Business Round-Up

KCB officially applies for Rwandan bourse cross listing The Nairobi-based Kenya Commercial Bank (KCB) group has officially applied to the Capital Market Advisory Council (CMAC) for listing on the Rwandan bourse, said the KCB’s Deputy CEO-Group Controls. Samuel Kimani said that KCB group has issued two billion shares on the Nairobi Stock Exchange (NSE) and those shares will be available on the ROTC market, allowing Rwandan investors to become shareholders in one of East Africa’s largest banks. With this cross listing, it means the bank is not raising capital, but instead allowing Rwandan nationals to buy its shares from existing shareholders without necessarily going to Kenya, Uganda or Tanzania. The group’s application awaits approval from the CMAC board. If approved, KCB will become the first company to have its shares traded on the Rwandan bourse. It will also make KCB the first company to list on the four stock exchanges within East Africa. The decision from CMAC board is expected in less than two weeks. RRA calls for VAT slash on foreign trucks Rwanda Revenue Authority (RRA) has asked government to impose a zero-rated tax regime on Value Added Tax (VAT) reverse charge, on foreign trucks like in other East African Community (EAC) countries. This also follows a series of complaints from Rwandan importers about the 18 percent charges on foreign trucks that deliver cargo in Rwanda. The current taxation law stipulates that anyone using a foreign service when there are local businesses that could provide the same should pay a VAT tax. Importers say that the charge is painful and it is one of the bottlenecks of doing business in the country. Currently the law does not even make provisions about what happens when such a service is unavailable when needed. Mary Baine, the RRA Commissioner General said that RRA has made proposals to government in order to have it zero-rated. She however said that changing the tax regime on VAT reverse charge does not mean that these trucks will not be taxed. VAT is Rwanda’s top tax revenue earner. Rwanda to export finished leather Rwanda Leather Industry Ltd, the country’s sole leather company is to export finished leather products soon this month, Gitau Wamukui the company’s Chief Executive Officer said. This follows the acquisition of 15 machines to process 37,500 tonnes of skins and 9000 tonnes of hides monthly. The will start with four leather products which include; furniture leather, leather for making shoes and leather for garments like jackets. The samples will soon be taken to countries like Kenya, Uganda, South Africa and Germany that have shown interest. The company has been exporting its unfinished products to India, China, Hong Kong, Kenya and Italy. Global oil price increase won’t affect Rwanda Fuel prices in Rwanda will not rise despite increasing oil prices on the global market above $67 (Rwf36,224) for the first time since November 2008. Over the last one-month, crude oil prices have risen from $53.50 (Rwf29,746) to settle at $67.70 (Rwf37,641.2) a barrel, on international market. Antoine Ruvebana, the Permanent Secretary in the Ministry of Trade and Industry however said that Rwanda has a strategic reserve which will keep the country for over a month as it waits for prices to stabilise. “Our entire depots are full and we are aware of the global increase of the prices.” On the local market, petrol and diesel pump prices have remained stable at Rwf756 and Rwf756 per litre respectively. Rwandatel launches post-paid service Rwandatel, the country’s second largest telecom company by market share, on unveiled its post-paid package, targeting 5000 customers for the product by December this year. The company’s Chief Executive Officer (CEO), Patrick Kariningufu, said that the package targets corporate and the business segments that need continuous mobile phone communication. “It offers the convenience for the users with flexibility of international roaming, closed user group and itemised (specified) billing. The service is free for any customer, without specific numbers, upon payment of Rwf100,000 initial deposit. It is also a contractual service with a monthly subscription of Rwf2,000. The new product is expected to cement the company’s position in the local telecom market. Rwanda to converts biogas to transportation fuel Rwanda is to begin converting Biogas to Compressed Natural Gas (CNG), a more environment friendly product that will be used as a fuel for vehicles and for cooking. This was revealed by Edouard Ndayisaba, the Managing Director of CRET Sarl, a local company dealing in biogas technology. He did not disclose the time when this will be implemented but said that his company is venturing into production of CNG after successfully dealing in installation of Biogas plants in the country for almost four years. This will be the first company in the region to convert biogas into CNG. Company’s production is low and mainly used for light. It therefore requires a financial outlay of about $0.8 million (Rwf454 million) for building bio-digesters. Gov’t to lift ban on export of raw hides and skins Rwanda is considering to temporarily lift a ban on export of row hides and skins, the Ministry of Trade and Industry said. “Most dealers are not accessing the market due to the credit crunch but we are in the process of ‘freezing’ the ban, this will allow provisional export of unprocessed hides and skins,” Antoine Ruvebana, Ministry’s Permanent Secretary. He said lifting the ban could possibly revive the falling export revenue from the leather sector. In 2005 government banned exportation of raw hides and skins thus weakening the leather sector. In 2008 government had targeted $4 million (Rwf2.216billion) of hides and skins export revenue but statistics from the Rwanda Development Board (RDB) show that by August only $1.21 million (Rwf671 million) had been generated. There has not been any export of unprocessed hides and skins for the last two years, causing a persistent heaping of the livestock products in the abattoir. Ruvebana said the rotting stock is a result of limited market and low prices estimated below Rwf150 per kilogram. Since local dealers cited high treatment costs as the major challenge to the industry, the ministry says that government is in talks with a Kenyan company to buy and process the products. Domestic tax revenue likely to increase under EAC Customs Union Rwanda Revenue Authority (RRA) says that domestic tax revenue is likely to increase as the country seeks solutions to mitigate a likely loss resulting from joining the EAC’s Customs Union this July. Celestin Bumbakare, a Commissioner for Domestic Taxes in RRA said that the Custom Union will intensify recruitment of more tax payers to widen the tax base that will consequently increase VAT and excise duties collections. “A customs union will make products from other countries more available on the Rwandan market and at relatively cheaper prices.” This refutes clears the air that government may lose Rwf12.4 billion in implementation of EAC Customs Union as stipulated in its 2009/10 draft budget paper. Bumbakare said the tax revenue loss is likely to be less than anticipated, owing to increased intra-EAC trade. Products attract a common external tariff for third country sourced products which ranges between zero percent and 25 percent and 50 percent and 60 percent for sensitive products. Ends