Category: Business

Termed by some as overly ambitious, the Kigali City Master Plan (KMP) continues to forge ahead in its quest to successfully develop sustainable approaches to urbanization.

Kigali authorities believe its city master plan is an articulated vision for the city’s future and are currently inviting investors to be part of this dynamic journey.

The Rwanda Social Security Board in partnership with the Rwanda Development Board, the Ministry of Infrastructure and the Kigali City Council are now unveiling for sale, 9 prime property plots, located in the Rwandan capital, Kigali.

Known as the Rugenge Plots, this property is part of Phase 1 of Kigali’s Central Business District (CBD1).

The new Kigali CBD Core is a signature of the latest development in Kigali and expected to be the future financial hub of Rwanda and the region, with national and international financial institution headquarters.

Kigali city features over 730 square kilometres of hills and valleys, and is rapidly opening up itself as a premier destination for real estate investment.

The Rugenge Plots were initially 20, of which 11 have been sold and three have been fully developed with high-rise mixed use for commercial and apartment buildings.

Developed sites include the Rwanda Social Security Board building, which consists of a impressive 14 story commercial and residential building; the RSSB commercial high rise with approximately 13,000 sq m, and the Habeli Building, a retail and office structure of seven stories.

Infrastructure to be made available at the Rugenge Plots will consist of water and electricity services, sewage treatment as well as communication systems through the use of fibre optic cables.

With regard to specifications, Permissible Land Use includes commercial use on the first floors or first two floors and residential use above the first floor. Conditional Land Use includes public facilities; hotels; service apartments and Petrol stations.

Currently, Kigali measures 731 square kilometres with a population of about 1.3 million and a household size of 4.8 million. It is believed that the city population will more than double to 2.9 million by 2025 and most likely five million in long term.

About 17 % of the city is currently urban land, while 50 percent is used for agriculture while the rest is preserved for nature.

According to the RSSB Director General Angelique Kantengwa, the sale of the Rugenge Plots in the CBD1 are “also targeting local investors who can group themselves to buy these plots. With the condominium law, an individual can own part of a building”

As Africa’s infrastructure development to the private sector catalyse economic growth and attract substantial foreign direct investment, the founder of Africa’s largest private equity firm said yesterday at the World Economic Forum on Africa 2012 in Addis Ababa, Ethiopia.

“Africa today is where China was 30 years ago. It is a continent of 1 billion consumers, with the right demographics and abundant natural resources. Governance in Africa has been the catalyst of the positive change in investor interest,” said Ahmed Heikal, Chairman and Founder of Citadel Capital, the leading private equity firm in Africa and the Middle East with US$ 9.5 billion in investments under control.

“Africa’s share of global FDI remains small at 4.35% of global activity. The infrastructure investments necessary to support what will become the world’s largest workforce by 2040 will see this figure climb substantially in the years ahead. Economists have demonstrated that over the last 30 years, infrastructure investments accelerated the annual growth convergence rate by over 13 percent in Africa.

This has attracted foreign investment that has helped create 1.6 million new jobs in Africa in the last eight years alone,” Heikal said at a discussion entitled ‘Accelerating Infrastructure Investments.’

He added, “Infrastructure spending in Africa currently clocks in at just over US$ 45 billion a year against needs of more than US$ 93 billion. Scaling private investment in regional infrastructure projects will help in facilitate trade and transport across national boundaries, create integrated energy markets, particularly power pools, support regional water resources management and spark national economic growth.”

Across Africa, lack of investment in rail infrastructure means that transport costs are higher than anywhere else in the world. As a result, the cost of overland transport stands at as much as 50% of the sales price of goods in landlocked countries such as Uganda, Rwanda and Malawi.

Citadel Capital estimates that an efficient rail network could, in time, bring East African transport costs down by as much as 35% due to the operational and fuel efficiency of shipping by rail.

“The result of under-investment in infrastructure is clear across Africa: Hundreds of millions of citizens and businesses do not have reliable access to electricity. Our road, rail and port infrastructure is not a continent-wide network, but a patchwork of isolated national and sub-regional assets.

Intra-regional trade stands at just 9% of total trade in Africa versus nearly 50% in emerging Asia, and our global exports lag far behind our potential,” Heikal said.

He pointed out that despite this stark brake on growth, six of the ten fastest growing economies in the world in the 10 years to 2010 were in Africa, and seven of the ten fastest growing in the period 2011-15 will be on this continent.

