Category: Business

Rwanda plans to start drilling exploratory geothermal wells in an area that may have at least 700 megawatts of steam power, following in the footsteps of neighboring Kenya, Energy Minister Coletha Ruhamya said.

Rwanda lies within the same Great Rift Valley fault system as Kenya, where shifting tectonic plates provide sizeable reserves of geothermal energy. Kenya, Africa’s biggest geothermal power producer, estimates the extent of its untapped power resources at as much as 10,000 megawatts, enough to meet its own electricity needs and export the surplus.

“Geothermal is the area that the government of Rwanda wants to prioritize,” Ruhamya said, according to a statement e- mailed from the Nairobi-based Geothermal Development Co. today. “Since Kenya has progressed far in the area, we are looking for collaboration and partnership in capacity building, drilling and putting plants in place.”

Ruhamya made the comments in a meeting yesterday with her Kenyan counterpart Kiraitu Murungi, according to the statement. She didn’t say when drilling may start. The New Times newspaper reported on March 10 that the country would start digging wells in August, citing Ruhamya.

Experts from Kenya’s state-run Geothermal Development Co. are currently training 12 Rwandese students on how geothermal technology works, today’s statement said.

Investigations into Rwanda’s geothermal potential began in 1982 with the north-western Volcanoes National Park and areas around Lake Kivu identified as possible sites, according to the energy ministry’s website.

Last month, three Rwandan owners, graduates of the three-year BPeace program, visited the United States during a trip that paired them with American businesses in their industries. The participants included Languida Nyirababeruka, who founded Pompe Funebre Twifatanye, a funeral home, after the 1994 genocide.

Ms. Nyirababeruka, a former teacher who lost her job for political reasons, ran a tailoring business before 1994. The genocide claimed her husband and several family members, as well as her home and business. When it was over, she had to locate her three children, now in their 20s. “After the genocide, I started from scratch,” she said, speaking through an interpreter. A United Nations contact helped Ms. Nyirababeruka get a job as a cook, and she began to rebuild her life in Kigali.

The idea of opening a funeral home took shape after Ms. Nyirababeruka spent an exhausting day helping a friend plan a funeral. At the time, there was no one business that provided all funeral-related items and services, like coffins, transportation and flowers. Ms. Nyirababeruka said her friend was forced to “run around, buying things here and there.”

When Ms. Nyirababeruka opened Pompe Funebre Twifatanye in 2003, her friends and neighbors were uncomfortable with the concept of a business that profited from death. Now, many have become her customers, and she has two competitors. “She’s changing their culture,” said Craig Baker, a BPeace mentor who works at Brady Funeral Home in Danville, Pa., which was the host of Ms. Nyirababeruka for part of her stay. Mr. Baker met Ms. Nyirababeruka two years ago when he traveled to Rwanda to share his expertise.

Today, Ms. Nyirababeruka employs 10 people, including a recently hired carpenter who makes the coffins that she previously outsourced. Her business, which supports her family, had 2009 revenue of $26,435. Though she said that owning a business places her in Rwanda’s growing middle class, Ms. Nyirababeruka said her company must become more profitable.

She looked forward to learning from her counterparts in the United States. After leaving Pennsylvania, Ms. Nyirababeruka visited Cobble Hill Chapels in Brooklyn. Brady Funeral Home and Cobble Hill Chapels shared best practices and arranged field trips to the businesses that service the industry, including florists, cemeteries, headstone makers and a morgue.

During a meeting with the staff at Cobble Hill, Ms. Nyirababeruka admitted she often reduces her prices out of sympathy for grieving families and then regrets it. Although fixed prices are virtually unknown in Rwanda, Ms. Nyirababeruka vowed to establish them for her services and to make no exceptions. She was intrigued to learn that many American funeral homes offer interest-bearing accounts that make it easier for families to save for future funeral costs. Back in Rwanda, she plans to educate people to prepare for funeral expenses and to increase her chances of collecting them.

At Cobble Hill, Ms. Nyirababeruka also learned about potential add-on products and services that could boost her profits, like rosary beads and casket engraving. While some practices (like embalming) would be too costly for her to implement now, she learned how to create printed extras, like prayer cards, using a computer. She left Cobble Hill with shopping bag full of samples, including thank-you notes and a guest book.

Ms. Nyirababeruka hopes one day to pass her business on to her children. She is thinking about sending her son to a funeral services program that Mr. Baker attended in Pennsylvania and that they visited during her trip. Most of all, she said, she hoped her children will struggle less than she had.

