Category: Business

Rwanda will host the 7th Africa Budget Reform Initiative (CABRI) on August 17 at Serena Hotel.

The seminar will bring together senior budget officials from across Africa to share knowledge on common challenges of budget implementation on the continent.

Elias Bayingana, the Director of National Budget in the ministry of finance and economic planning noted that Rwanda was chosen as the host country due to its progress in the implementation of budget.

“The big change has been due to the implementation of the public finance management reform in 2006 which mainstreams gender and ensures that programs are at the grass root level are also financed,” said.

And even though Rwanda has achieved remarkable progress in public finance management in a relatively short period, there are still a number of challenges and this seminar will provide an opportunity for experience sharing among the peers, especially in addressing the difficulties.

“We have a problem of lacking professional personnel but we do our best to improve delivery through conducting capacity building trainings” the director stressed.

Other challenges on the implementation of budget reforms and execution are that: “African public financial management (PFM) systems generally suffer from an implementation deficit; laws and processes may be in place but seldom affect actual behavior,” Matt Andrews had said in last year’s conference in Tunis.

The 7th CABRI Annual Seminar will explore the reasons and identify possible solutions for the implementation deficit.

The focus will be on three implementation challenges in particular, how to create organizational structures that are most conducive to help pubic financial management.

CABRI events provide an opportunity for senior budget officials to connect and exchange experiences and knowledge with their African peers. More than 32 African countries participate regularly in CABRI events.

Rwanda is one of the CABRI founding members and sits on the Management Committee.

By: Andrew Kareba

As East African countries continue to experience abnormal increase in sugar prices, negotiations between Rwanda commerce ministry and Kabuye Sugar factory have finally seen the price off sugar fall from Frw1200 to Frw800 per kilogram.

The price of sugar has now dropped to Rwf 800 a kilo as agreed by Kabuye Sugar works and Champion investment corporation (CHIC) after a severe sugar shortage causing an over 75% increase in the domestic price.

Kabuye Sugar Works (KSW) is not a major player neither in sugar supply nor in sugar pricing as imports overwhelmingly dominate, said Francois Kanimba.

Kanimba further said that, MINICOM keeps an eye on sugar importers and traders to prevent holding the available sugar and hike prices.

The prices have already stabilized from Rwf 1200 to Rwf 800 according to what the business community used to sell Rwf50, 000 a bag but now its Rwf 33, 500, says Mohammed Ntabahejeje the Secretary General of CHIC.

“We are dealing with business community with business license to supply sugar in villages but under conditions” says Ntabahejeje.

The Annual production of sugar by KSW is 10,500 tons a year while domestic consumption increases significantly to 40,000 tons a year and the remaining quantity is imported from EAC countries, says Gohil the General Manager of KSW.

“We don’t access KSW products”, we just see it passing by near our shops and is the cheapest compared to Sukari Halisiya Miwa from Tanzania which costs Rwf 21,000 a bag of 25kg and Lugazi Sugar Corporation from Uganda which costs Rwf 40,500 a bag of 50kg, says one of the retailers who did not want to mention her name.

Theogene Ntabahejeje is a retailer from Nyabihu District says, “We have been working in speculations due to high demand of sugar”.

I make a long journey from the Western Province, the Government and CHIC should offer the retailers purchase more than five bags of 50Kg.Ntabahejeje Says.

Marie Mujawimana works in stationery and has got a big family, says the government has saved my children, I am now happy for the regulation.

Minister said, they sent a waiver request to EAC sector council to import sugar outside EAC and COMESA countries at o% duty for the minimum period of six months as regional industries regain their footing.

The African Development Bank (AFDB) group and its partners have produced two reports showing Africa’s growth potential if the countries formed cross-border ties to deal with traditional and emerging partners like China, India amongst others.

The African Economic Outlook and the African Competitiveness reports are aimed at sensitizing African countries on areas requiring improvement in order to sustain their economies.

However, there challenges affecting the growth like the recent political events in North Africa, high food prices and the hike in fuel prices are likely to slow the continents growth down to 3.7% this year.

Due to the ongoing better performances in some economies, the report predicts that sub-Saharan Africa will grow faster than the North part of the continent at rebound of 5.8% in 2012.