He referenced IFC’s recent comments that 21 African nations were home to investable private equity opportunities in 2011 versus just one — South Africa — a decade ago.

“Our infrastructure investments are about creating solutions,” Heikal pointed out. “They are revitalizing the national railway of Kenya and Uganda. They are eliminating Egypt’s reliance on diesel imports while simultaneously preventing the release of nearly 180,000 tons of sulfur dioxide each year.

They are easing road congestion and reducing emissions by shifting transport off highways and onto un-used water ways and railways as part of a network that will link the Mediterranean port of Alexandria with the port of Mombasa.

They are ensuring food security in South Sudan and Sudan. They are distributing natural gas and electricity to households and industry alike. They are turning waste into energy for industry. These are textbook examples of how private equity can both catalyze growth and help meet the aspirations of more than 1 billion Africans.”

Citadel Capital raised equity and debt of nearly three quarters of a billion dollars in 2011 for its 19-platform companies. The lion’s share of this sum was raised from leading international institutional investors for investment in African infrastructure, including US$ 234 million in equity and debt raised for Rift Valley Railways (RVR), the national railway of Kenya and Uganda, as well as additional sums committed to Nile Logistics, the Egyptian Refining Company and solid-waste platform Tawazon.

Two rounds of investment for RVR in 2011 helped Kenya close the year atop Deloitte’s league table of top destinations for private equity investment in East Africa.

A private-sector led approach to structuring infrastructure investments, the Citadel Capital Chairman emphasised, provides governments with a unique opportunity to both revitalize existing assets and build new infrastructure.

Citadel Capital was recently named the largest private equity firm in Africa by Private Equity International in its PEI 300, the annual benchmark ranking of global private equity firms, marking the fourth consecutive year that the firm has been named the largest in Africa.

MTN Rwanda and MFS Africa today announced the launch of an online money transfer service that enables MTN Mobile Money customers to receive international remittances directly on their mobile phones.

The service referred to as MTNMMO.COM is an online facility that enables MTN Mobile Money customers in Rwanda to receive international remittances directly on their mobile phones from senders in the Diaspora.

MTN Rwanda is among the first MTN operations to connect to this service. The service is also being rolled out across multiple MTN Mobile Money countries currently including Cote d’Ivoire. Other MTN Mobile Money operations including Cameroon and Ghana will join the service during the year,

How does ‘MTNMMO.COM’ work?

Senders from outside Rwanda can register on the website MTNMMO.COM and send funds from their debit card or bank transfer via the internet to Rwanda by simply entering a beneficiary’s mobile phone number.

Funds are delivered immediately to the beneficiary’s Mobile Money account in Rwanda at attractive price levels. While Mobile Money customers today can already send and receive money from within Rwanda, the MTNMMO.COM service for the first time enables cross-border transfers into MTN Rwanda.

The ‘MTNMMO.COM’ service in Rwanda is facilitated by MFS Africa, in partnership with BCR (Banque Commerciale du Rwanda Ltd).

According to Albert Kinuma, Head of MTN Business, “Making the connection to MTNMMO.COM to enable international remittances together with MFS Africa was high priority for us to better serve our customers, understanding their need to use their Mobile Money accounts to receive money from abroad.

We are thankful to the Central Bank of Rwanda for allowing us to launch this groundbreaking service for the benefit of the Rwanda population.”

“We will continue to add new services to MTN Mobile Money, and grow our agent network, now standing at over 700 agents across Rwanda. With MFS Africa as a partner, we look forward to introducing additional products to Mobile Money in the near future, he added.

Auke Algera, the General Manager East Africa at MFS Africa said MTNMMO.COM is the first product being launched in Rwanda by the company.

“The service extends the benefits of Mobile Money to the Rwandan Diaspora. Long travelling times and uncompetitive remittance costs are now a thing of the past. We established ourselves in Rwanda because we are committed to deploying a range of innovative financial products for mobile money providers in the region,” Algera said.

Rwanda will by 2016 have sufficient rice locally produced and this will put an end to importing rice from neighbouring countries.
About 35% of rice consumed in Rwanda is imported from neighbouring countries.

Rice prices continue to rise making it unaffordable to the local population.

The lowest quality rice known as ‘Kigori’on the local rwanda market is produced locally. It costs about Frw 600 per Kilogram. Imported High quality rice costs about Frw 20000 for a bag of 25kilograms.

