Rwanda’s economy maintains 7.4% growth, despite a staggering trade deficit


Rwanda’s economy has maintained a steady growth of 7.4% thanks to a booming service industry which rose by 22.4% from 12.6% in the first quarter.

Central Bank Governor, John Rwangombwa said private sector financing grew by 47.8% from 12.4% of 2013 in the same period.

Central bank Chief Economist, Dr. Thomas Kagabo, attributes said liquidity into commercial banks was a major tool that allowed them to lend more and remain stable.

Meanwhile all construction projects that had been put on complete hold at the end of 2013, have contributed 8%. Manufacturing made a turnover of 13.1%.

Rwanda is experiencing growth while recovering from a meltdown that dragged the economy to 4.7% in 2013 due to earlier financial aid cuts.

Governor Rwangombwa said the growth trend is expected continue despite his earlier projection of a 6% growth.

However, despite the positive growth, Rwanda faces a staggering trade imbalance due to increased imports; valued at 75.4% from 72.5% in the same period in 2013.

Revenues from minerals dropped sharply as a result of a fall in global prices and international blockade of African minerals to global markets.

Revenues from major minerals Coltan, Cassiterite and Wolfram drop by 18.6%. Coltan was slapped the sharpest decline of 30.5%, fetching only $41.7m.

Inflation, despite the 1.9% depreciation of local currency against the dollar remained below 5%.

Agriculture that employs 70% of the population, remains an untapped. Rwangombwa said the sector continues to suffer from minimal financing due to its risky nature.  “There is money but agriculture projects are risky…banks are only interested in bankable projects.”

He said efforts to revamp cooperatives (SACCOs) will help increase financing in the sector, especially in mechanized farming.

Rwanda’s coffee export volumes declined by 31.2% blamed on bad weather in the fourth quarter of 2013 coupled with low levels of stock, 2,560T at the end of 2013 compared to 3,262T during the end of 2012. Tea prices this year dropped from $2.85/Kg in January to $2.12/Kg in June leading to contraction of value of tea exports by 10.2% despite a rise of 5.1% in volume.

The decline in tea prices was attributed to a surge in tea supply at the Mombasa auction in Kenya, where 71% of Rwanda’s tea competed with tens of other tea growing countries.


Source: KT Press

Micro finance banks get Rwf3.4 bn fund to lift performance outlook 

Micro finance banks get Rwf3

Microfinance Institutions-MFIs are likely to see their profit portfolio surge after  the launch of the Microfinance  challenge fund that is worth  over Rwf 3.4 billion( €3 million).

MFIs have been instrumental in lending to low end borrowers mainly in rural areas in sectors such as agriculture, micro and small medium businesses but have been crippled with low levels of liquidity, technical constraints and management issues.

“The fund   has come at the time when we are  trying to help Microfinance institutions solve the challenges that are making them fail, I believe now  they (MFIs) have reason to increase  financial  inclusion for all, “said  Rita Ngarambe, Executive Secretary ,Association of Micro finance Institutions in Rwanda

Ngarambe said that the fund will also support the recent savings campaign the association has been promoting with MFIs to increase liquidity to lend to more prospective borrowers.

The fund is part of the arrangement between the German Development Bank that has been instrumental in supporting MFIs, the government of Rwanda and Access to Finance Rwanda, a move seen to help Rwanda increase access to Finance for all.

“The facility will help professionalize and strengthen the micro finance sector,” said Klaus Muller, an expert at the German Development Bank-Kfw

The   fragile sector according to experts needs   a lot in terms of capacity building, loan assessment and recovery, management and designing of products that are suitable to the sector’s clientele, challenges that haunt these institutions mainly in rural areas.

Accordingly, the six year fund is expected to be disbursed in two phases to Microfinance institutions mainly in rural areas with the emphasis to expanding access to credit for rural folks.

According to Central bank statistics, the banking sector’s new authorized loans in the first five months of this year increased by 46 percent to Rwf269.79 Billion compared to Rwf185.07 billion recorded in the same period of 2013.

The first phase will focus at funding development projects for women and youth, technical support and training for the Institutions and matching grants.

“When you go to see, the fund tackles critical areas which have been a challenge for the institutions,” John Gabo, a microfinance Institutions   consultant   noted

To access the fund, the benefiting microfinance institutions must have the central Bank’s legal status with a loan portfolio worth Rwf1.5 billion and an active clientele of 3000 clients, a requirement believed to help more people access credit.


RRA falls short of set target


Failure of some government institutions to submit tax collections and poor accountability by their budget managers have been noted as the cause of Rwanda Revenue Authority’s failure to achieve the set target for the fiscal year 2013/2014; according to RRA Director General Richard Tusabe.

The tax body recorded Rwf759.8 billion in total tax revenue collection which was short of the targeted Rwf782.5 billion.

