News Categories: Rwanda News

Reforms, tech key growth drivers in sub-Sahara Africa

Growing momentum behind regional integration, economic reforms, technological advances and infrastructure development are among the key factors fuelling business growth in sub-Sahara Africa, said a new whitepaper released by Dubai Chamber of Commerce and Industry in cooperation with the Economist Intelligence Unit (EIU). The report, entitled “Promise and Perils: Scaling up businesses in sub-Sahara Africa”, was issued ahead of GBF Africa 2019 in Dubai. The findings shed light on the current business climate in sub-Sahara Africa and examined attractive business prospects offering the most potential for investors in the UAE and wider GCC region. Key growth drivers The report highlighted the importance of regional integration initiatives such as the East Africa Economic Community, Single African Air Transport Market and African Continental Free Trade Area (AfCFTA) in removing trade barriers and driving business exchange. The AfCFTA is expected to liberalising trade and investment policies and ease easing operational challenges related to international money transfers and payments. Combined, these allow African SMEs to expand operations across markets, creating attractive opportunities for investors too. Expanding telecommunications networks are facilitating the growth of internet connectivity, mobile money and new digital services that build on it. Mobile money, which facilitates money transfers and payments, is also a growth enabler as it moves into business lending. Improved internet connectivity is expected to drive the next wave of technological innovation, enabling companies to develop new, digital services for consumers on the continent. By 2025, 3G mobile network coverage is expected to account for 60% of the mobile...

Non-traditional exports buoy international trade

Non-traditional exports such as fortified foods and cement have buoyed Rwanda’s international trade at a time when international commodity prices remain unstable globally. Previously, traditional exports such as coffee, tea and mineral were the most dominant. However, the global commodity prices in the international market have affected prices of the goods. Central Bank Governor, John Rwangombwa, said that non-traditional exports had played a significant role in driving up exports.  In the first 9 months of 2019, exports grew by 3.9 per cent. The non-traditional exports include fortified foods, food products, cement as well as re-exports of machinery and fuel. “We saw lots of exports to Uganda and South Sudan mainly fortified foods with a positive impact on non-traditional exports. We also see exports of cement to Congo. There were re-exports of machinery and vehicles to Congo and Burundi.  As well as fuel re-exports,” the Governor said. The exports of cement by Cimerwa despite the fact that Rwanda still imports cement can be explained as an attempt to create links and entry into the Congo market as they work to increase their production capacity. Imports into Rwanda grew in the first 9 months of 2019 by 14.6 per cent which increased the trade deficit which is at 24.2 per cent. A significant portion of imports into the country are capital and intermediary which are used for production, Central Bank statistics show. Thomas Kigabo the Chief Economist at the Central Bank said that 30 per cent of the total imports were capital...

East African countries turn to neighbours for more trade

The value of intra-trade among East African Community partner states increased to $5.98 billion in 2018 from $5.46 billion in 2017, accounting for a 9.4 per cent growth. This comes as member countries opted to trade with each other in the wake of falling demand for the region’s agricultural products in the US and the rest of the world. The East African Community Trade and Investment Report (2018) shows that all EAC member states save for Burundi recorded growth in trade with their regional counterparts. The report prepared by the EAC Secretariat shows that Uganda, Tanzania, Rwanda, South Sudan and Kenya’s combined exports to the EAC and Southern African Development Community regions amounted to $3.1 billion and $1.9 billion in 2018 respectively. This shows, however, the growth in intra-EAC trade slowed down to 9.4 per cent last year compared with 24.8 per cent in 2017. The positive trend signals the importance of intra-EAC trade that has been stifled by persistent trade disputes on rules of origin, non-tariff barriers, inadequate value addition to the agricultural sector and competition from other producers and regional blocs that benefit from export subsidies. In 2015 and 2016, intra-EAC trade was in the negative territory. Burundi’s total trade with other EAC partner states fell by 11 per cent to $150.9 million in 2018, from $162.6 million in 2017. Kenya’s total trade with EAC partner states increased by 4.7 per cent to $1.95 billion in 2018 from $1.86 billion in 2017, mainly on account of increased total trade...