The ministry of agriculture has in the last three years established mega rice processing factories in the country especially one at Ntende, Ndatemwa in Gatsibo district which was recently visited by President Paul Kagame.

Hundreds of hectares of mashlands have been carefully ploughed in Eastern Province to pave way for increased rice production capable of satisfying the local market.

The permanent secretary in the ministry of agriculture says that more hectares of mash lands will be cultivated to increase rice production to cater for the large local demand for rice.

However, upland rice has not been adopted. Rice farming is still conducted in low lying marsh lands. Neighbouring Uganda has in the past five years embraced upland rice farming which rapidly increased rice supply to the local Uganda market and export to neighbouring countries like Rwanda and DRC.

According to the ministry of agriculture, rice in rwanda is currently grown on 15000 Hectares of land but reclaimed marsh lands total 22000Hectares.

Government targets to increase acreage upto 35000 Hactres by 2017.

Today the RSE market recorded a lower turnover compared to last Friday’s trading session.

The total turnover for the day was Rwf 14,194,600 from 200 BK shares and 40,800 BRALIRWA shares traded in 3 deals compared to last Friday’s trading session which recorded a turnover of Rwf 402,268,300 from 3,218,000 BK shares and 2,000 BRALIRWA shares traded in 22 deals.

Bralirwa shares traded at Rwf 350 and 346 then closed at Rwf 346, registering an increase of Rwf 4 compared to last Friday’s closing price while BK shares traded and closed at Rwf 125, unchanged from last Friday’s closing price.

KCB and NMG shares last transacted at Rwf 135 and Rwf 1,200 respectively.

At the end of formal trading hours, there were outstanding offers of 220,900 BK shares at Rwf 125 and no outstanding bid.

On BRALIRWA counter, there were outstanding Bids of 193,100 shares between Rwf 326 and 345 and outstanding offers of 64,500 shares at Rwf 350.

In the mean time, Bralirwa ltd. has announced a final and last dividend of Rwf 16.90 per share to be paid on June 29th, 2012 subject to the AGM approval that will take place on June 12th, 2012.

The book closure date will be June 8th, 2012

Countries across Africa should boost job creation and help young people acquire new skills, according to the African Economic Outlook 2012 -the number of youths in Africa set to double by 2045.

“Creating productive employment for Africa’s rapidly growing young population is an immense challenge but also the key to future prosperity”, say the authors in the foreword.

Co-written by the African Development Bank, the OECD Development Centre, the United Nations Economic Commission for Africa (UNECA) and the UN Development Programme (UNDP), the report says youth are an opportunity for future economic growth.

Between 2000 and 2008, despite world-topping economic growth rates, and a better educated youth, Africa created only 16 million jobs for young people aged between 15 and 24.

Today, youth represent 60 percent of the continent’s unemployed, and of these 40 million youths, 22 million have given up on finding a job, many of them women.

“The continent is experiencing jobless growth”, said Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank (AfDB). “That is an unacceptable reality on a continent with such an impressive pool of youth, talent and creativity”.

The report argues youth unemployment figures will increase unless Africa moves swiftly to make youth employment a priority, turning its human capital into economic opportunity.

Youths can present a significant threat to social cohesion and political stability if they do not secure decent living conditions.

High growth alone is not sufficient to guarantee productive employment. Youth employment is largely a problem of quality in low-income countries and one of quantity in middle-income countries, the report says.

“In low-income countries, most young people work but are poor nevertheless. In African middle-income countries, on the other hand, such as South Africa or the Northern African countries, despite better education, more youth are inactive than working”, said Mario Pezzini, Director at the OECD Development Centre.

The report recommends that African countries design better coordinated strategies to effectively tackle youth employment, focusing on job creation in the private sector while providing the right conditions for businesses of all sizes to grow and expand their work force.

In addition, given the small size of the formal sector in many African countries, the report finds that a government focus on the informal sector and rural areas, which contain immense entrepreneurial talent, can serve as engines for inclusive growth since they can absorb higher numbers of unemployed youths.

It also advocates for policies focused on creating the skills that are necessary for youths to compete in the job market, for instance by improving the quality of education in agriculture and new technologies.

Increased policy focus on youth employment must be coupled with measures to boost investments in social and economic infrastructure and diversify the continent’s economy.

“Export diversification beyond raw material and private sector development are important to mitigate the continent’s susceptibility to external shocks, but that takes time”, said Emmanuel Nnadozie, Director of Economic Development at UNECA.

