With less than 10 days to the New Year, 2016, it  is yet again that time of the year to look at some of the main events that made the headlines across different sectors of the economy this year, and could impact the lives of Rwandans going forward. The year started with a lot of optimism, but there were some hitches along the way, like the power cuts and the high dollar rate that affected the business community. There has also been some bank takeovers, but the local bourse got a huge boost this year with another firm listing on the exchange. Generally, the year has not been very good or bad for many a business.

However, despite some few hitches, the economy defied the naysayers, registering an impressive 7 per cent growth in the second quarter of the year compared to 6.1 per cent in the same period last year. Rwanda is projected to achieve over 6.5 per cent overall growth this year, (going by the IMF, government and World Bank projections).

This underlines efforts by all players to ensure the economy remained robust, attracting more investments and creating additional jobs for the youth, with 2016 projected to be an even better year in terms of attracting investments to drive the country’s development agenda, the second Economic Development and Poverty Reduction Strategy (EDPRS II).

Besides, the country’s financial sector remained sound and well capitalised with adequate liquidity levels and quality assets, according to central bank. Commercial banks overshot the central bank’s benchmark of 15 per cent, recording 24.3 per cent, while microfinance institutions were at 31.4 per cent during the second quarter of the year.

The sector’s bad loans also dropped during the period, with non-performing loans (NPLs) recorded by commercial banks declining to 5.9 per cent from 6.6 per cent, while NPLs among MFIs stood at 7.4 per cent, a marginal reduction from 7.6 per cent during the same period last year.

However, there was an outcry from the public over the appreciating dollar, with the local currency hitting lows of Rwf800 per dollar, a situation that forced the central bank to crack the whip on speculators, blaming them for the negative development. The situation has since normalised.

 This year, the business community recorded mixed fortunes, where some big deals were clinched while some firms were taken over.

The local bourse received much-needed boost with the listing of another local firm. The government quarterly bond issuance programme to finance infrastructure projects continued over the year, attracting more local investors, especially co-operatives that were hitherto not investing in government paper. So, what stood out in different sectors of the economy?

Crystal Telecom lists on RSE

Crystal Telecom in July listed shares on the Rwanda Stock Exchange following a successful IPO, which was oversubscribed by 123 per cent. The firm offered about 270.17 million shares which is 20 per cent of MTN Rwanda, making it the first private firm to issue an IPO, which received 2,300 applications from Rwanda, the East African Region and beyond.

The listing breathed a new lease of life into the local bourse, improving product offerings at the exchange, and RSE capitalisation. The firm’s shared price opened at Rwf144, while the IPO was at Rwf105 per share. The counter has since dropped to Rwf99 (as of yesterday).

Though the exchange had anticipated another IPO for the sale of government shares in I&M Bank, did not materialise, and could come sometime next year. The local bourse currently has seven firms trading, with three local – Crystal Telecom, Bank of Kigali, and Bralirwa; and cross-listed counters – KCB, NMG, Equity Group, and Uchumi Supermarkets. Most of the cross-listed firms will close the year without selling a single share.   

The Capital Markets Authority and the City of Kigali also announced a huge partnership that will see the development of low cost housing as part of the city authority’s efforts to create organised urbanisation. The project could also help turn around the real estate sector, and bring more decent housing units onto the market.

Business mergers and financial partnerships

Perhaps the biggest deal was the October takeover of Banque Populaire du Rwanda (BPR) by Atlas Mara, a sub-Saharan financial services firm.

The merger, which was  subject to the central bank approval, created the second-largest bank with assets worth $325 million, and the largest financial services player in terms of branches across the country. With a majority shareholding of about 62 per cent, Atlas Mara is to invest about $21 million (about Rwf15 billion) into the bank. The firm bought BRD Commercial last year.

Bank of Africa Group S.A, a continental financial institution, in October acquired 90 per cent controlling stake in local micro-finance bank, Agaseke Bank. With the buyout, Agaseke Bank’s total share capital of the bank increased from Rwf2 billion to Rwf6.6 billion. Agaseke started trading as an affiliate of the Bank of Africa Group effective October 13.

KCB bank and Century Park funding deal

KCB Bank Rwanda and Century Park Ltd inked a financial partnership deal to fast-track the multimillion dollar Century Park Complex in Kigali.

The bank pledged to invest  $200 million (about Rwf145 billion) in the construction of the complex park hotel that is expected to add about 200 apartments, 16 supper luxurious villas, supermarkets and two five-star hotels.

The deal, according to Charles Haba, the director of Century Real Estate, will help ease the increasing demand for residential and commercial housing needs as well as boost the hospitality sector. The two-phase project in Nyarutarama, an upscale Kigali suburb, will sit on 9.6 hectares of land, and will be completed in five year.

BRD and EADB Rwf11b private sector support

The Development Bank of Rwanda (BRD) and the East African Development Bank (EADB) signed a $15 million (about Rwf11 billion) credit line to support the private sector.

The credit facility according to BRD chief executive Alex Kanyankole will enable BRD to provide long-term loans to new and existing medium, small and micro-enterprises in various economic sectors in the country.

Access Bank secures Rwf4.6 billion AfDB loan to support SMEs

The African Development Bank Group extended a $6 million (about Rwf4.6 billion) line of credit to Access Bank Rwanda to support small and medium entrepreneurs and women in business. The line of credit according to Negatu Makonnen, the AfDB country representative will support initiatives geared at enhancing private sector investments and thus spark economic growth.

Funding cross-border trade

In its efforts to  boost cross border trade, the Government of Rwanda and the World Bank, signed a financial agreement worth $26 million (Rwf19 billion) to facilitate cross-border trade between Rwanda and the Democratic Republic of Congo.

The money is part of a $79 million financial assistance that was approved last month by the World Bank Group’s Board of executive directors for six regional countries.

The Rwf19 billion assistance will support the Great Lakes Trade Facilitation Project, which was designed to reduce the costs faced by traders, the majority of whom are small-scale and women traders, on the borders of the DRC and Rwanda, Claver Gatete, the Minister for Finance and Economic planning.

Bank of Kigali named best regional bank of the year

Bank of Kigali was named as the best Regional Bank of the Year in East Africa for excelling in the industry in the region. The recognition was announced on the sidelines of the 50th Annual Meetings of the African Development Bank (AfDB) in Abidjan, Ivory Coast.

The bank was also recognised for the role played in reaching out to new customers, offering new services, adopting inclusiveness, and making use of new technologies thus contributing to a stronger financial sector.