$600,000 injected in digitalizing licensing and inspection services

Rwanda Utilities Regulatory Authority (RURA) together with Trademark East Africa (TMA) have put pen to paper on a $600,000 deal to facilitate the digitalization of major processes which will greatly improve ability to provide services to traders as well as monitor and enforce compliance to standards on selected imports. This was Wednesday afternoon at the RURA Headquarters in Kigali. The funding has been provided by the United Kingdom’s Department for International Development (DFID) through Trademark East Africa (TMA). This funding to RURA is part of TMA’s $57 million programme with the Government of Rwanda that was launched the previous year and it is within this that TMA works with different Rwandan Ministries, Departments and Agencies, the Private sector as well as Civil Society Organisations to support hard and soft infrastructural interventions that reduce cost of doing business improve efficiency of key trade processes. It also aims at building capacity of local industries to produce and/or manufacture world class standard goods and build linkages to markets. Particularly, the fund will go towards supporting the adoption of Converged Licensing Management Systems that will enhance compliance to standards and enforce regulation in Rwanda’s trade environment by reducing transaction time and costs incurred by businesses through effective trade systems and procedures. The funding will also see to it that licensing gets digitalized, inspection of imported electronics and allied goods as well as protection of Intellectual Property rights (IPRs) and also greatly contribute towards the government’s ambition to have zero trips and zero paper in...

Africa urged to avoid short-termism to realize AfCFTA

African countries have been urged to carefully analyze global lessons and think beyond short-termism so as to effectively tap into the benefits offered by the African Continental Free Trade Area (AfCFTA) Agreement. The latest call was made by the Institute for Security Studies (ISS), an African non-profit organization, as it stressed that "global lessons show that for AfCFTA to work, the continent's leaders must think beyond short-term election cycles." The ISS, in its latest publication on Thursday entitled "Can African leaders put free trade above nationalism?" also noted that the signing of the continental free trade pact "couldn't have come at a better time for the continent," emphasizing some of the latest developments in the global trade relations. According to the institute, the collective effort required to get 54 of the 55 African Union (AU) member countries to sign the AfCFTA, "particularly on a continent divided by disparate political agendas, short-termism and sporadic diplomatic standoffs, shouldn't be underestimated." "While the agreement is lauded as an African solution to African problems, it is worth remembering the pitfalls of those who've traveled a similar journey to avoid the same mistakes. This is even more important as trade agreements worldwide show signs of unraveling," the ISS said. Noting that trade relations in Europe were forged over decades following World War II to counteract the factors that caused the war, and collaborate for sustained economic growth and prosperity. Reaching agreement was an arduous process, the ISS stressed that "Africa seeks the same outcome in...

Intra-African trade body to start work

Arusha. The secretariat of the African Continental Free Trade Area (AfCFTA) will be operationalised in March, next year. The agreement came into force on May 30, this year, after it was ratified by the required 22 African Union (AU) countries. This was revealed here on Monday at the start of a symposium on the trade agreement which attracted scholars and experts from across the continent. The secretariat of the intra-African trade body will be established in Accra, Ghana as appointment of the secretary general is underway. “Structure and budget of the secretariat has been approved”, said Dr. David Luke, the coordinator of the African Trade Policy Centre based in Addis Ababa. He said it has been proposed that AfCFTA establish office in each state party; countries which have signed and ratified the agreement. Source: The Citizen

IMF revises up Rwanda 2019 growth forecast to 8.5%

The IMF on Wednesday revised up its growth forecast for Rwanda this year to 8.5%, from its previous projection of 7.8%, crediting strong growth in the first half of the year and new public and private investments in construction. The small east African nation’s economy grew at more than 10% in the first half of 2019, said the International Monetary Fund’s Laure Redifer, speaking at a news conference at the end of a two-week mission she led. “All the leading indications show a continued growth,” she said. Citing “big construction projects”, increased private borrowing and increased activity in the tourism and transport sectors, she said: “It’s a mix of a lot of things.” Tourism revenues were $380 million in 2018 and the government projects revenues of $405 million this year, the chief economist of Rwanda’s central bank, Thomas Kigabo, said at the news conference. President Paul Kagame, in office since 2000, has won international praise for overseeing a peaceful and rapid economic recovery of the country since the 1994 genocide, when an estimated 800,000 people were killed. Critics say this growth has come at the expense of civil liberties.