On Rwanda, the report reveals that the country’s economic prospects for the medium term remain positive in spite of some challenges. Yet in the absence of major adverse effects from the global economy, the forecast is a real Gross Domestic Product (GDP) growth rate of 7.0% this year and 6.8 % for next year.

The director of general planning, in the ministry of finance and planning, Leonard Rugwabiza affirmed that the rebound is driven mainly by increased exports, expansion in the growth of services and construction sector.

However, the country’s continued dependence on a few export commodities represents serious constraints and the mobilization of domestic resources to finance investments remains low.

“This is why we need to concentrate more on other sectors like tourism and mining that have more potential’,” he remarked.

AFDB resident representative Negatu Makonnen noted that he was hopeful of the continents economic growth despite a small dip in growth during the global financial crisis.

“Africa staged a quick and strong comeback between 2001 and 2010 growth in averaged GDP of 5.2% annually,” he said.

Nevertheless, Makonnen added that the key challenge for the continent is turning the ongoing recovery into strong sustained and shared growth that will lead to notable improvements in people’s lives.

One of the ingredients is a country’s ability to seize opportunities from the global economy. “African economies must continue developing economic environments that are based on productivity enhancements enabling national economies and ensuring solid economic future.”

This means keeping a clear focus on strengthening the institutional, physical and human capital prerequisites for a strong and competitive private-sector-led development.

In order to achieve this, countries are required to focus in particular on policies and interventions that open up opportunities for entrepreneurship and employment for all members of society.

Governments on the other hand have a role to play especially in creating an enabling environment as well as indentifying and removing obstacles to high potential sectors and industries.

It’s just one week since the International Trade Fair (EXPO) 2011 kicked off varied commodity exhibition, some business participants have expressed dissatisfaction, especially on tax rates.

Exhibitioners who exclusively talked to igihe.com noted that major areas need extensive attention to boost business environment in Rwanda. These include; business communication, customer care services, bureaucracy, friendly customs union staff and high tax fares.

Shelter Msangi of pina Fashon Company from Dar es Salaam, Tanzania noted: “The tax charges here are extremely high as compared to other countries in the region yet even the purchasing power is low.

“I don’t think I can make profitable business in Rwanda with such exorbitant taxes. Yet they are telling us that we are in EAC and instead things are worsening as time goes on.”

Dr. Lucy Samky, Managing Director, Rafiki Herbalist from Arusha-Tanzania said: “If revenue charges are cut down like in other regional countries, then the business environment in Rwanda is the best and this can entice me to start business in Rwanda.

“They should reduce tax charges and train lower cadres on issues of EAC partnership in order to increase business investments.”

Elsie Otieno, Managing Director of Impact Marketing Kenya, a corporate branding company said: “We have partners here and we are soon opening a shop in Kigali and we have already registered it.

“Transportation process has no problem but the problem comes from customs union, right here in Kigali where there is full of bureaucracy.

“We came here for the EXPO but since last week before the show started, our products have been locked at Majerwa and released after three days and this is not doing business at all.
“Tax fares and communication breakdown is really crippling business environment in Rwanda. We told them this is COMESA; our government and COMESA secretariat had already told us that we shall not pay taxes.

“I was forced to pay taxes, yet I am just exposing my locally produced goods and not selling” Otieno laments adding: “Even the tax I paid at first I was told to pay Frw 50.000 another tax officer said it should be Frw 45.000, another tells me Frw 10.000 …and I was really pissed off and since I knew my rights, finally I ended paying Frw5,000” Otieno revealed.

She however, hastened to clarify that such contradicting tax rates by the tax officers is not corruption but called it “communication breakdown” because people are not willing to understand the law imposed by the government.

She said it’s very important for the government of Rwanda to stand up and educate people at the ground level particularly the customs union lower cadres about the East African community partnership first, otherwise doing business in Rwanda is messing up.

A Burundian Entrepreneur who never wanted his names to be published told igihe.com; “We know our rights when we come to Rwanda but it has been violated here particularly in customs union.

“They have to change the system of handling EAC people and know that we are one and therefore, should be given the first priority.”

Jane M Munyao, Chairperson of East Africa Women Entrepreneurs pointed out: “We are all Rwandans because we are in East Africa Community and we share brotherhood, but we are anoyed because when it comes to doing business in Rwanda, the first priority is given to foreigners like those coming from Pakistan and other Asian countries.