The tax body chief attributed this laxity to negligence or corruption tendencies among budget officers.

This was one of the many challenges RRA cited as having a huge blow on their annual tax collections targets during a government officials’ tax dialogue last week in Kigali.

Tusabe told participants that they would remind budget managers of their obligations.

According to the recently-released Auditor General’s report, a total of Rwf2.7 billion deducted in taxes by government agencies was not remitted.

This represents an increase of Rwf2.65 billion compared to Rwf52.3 million registered in the 2012/2013 financial year.

Taxes that were not deducted amounted to Rwf592.1 million compared to Rwf564.6 million over the same period.

DorcelleMukashyaka, RRA deputy commissioner in charge of taxpayer services, said all government budget officers were well aware of their responsibilities, adding that though RRA has carried out numerous trainings for budget managers in government institutions, the problem has persisted.

According to the report, taxes that were deducted, but not remitted to RRA include Pay As You Earn (PAYE) amounting to Rwf2.22 billion, while Rwf214.1 million was not deducted at all.

Value Added Tax totaling Rwf77.2 million was not deducted from suppliers, while Rwf15.4 million was deducted but not remitted to RRA by some entities, it indicated.

About Rwf2.2 million was not deducted as 3 per cent withholding tax from suppliers while Rwf1.9 million was deducted, but not remitted to RRA by some agencies. The total sum of Rwf83.7 million was never deducted as 15 per cent withholding tax from service providers.

“The concerned people should answer why they don’t remit the money because the law clearly states that they should deduct and declare to RRA,” Mukashyaka explained.

Nelson Ogara, a senior manager at PricewaterhouseCoopers Rwanda, said failure to remit the taxes to RRA impacts on the economy.

“If the money supposed to be spent by the government is not collected, this creates avoidable shortfall,” he said.

He added that if the money remains on the government treasury account, it would not be used as required to support Rwanda’s economic growth.

The other challenges facing RRA include resistance to use electronic billing machines and online tax payment facilities, a large informal sector, ‘hard to trace’ cash transactions, smuggling and tax evasion.


Low volumes of trade on local bourse

Low volumes of trade on local bourse

Today on Rwanda stock exchange, the market activity was lower compared to the previous trading session. The total turnover for the day was Rwf 5,364,800 from the Bank Of Kigali counter which recorded 3 transactions of 21,200 shares traded between Rwf 250-254. The Bralirwa counter was quiet.

Bralirwa share price remained unchanged from the last Thursday’s closing price of Rwf 460 and BoK share price closed down Rwf 6 at Rwf 250. KCB shares last transacted at Rwf 185 while NMG and Uchumi Supermarket shares last transacted at Rwf 1,200 and Rwf 175 respectively

Today 18th August, 2014 RSE Equity Market Price list


Security Closing price(Rwf) Previous price(Rwf) Change
BK 250 256 -6
BRALIRWA 460 460 -
KCB 185 185 -
NMG 1,200 1,200 -
USL 175 175 -


Rwanda, EU complete cooperation portfolio review

Delegates of EU and Rwanda at the meeting held this August

Delegates of EU and Rwanda at the meeting held this August

The government of Rwanda and the European Union today, Wednesday, met to review the implementation process of the 10th European Development Fund National Indicative Plan (EDF-NIP) which is under the Cooperation Portfolio Performance Review (CPPR).

The Meeting brought together different government institutions that benefit from the EU funding who assessed progress of implementation, discussed adjustments where necessary, and agreed on the way forward in order to attain the desired (planned) targets.

PPR provides stakeholders the opportunity to identify constraints and opportunities that may have so far affected the implementation of interventions and propose the way forward.

The meeting revealed that the remaining projects under the EDF funding are in the last phases of implementation and will be concluded this year ahead of the commencement of the 11th EDF program funding.

The meeting also presented agreed priorities of the 11th EDF-NIP meant to cover the cooperation from 2014-2020 and current status in terms of its general programing process.

The 11th EDF programming has also been aligned to the Rwanda development strategy (EDPRS2) and Division of Labor.

Currently, 80% of the 10th EDF portfolio (2008-2013) of €429M is provided through sector Budget Support. The meeting stated that this illustrates the trust and excellent relations shared with European Union.

Under the 10th European Development Fund (EDF), the main themes of cooperation are access to basic services, promoting pro-poor growth and rural economic development as well as fostering national reconciliation and justice.

The EU is a leading provider of technical and financial co-operation in Rwanda, with spending, mainly in the form of budget support, averaging some €150 million a year.

Residents call for better banking services

m_Residents call for better banking services

The new BK branch in Muhanga

Residents of Muhanga district have called on officials of Bank of Kigali (BK)-Muhanga branch to fully utilize the teller counters so as to reduce the time spent in queues.