Growth in Rwanda’s agricultural output is seen slowing to 6 percent in 2011 from 7.1 percent last year due to a drought late in 2010, agriculture minister Agnes Kalibata has said.

The country has invested in new agricultural production to raise food and export output, with agriculture a mainstay of recent economic growth.

“Agriculture growth this year will not be as good as the previous year’s because of a drought at the end of last year, so we expect around 6 percent growth,” Kalibata said during a rural poverty conference.

“Next year we go back to our original plan, 8 percent growth,” she added.

Kalibata said increased agriculture investment would pave the way for Rwanda to reduce its dependence on two of its main imported crops — rice and wheat.

“We are investing very strongly in irrigation systems that will see (rice) imports going down in the next three years,” she said.

“We will probably be importing about 10 percent from 40 percent now by 2014. In wheat we also have investments coming in that indicate… we could produce in the next two-to-three years about 50 percent of what we consume in the country,” Kalibata added.

Rwanda currently produces 60 percent of the rice it consumes, importing the shortfall, while it imports about 60 percent of its wheat needs.

She said the country of about 11 million people did not have any food security fears, although the rising global cost of fuel and food prices could impact domestic inflation.

“Inflation is going up because some imported commodities are going up because fuel is influencing them,” Kalibata said.

The Ministry of Trade and Industry in conjunction with the Private Sector Federation has produced an assessment on the status of Non- Tariff Barriers (NTBs) in the region, which shows that removal of NTBs especially along the Northern and Central Corridors are taking slow progress.

However, in the northern corridor, progress has been recorded at border posts, which are no longer highlighted as a major barrier by truck drivers. This has likely been the result of introducing One-Stop Border Posts and 24hour 7day operations which avoid duplication of clearance procedures as well as reducing congestion and overnight delays.

 The report suggests that focused attention must be made to other persistent NTBs and not focused solely at improving border procedures. Weighbridges, for instance, remain a cumbersome, time-consuming process that nearly always results in hefty bribes being paid. Corruption also remains a real concern for firms, who face a significant addition to transportation costs as a result. Other NTBs identified suggest that the harmonisation and revision of tonnage regulations in particular must be considered by Kenya and Uganda in the near future.

Whilst notable progress has been made by the Mombasa port in introducing measures to improve and expedite clearance of cargo such as 24hour 7days operations and a One- Stop Centre for key procedures, consultations with the private sector indicate that Rwandan exporters are still not experiencing the large improvements purported by officials. It still takes two weeks for Rwandan cargo to clear, with local shipments often clearing much quicker.

 Traders along the Central Corridor face similar problems but suffer to a much lesser extent from extortionate corruption than the Northern Corridor, with total bribery payments estimated at around US$20. Yet, significant NTBs exist along the route and have, in some cases, worsened since Rwanda’s Private Sector Federation conducted its baseline study in 2008. Particularly of note is the increase in the number of weighbridges encountered in Tanzania from five in 2008 to the eight currently observed.

This is seen as a contradiction in respect to an agreement by Partner States aimed to eliminate NTBs and refrain from introducing additional ones. The increased time added to journeys is a significant cost to importers and exporters. Customs checks and police roadblocks are also an unwarranted hindrance.

The Border Post at Rusumo, for instance, lags behind than other Border Posts in the region and is particularly poorly equipped and closes as early as 6pm due to the reliance on solar power. Additional NTBs, such as, time sheets and transit licenses further complicate the journey, and the risk of highway robbery is such that many drivers refuse to continue driving at night due to risk of theft.

Dar es Salaam port has made some improvements in introducing competition to container management. However, customs procedures remain lengthy and the modernisation and automating of operations needs to be increased to ensure cargo clearance is expedited. Capacity is still limited in dealing with the demand for cargo handling facilities.

Concerning the Bujumbura route, there are very few Rwandan trucks that travel to Burundi. Clearance on the Rwanda-Burundi Kanyaru Border Post does not take long, and the Gasenyi Border operates a ‘One Stop Border Post’ and the result is relatively quick. Nevertheless, the infrastructure at the port is still minimal. The port is rarely congested, mainly as a result of low demand. The Port has a capacity of 500,000 tones but the port does not handle even half of that. While driving along the Kigali- Bujumbura road, there are no roadblocks ; customs check points or weighbridges identified.