Business round-up

All buildings to be assessed The Minister of Infrastructure (MININFRA), Linda Bihire, early this week said that all buildings in Rwanda will soon be assessed to determine their state of strength so as a follow-up of the newly launched building regulations. She noted that the assessment will see poor and weak buildings in the country demolished, and those (buildings) that are strong but below minimum standards will be upgraded to match the required level. The assessment and monitoring of both commercial and residential buildings will be carried out by the Rwanda Housing Board, yet to be established by the MININFRA basing on the new building control regulations. The housing board will also advice the line Ministry on building standards for updating the building control regulations, aimed at public safety for socio-economic development. Macro–economic policies to mitigate global economic crisis effects Rwanda’s macro-economic policies will help to mitigate the impact of the global economic crisis, according to a top official of the African Development Bank (AfDB). Lamin Barrow, the bank’s Principal Country Programme Officer said, “For a country like Rwanda the only best option is to continue deepening the policy and structural reforms initiated under its EDPRS, which can ensure rapid recovery and enhance the resilience of the economy.” He was commenting on the recently released African Economic Outlook (AEO) report for 2008/9 that indicates that the region has been gravely affected by the global economic down turn. Barrow said that local authorities have moved promptly to mitigate the impacts of the global economic crisis through the pursuit of sound and prudent macro-economic policies. “These will put Rwanda in a stronger position to take advantage of the opportunities arising from the global economic recovery.” World Bank to recapitalise local banks Rwanda’s commercial banks are to benefit from a World Bank fund to recapitalise financial institutions in developing countries, in order to mitigate the effects of the global financial crisis. This will also help local banks increase their capacity to lend and finance long term projects, which in return will contribute to the development of the country. This was revealed by the World Bank’s Senior Vice President for External affairs, Communication and UN Affairs Marwan Muasher on Monday, during a briefing at the Ministry of Finance and Economic Planning (MINICOFIN). He was in the country to meet stakeholders in the financial sector, visit World Bank projects across the country meet people in the private sector, civil society academia and various government officials. He noted that the global economy will shrink to about 1.7 percent and in Africa; growth is expected at 2.4 percent this year. Therefore, the World Bank will increase its commitment to lending from USD14 billion, USD35 billion and up to USD100 billion. Rwanda receives USD24 million for global communication Rwanda, under the Regional Communication Infrastructure Programme - Rwanda (RCIPRWA), has received a $24 million grant from the World Bank to establish its national capacity for broadband connectivity and access to low-cost international connectivity. This project, which will also facilitate the country’s connection to global networks through the undersea fibre optic cables, will primarily be implemented and managed by Rwanda Development Board in Charge of ICT (RBD-IT). RCIPRW will support both the public and private sectors by improving the telephony and digital traffic infrastructure in the country, thereby enhancing the quality and transparency of government and private sector ICT operations and service delivery. The Minister in the President’s Office in charge ICT, Professor Romain Murenzi said that with the government’s initiative to install a National Backbone fibre optic network, the project will boost Rwanda’s ambitions to become a regional ICT hub. KCB opens children’s saving account The Kenya Commercial Bank (KCB) has designed a special account that facilitates the financial needs of children. The account dubbed, “KCB Cub Account” allows parents and guardians to save money for their children at no cost for financial needs such as school fees. The Head of Marketing and Public Relations, Aretha Mutumwinka, said that there are no charges for service and cost of maintenance is low. The ‘Cub Account’ is open to children between one and eighteen years of age. Opening the account requires no opening balance and also earns some interest. Access bank to open four branches this month Access Bank Rwanda, a subsidiary of Access Bank Nigeria is set to open four new branches in Rwanda over the next six weeks as part of its expansion drive. The new branches, which will be located in various parts of the country such as Remera, Ruhengeri, Bugarama, and in the city centre, come as an addition to the four branches that have already been operational. Rwanda short of 25,000 housing units per year Rwanda needs about 25,000 housing units per year, according to statistics from the Ministry of Infrastructure. Linda Bihire, the Minister of Infrastructure, said that the estimated demand is for housing in the urban centres of the country only. In a breakdown, Kigali city alone demands about 10,000 housing units per annum well as the combined demand for housing in the rest of the country’s urban centres is estimated at 15,000 units per annum. It is estimated that, “The demand for construction of residential housing is increasing at a rapid rate with the urban population of 1.9 million growing at 4 percent per year. Yet the involvement of the public and private sector has not improved much from the 10 percent that was registered in 2003.” In 2008, the construction growth rate was estimated at 16 percent and planned settlements are the preferred and accepted form of housing development in urban areas, which require massive investments. The National Bank of Rwanda (BNR) statistics indicate that a single house costs about Rwf20 million as of last year. This means that total housing demand would require a financing package of up to Rwf500 billion per year. Kigali city alone, according to the ‘City Master Plan’ has construction projects worth USD600 million. Currently, Rwanda’s construction sector is largely financed by mortgages. However, the Central Bank Governor, François Kanimba, said that though the current demand for mortgage finance is much higher, its total supply remains far below the demand. In order to finance in a sustainable manner, real estate sector, Kanimba explained that, “Rwanda needs to mobilise long term domestic savings.” Ends