiple flowerings. This will keep a processing plant operating for longer and give farmers a more consistent income,” The report reads in parts.

“Moreover, the introduction of new and appropriate varieties and a proper post harvest management remain key guarantees for high quality product,” Preliminary findings indicate.