With the right policies in place, the continent could capitalize on its recent economic growth to achieve a development breakthrough.

“Youth employment is an investment in the future. It contributes to reducing poverty, wealth creation, well-being and social cohesion,” said Pedro Conceição, Chief Economist at UNDP’s Regional Bureau for Africa.

The African Economic Outlook presents a comprehensive analysis of the economic, social and political developments in the region. The report includes in-depth country notes on 53 of the continent’s 54 economies, a macroeconomic overview.

The document also offers a chapter on human development which focuses this year on the importance of reversing capital flight to achieve sustainable human development.

The Chairperson of the African Union Commission Jean Ping has noted that Africa’s free trade zone is expected to become operational by the end of 2017 through the merger of all African regional trade blocks.

“The heads of the states and government have committed to the realisation of a continent wide free trade zone.”

Ping said in a speech read on his behalf by the AU Commission Chairperson Special Representative to Somalia Boubacar Diarra during the commemoration of the 49th anniversary of the Africa Day on Friday.

The day celebrates the day that the Organisation of African Unity that transformed to the African Union in 2002 was founded.

Rwanda has sealed a deal to supply over 20,000 Metric tones of Maize to the World Food Program.

On Tuesday the Ministry of Agriculture signed a Memorandum of Understanding with the World Food Program (WFP) formalising intention of the WFP to buy from Rwanda up to 20,000 MT of maize and up to 10,000 MT of beans during 2012.

The MoU also lays out the possibility of increasing purchases up to 100,000 MT of maize and 50,000 MT of beans by June 2015.

The deal is the second of its kind in Sub-Saharan Africa, with WFP having a similar agreement with Tanzania.

WFP Deputy Country Director Jan Delbaere said that Rwanda was chosen because of “the success of the crop intensification program.”

Delbaere commented, “It’s a market decision because the conditions are right and the Purchase for Progress program is performing very well here in Rwanda.”

The Purchase for Progress Program is another WFP initiative that has been backed by the Ministry of Agriculture and works to ensure fair prices for farmers.

This agreement with MINAGRI will help to stock the WFP’s FPF Facility which is a facility set up to have stock of cereal and legumes so that it can be easily available in case of crisis.

Permanent Secretary Ernest Ruzindaza, who signed the MoU on behalf of MINAGRI noted, “This is a beneficial partnership because it ensures a market for our farmers.”

Investiment promotion Agencies are reportedly less responsive to direct investor Inquiries than they were three years ago even as countries compete to attract investments.

“Skilled investment promotion agencies can give economies a competitive advantage by helping investors choose a suitable location and set up operations that create jobs and promote growth.”

According to the World Bank Group’s Global Investment Promotion Best Practices 2012 report, 80% of national investment promotion agencies are failing to respond to investor inquiries in the key sectors of agribusiness and tourism.

The report assesed 189 economies’ responsiveness to investors. It found that that investment promotion agencies are less responsive to direct investor inquiries than they were three years ago.

In the areas of inquiry-handling and website performance over the past two years, two regions showed improvement—the Middle East and North Africa, and Latin America and the Caribbean.

“In difficult times, governments may be tempted to cut funding for investment promotion. However, this can cost them opportunities to secure investments and jobs,” said Pierre Guislain, Director of the Bank Group’s Investment Climate Department.

The report shows that limited resources need not be an obstacle to effectiveness.

The report was produced by the Investment Climate Department of the World Bank Group (which includes IFC, MIGA, and the World Bank) and sponsored by ProInvest, a European Commission partnership program for the countries of Africa, the Caribbean, and the Pacific, and by the government of Spain.

The Ministry of Finance and Economic Planning presented an outline of the analysis of the preliminary draft budget of the National 2012-2013 fiscal year.

Appearing Tuesday before a parliamentary committee responsible for budget and finance management, John Rwangombwa said the budget is estimated at Frw1000,374,400,000.

Rwangombwa explained the source of funding will be drawn from taxes collected from foreign grants and credits, tourism and others.

In the first draft of the national budget 2012/2013, it is expected that revenue from taxes will be approximately $ 600 billion.

The draft national budget, fiscal year 2012-2013 has generally increased from 182 billion from the budget for the year ending.

Rwangombwa also explained how the budget was allocated, noting that this distribution was made on the basis of priority.

He indicated that the budget items concerning in particular the acquisition of office equipment of public institutions and the central administration and travel expenses and training have been revised downwards.