Why coffee prices are low despite steady demand

Despite a steady increase in coffee consumption around the world, trade prices have fallen dramatically in the past three years, hitting producers. At the same time, the cost of an espresso or latte remains as full-fat as ever. What's going on? Futures on arabica and robusta, the most widespread varieties of coffee, have fallen 40 percent since the beginning of 2017 and are now at historically low levels. This is largely because of bumper harvests in Brazil, the world's main coffee producer. But at the same time, consumption has grown by an average of 2.1 percent a year for the past decade, according to the International Coffee Organization (ICO). Two billion cups of coffee are drunk every day, according to Fairtrade International, which works to improve the lot of farmers through better pricing and conditions. The crisis in prices is beginning to create "real structural problems" for producers, said Valeria Rodriguez, a manager at fairtrade organisation Max Havelaar France. "The consequences are terrible - they can no longer support themselves, invest in production or prepare for the challenges of climate change," she said. Supplier woes In Central and South America, many smaller producers in Africa and Latin America are giving up in particular those who grow arabica, which is more difficult to produce than the robusta variety favoured in Asia, according to Jack Scoville, a futures markets analyst with Price Group. A similar trend is observable in Africa for reasons ranging from high production costs in Kenya to insecurity in...

Will Uganda-Rwanda meeting diffuse border crisis?

Katuna, a boomtown in Kabale District at the parallels of Uganda and Rwanda, is haunted by a spectre of violence. Since Rwanda closed the border, the kindred spirit that once prevailed among these communities was shattered. Today, suspicion remains rife on both sides of the border. Any slight straying into Rwanda, even within inches, has dire consequences for nationals from either side. As the conflict between Kigali and Kampala continues to fester, residents are now governed under the barrel of the gun. The canopies of knitted tree branches dotting the hills, a spitting distance across the border, give marksmen a cover to target those who attempt to cross on either side. In the place of hope lies fear. Commerce that once thrived at the border has been disrupted. The bond that prevailed among closely-knit families that live on either side has also been tested. Rwanda initially said it had closed the Gatuna border as a result of repairs it planned to implement on sections of its border road that connects Katuna to Kigali. But in a veiled message, the Kigali establishment accused Uganda of detaining its citizens incommunicado and lending support to subversive elements bent on sowing seeds of mayhem in Rwanda, allegations Uganda has rejected. Ugandans and other nationalities are allowed to cross from either side at will. Rwandans are only allowed to enter their country but not to get out. Only Rwandan truck drivers are allowed to exit if transiting to Kenya, but not Uganda. Specifically, Ugandan goods...

African Development Bank has $115bn more for projects on the continent

The African Development Bank (AfDB) will use its newly ramped-up capital base to help boost private sector investment on the continent and invest in infrastructure projects that support the African Continental Free Trade Area (AfCFTA). These are some of the plans the bank has for the additional $115bn (R1.7-trillion) recently approved by its shareholders, according to the bank’s vice-president for finance and CFO, Bajabulile “Swazi” Tshabalala. At the end of October, the bank’s shareholders agreed to more than double its capital base, the largest increase in the bank’s history, taking the total to $208bn. “We are looking to do more private sector activities and investments in support of the African continental free trade agreement because you need companies to actually trade with each other,” she said. The bank will also ramp up efforts to support African entrepreneurs, particularly women and young people. Tshabalala was speaking on the sidelines of the Africa Investment Forum, which closed in Johannesburg on Wednesday. The forum is designed as a deal-making platform and marketed 56 transactions from across the continent to international and regional investors. Investment interest was secured for deals worth $40.1bn, up from the previous year’s $38.7bn. The capital boost will provide the bank with “additional risk capacity” to support and crowd in investment by the private sector, particularly in low-income and fragile countries that have been neglected in the past, she said. This will include the use of instruments that help mitigate risks for private investors, including the bank’s co-guarantee platform. The...