The residents made the call this August 9 during the official inauguration of the Rwf2 billion modern bank structure, located in the heart of Muhanga district, Nyamabuye sector, along the Kigali-Butare highway.

We spend more time in the bank because there are some counters that are not active, and not occupied by a teller. This is our wish as clients so as to enjoy better services in a modern structure” one client Alphonse Gasana said.

However, James Gatera, the Bank of Kigali chief executive officer (CEO) said that this was not true of the bank but it will be considered.

He was optimistic that the new structure will provide customers with services and also introduce new products at the branch, including mobile banking and village outreaches.

The new BK Muhanga Branch was commissioned by Alphonse Munyantwali, the governor of the Southern Province.

Bank of Kigali has about 70 branches across the country and currently the leading financial institution with shares on the Rwanda stock market.



You can now ‘Click’ to get a meal in Rwanda within minutes


What a New Yorker or a Londoner can do, a Rwandan can do.  Well, that sounds overrated, but for many, ordering for, say, a fish smokie and a Pop Cola online, might seem to be a service only found in the West.

But in Kigali, Rwanda’s capital, Hellofood, the German online food delivery marketplace, allows users to order food from over 50 local restaurants around Kigali city through the website or a mobile app.

The German online food delivery marketplace is a member of Africa Internet Holdings Company, of which MTN and Tigo – two of Rwanda’s three telecommunications companies – are also partners.

“Our first meal was delivered last October [2013]”, says 28-year-old Duncan Muchangi, country manager for Hellofood.

Fulgence Muhawenimana is a white-collar professional in Kigali city. With simple clicks on his computer, his favorite delicacy is delivered in minutes.

“It is a good service. It saves my time,” says Muhawenimana, who started using the online food service last month. “All I need is food,” Muhawenimana adds.

Hellofood has a chain of cyclists in different zones around the city who deliver the food to customers. “I can deliver food to five or six people a day”, says Emmanuel Twagirimana, 25, one of the motorcyclists.

Paul Ntaganda, the General Manager of Bourbon Coffee, Rwanda’s luxurious coffee shop, is happy his customers cannot crave for his delicious offers anymore. “At least anyone who loves a Tramezzin from Bourbon Coffee restaurant can get it without coming to the restaurant,” he says.

“We deliver thousands of meals a week”, says Hellofood’s Muchangi. “We have learnt a lot, and we are very happy and comfortable with our service today”, he says.

And food is kept clean, says Muchangi. “The food is well packaged at the restaurant, and there is no contact with the rider”, he says.

Ordering is easy. Users visit, enter their location, then a list of restaurants pops up from which they select their favorite dish; a roast beef sandwich with caramelized onion,achicken sandwich, pan-fried fish with vegetables, a pizza or a local dish such as Ubugali, Sombe, and Matooke

It takes less than 30 minutes to deliver. “When I delay, I don’t charge delivery fees”, says Twagirimana.

Obviously the development has met some customer shocks.  “The first problem we faced was…people were like ‘What? Does it exist here?’”, adds Muchangi.

The service has since received mixed reactions. Some like it, others don’t. 40-year-old Fidel is a banker. He regularly goes out for lunch. But he says even with his busy schedule, “I cannot use it.” “Even if the food is properly packaged, there is always a sense of suspicion.”


But that’s not his main reason he does not embrace the service. “At lunchtime, I also get time to do some exercise and meet up with friends.”

The service is however meeting some challenges. It is forbidden to bring food at work in many workplaces. Staffs are forced to go out and eat from restaurants or at home.

Meanwhile, Hellofood has operations in 50 countries around the world, eleven of them in Africa. The business has a competitive advantage in Rwanda. It is a dynamic and increasingly growing economy with a widening middle class.

But also, growing access to internet and smartphones is facilitating e-commerce. Mobile phone penetration is now 63% up from 53% in 24 months alone, among Rwanda’s eleven million people. Internet penetration has grown from 7.9% to 22% in two years.

And, indeed, the business will not be the only beneficiary. Already more than 20 people have gotten employment. Twagirimana has resigned his job and taken the delivery service offer. “I used to earn about $220 per month, but I now earn more than I used to”, says Twagirimana.

Source : KT Press

SACCOs to Provide Start-up loans to youths

SACCOs to Provide Start-up loans to youths

Savings And Credit Cooperatives (Umurenge SACCOs) will provide credit to youths to procure start up kits that will help them create their own jobs, thanks to the Building an Inclusive Financial Sector in Rwanda- BIFSIR project.

The project under the Ministry of trade and Industry funded by United Nations and the Republic of Korea will provide credit to SACCOs who will lead to over 1,500 youths who dropped out school to start their income generating projects.