“ They shouldn’t charge taxes on goods produced in EAC region like they are doing.”
According to her, all sectors involved in doing business should educate their juniors because they are the major hindrance to the business community and they lack customer care service delivery, they have a lot of bureaucracy.

Andrew Lubaale, Trade Show Coordinator of Madhvani Group said: “Top officials here are very good and welcoming but the biggest challenge upon getting into the country is the poor assistance from lower cadres.

“My personal experience is that I was coming to Rwanda with company’s products and reached at the Rwandan border at 2pm but I left the place at about 5:30pm and from there my truck is again locked up at Majerwa for 3 days.

“Above that they are billing me for all the days it has been there, yet it’s not my mistake and I was really frustrated.

“I also had to pay for the clearing and forwarding company and the amount I paid is now equivalent to the items I brought yet I am just exposing and not selling, is this viable business?

According to Lubaale, the items he brought cost him Uganda Shs 974, 000, paid clearing agency Shs 900, 000, to get the truck out Majerwa cost him Frw11, 000 for packing, transporting back the customs’ agent took him Frw7,000 and renting the stand took him US$1350.

John Tumwesigye, the Marketing Manager, Movit Products based in Uganda observed that: “Rwanda’s doing business should first harmonize tax fares, bureaucracy in custom unions, and train workers about customer service handling because these are the only areas that hinder Rwanda’s business environment otherwise Rwanda is the best country to do business from”

Foreign women investors attending the 14th international Rwanda trade show are angered by the manner with which they are handled at Police checkpoints at Expo grounds which they say amounts to sexual harassment.

However, Police spokesperson, Supt. Theos Badege said: “There is no way to avoid it because when a metal detector makes an alarm while checking a person in some parts of the body, they end up using hands to conduct a thorough search, and this is widely professional for security purposes.”

Exclusively speaking to igihe.com, over 10 foreign females exhibiting their products at Expo grounds raised the same issue saying it is unprofessional and sexually abusive.

An Exhibitor from Kenya who never wanted her names to be published in media noted, “Am really frustrated by the way the police corps are treating us at the entrance.
“How can a young female constable who is supposed to be my granddaughter start touching me all the body including my breasts and private parts? “Is that professional way of checking people? She wondered.

She said, “I like security in Rwanda because it is the first I think in the region, but they should also organize and bring metal detectives and scanners to do it in a professional way because some of us who are coming from different cultures take it as sexual harassment”.

Joyce Waboyi also an exhibitor said, “We want to establish business in Rwanda and open offices in Kigali but I will first find out if this is the way of checking people even elsewhere.

“The way it’s done here is abusive and discourages me because I can’t stand it according to my culture.

A male exhibitor preferring anonymity for personal safety said ,“Rwanda is a country internationally respected and putting up other measures for detectives like detective gadgets and scanners is possible but I don’t know why the equipment are not brought to an international Trade Fair like here.”

The commercial court of Nyarugenge has finally ruled that Rwandatel should liquidate its assets in order to pay debts amounting to US$ 88.9 million.

Creditors have been authorized to submit their claims to the company not later than 4th august.

Richard Mugisha the company’s interim administrator noted that he was optimistic that selling the assets would make the situation better.

Rwandatel assets are valued at approximately US$50 million though the assessment process is still underway. “I believe we have stable equipments which would attract investors speedily,” he remarked.

Once the assessment is complete, the company aims to advertise its assets in August. Mugisha further pointed out that the bid will be open. This means that even local telecommunication companies would be allowed to give their offers.

“We have decided to sell our assets in form of a package which will enable us continue with our day to day activities without any obstruction,” he remarked.

Mugisha advised the court to liquidate the company since in the recent months he has headed the company it has not shown progress of growth.

The liquidation of Rwandatel is in Rwanda’s full compliance with the UN Security Council resolution to freeze assets belonging to Libyas Col. Muammar Gadaffi’s and his cronies’ assets and imposing travel bans.

The luxury laico Hotel in Kigali was also frozen. The hotel will return to its former name Umubano Hotel and Soprotel, a private company will take over the hotel management.

The United Nations Security Council earlier this year unanimously adopted a resolution that could put Muammar Gaddafi and his family in the dock of an international court for crimes against the Libyan people.

In a 15-0 vote, the council ordered all UN member states to freeze the assets of the Libyan leader, his daughter and four of his sons. They and another 10 key members of the regime were banned from travelling outside the country.