“BIFSIR is providing support to the Ministry to scale up SMEs Development initiatives for sustainability,” said Martin Hegenimana, a Ministry official said

Among the supported activities include Apprenticeship training for youth and school drop outs selected from 9 districts (Nyabihu, Kamonyi, Ruhango, Nyamagabe, Rwamagana, Gasabo, Kicukiro and Nyarugenge).

Hegenimana says that the youth are among those who graduated from apprenticeship training programme in different sectors.

“Apprenticeship trainings are administered within a period of six or three months depending on how the program was prepared,” he added

Accordingly, Ministry of Trade will provide Rwf223 million to 32 SACCOs to lend to youths will receive a 50percent grant and 50 percent loan of which loan will be paid on monthly within two years, with a two months grace period

“We are happy  to hear such  news because businesses that  rely on  skills need tools which  some of us youth cannot afford, now with this offer, we can start our own  businesses and fight poverty,” Fred Ntakirutimana, an electrician said

Under the Memorundum of understanding between The Ministry and the SACCOs, the Ministry will Prepare and provide the beneficiary SACCOs with the list of graduate apprentices who will benefit from equipment loan.

Again, it also provide business advisory services to the youth who will benefit from loans including training them in basic entrepreneurship skills, follow-up as well as sensitizing them to work together through groups.

While SACCOs on the other hand will Facilitate the youth to open an account in SACCO that will be used to apply for loan as well as receive project applications for loans and analyse them using the normal credit analysis procedures based on normal prudential guidelines by Central Bank.

We will also require a monthly list of youth who benefited from tool kit loans,” he said adding that this will help keep proper track of the process in the loan disbursements by SACCOs.

This according to experts will be another step in curbing youth unemployment, one of the key strategies the country banks on to leapfrog the economy into middle income ($1240 GDP per capita) by 2020.

“Government has put many efforts in promoting employable skills among the youth but one challenge has been access to credit to make their dream projects practical,”said Festo Ngamije, a consultant in economics.

Financial institutions have been on an uphill task to provide loans to youth who according to them (insititutions) lack basic requirements to access credit such as sound business plans and collaraterals and skills to make their projects profitable.

Under the Economic Development and Poverty Reduction Strategy-EDPRS II, the government seeks to empower the youth with employable skills to boost their ability to create jobs to achieve the government’s ambitious target of creating 200,000 off-farm jobs every year.

MINICOM looks to building a strong financial sector

Rwanda’s Minister for Trade and Industry, Francois Kanimba

Rwanda’s Minister for Trade and Industry, Francois Kanimba

The ministry of trade and industry (MINICOM) has signed a loan facilitation agreement with three ‘Savings And Credit Co-operatives’ (Saccos) in a bid to build an inclusive financial sector in Rwanda (BIFSIR).

The apprenticeship program is in the framework of promoting self-employment and job creation to school dropouts by focusing on short training and giving them hands on practical skills as a way of enabling them set up own businesses.

“The aim of the program is to enable self-sustainability and financial empowerment of the youth that are the majority in this country,” said Martin Hagenimana the head of youth development and single project implementation unit in Minicom

The loan facilitation follows a grant agreement between the ministry of finance and economic planning (MINECOFIN), MINICOM and UNDP signed at the beginning of the year to scale up SME’s development initiatives for sustainability.

Individual loans shall not exceed 200,000 francs while a cooperative can receive a maximum of 2 million francs.

Nine districts will be the initial beneficiaries of this ongoing apprenticeship with over 1000 young Rwandans set to benefit from training and credit facilitation.

Per the grant agreement signed between MINECOFIN and Minicom, the project loan and agreement will facilitate graduate apprentices to acquire loans for startup kits that are in the module of fifty percent grant and fifty percent loan.

SACCOs will be responsible for the credit recovery basing on their credit policy that is line with that of the National Bank of Rwanda (BNR).


Rwanda bourse turnover at Rwf25M

Rwanda bourse turnover at Rwf25M

As of closure of trading on the Rwanda stock exchange on Thursday, Rwanda Stock Exchange had recorded a total turnover of   Rwf25 million from 55,100 shares all from Bralirwa that were traded in seven deals.

The transactions were between   Rwf459rw and Rwf460 and closed at Rwf460. The day’s trade was a decline from the previous 45 million francs made from the day before that had been affected mainly due to a drop in Bralirwa and Bank of Kigali share prices, as well as a decrease in Bralirwa’s traded volumes, according to RSE market report.

The drops affected the Rwanda Share Index, which shed 0.67 points to close at 262.77 points compared to 263.44 points on Tuesday.

Bralirwa traded 92,800 shares yesterday compared to 161,300 shares that exchanged hands on Tuesday.  Bank of Kigali traded 20,100 shares, an increase from 4,300 shares sold the previous day.

As of Thursday, Bank of Kigali, Kenya Commercial Bank, Nation Media Group and USL shares last transacted at Fwf285, Fwf185, Frw1, 200 and 175 respectively.


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