IMF exposes weakness in banks, calls for more supervision Weaknesses in risk management and corporate governance must be addressed, says the International Monetary Fund (IMF) report released last week. It stated that these shortages are exposing weaknesses in risk management and governance of commercial banks, forcing them to tighten credit standards and leading to a decline in credit growth. François Kanimba, Governor of BNR attributed the current troubles in the banking industry to lack of risk departments to specifically handle risk management in banks. The report therefore suggests the Central Bank should strengthen the functioning of the banking system, and improve on banking supervision as key mitigating factors for the sector to survive the on-going financial downturn. Gov’t earmarks $700,000 for concentrate plant Government has set aside $700,000 to establish a concentrate plant before the end of this year as a boost towards the horticulture industry to compete on international markets. Local horticulture products have been limited on international market because of their unprocessed nature. The project is expected to process 20 percent of the total production by 2012. The unity of concentrate products will be at Nyirangarama enterprises which has a new infrastructure but lacks the concentrate unity. Peter Muvara, Chairman of Rwanda Horticulture Development Authority (RHoDA) said the project is a public private partnership venture with Gerald Sina. Gov’t targets Rwf49b from sericulture Government targets Rwf49 billion per year from 350,000 hectares of mulberry plantations to produce cocoons for silk production. The projections are calculated from the impression that, one hectare produces 19.2 metric tonnes per year valued at Rwf1.419 respectively at $3.3 per Kilogram. Peter Muvara, Chairman of Rwanda Horticulture Development Authority (RHODA) said sericulture is still challenged by rearing houses with 250,000 units needed. Government has pledged support to build houses, with each unit costing about Rwf12 million. Motorcyclists to earn commission from sale of Rwandatel airtime Motorcyclists attached to the Association of Motorcyclists in Rwanda (ASSETAMORWA) will earn a 7 percent commission from the electronic sale of Rwandatel airtime. This follows ASSETAMORWA’s signing of a partnership agreement with the telecom companyThis means that a motorcyclist will earn from selling Rwandatel airtime from the company’s E-Top up solution while also earning from fares by transporting passengers. According to the agreement, ASSETAMORWA and its zone offices will also earn 1.5 percent and 2 percent from each airtime sold by each association member, bringing the total commission value to 10.5 percent per airtime sold. Rwandatel will provide mobile handsets to the association members, payable in three instalments. Rwandatel partners with Seacom Undersea fibre-optics cable operator Seacom signed a partnership with Rwandatel and Uganda Telecom (UTL) to extend the reach of international broadband capacity from the coast across Eastern Africa. Subsidiaries of the Libyan Africa Portfolio LAP Green Networks, UTL and Rwandatel have each purchased international broadband capacity from Seacom. This means both entities have immediate access to the Seacom network. Uganda is connected to the Seacom network since but the agreement entitles Rwanda to benefit from the newly available broadband capacity by September. Seacom CEO, Brian Herlihy said that the agreement guarantees that Rwanda would be connected immediately. Gov’t to decide on pump prices Government, will in two weeks’ time decide on whether fuel pump prices would be reduced or remain stable on the local market following a drop in oil prices (below $74 (Rwf41,717) per barrel) on the international market. The Permanent Secretary in the Ministry of Trade and Industry, Antoine Ruvebana said government is organising a meeting with all the parties concerned to assess the impact and deliberate on whether to reduce pump prices. “We source our fuel from Kenya, so we have to look at prices in Kenya if they are going down according to the international trend or not then we decide accordingly,” he explained. Since June, pump price have been trading at Rwf825 after an increase from Rwf756 per litre representing a 9.1 percent increase in just a period of only one month, on the local market. Investors rush for mining sector Potential investors are rushing to explore Rwanda’s mining sector despite the challenge of the drop in prices of minerals on the international markets attributed to the global financial crisis. Government concessions in Régie d’Exploitation et de Développement des Mines (REDEMI) have been taken by private operators and still more investors are coming for new concessions. In the last three years about 17 companies with largely foreign interests have been registered to buy government concessions in REDEMI. Recently cabinet approved China Xiamen Tungsten Corporation, Caracal Gold Rwanda and Kivu Gold Rwanda as some new companies interested in new concessions. Digital recording in commercial courts delayed Trials in commercial courts will continue to be recorded manually until after relocation to Nyamirambo premises, which are home to the high court, the Vice President of Commercial High Court has revealed. Benoît Gatete said that the installation of digital recorders, which were expected to operational by mid this year, could not be done at the old premises after government proposed that the courts move to Nyamirambo. The commercial courts will move from Kisementi in Remera, to government owned premises, while the Nyamirambo based High Court will relocate to the new building behind the Supreme Court at the Ministry of Justice. This could also pave way for the digital system to be expanded to other courts where records are manually entered. Cimerwa alternative energy production Rwanda’s only cement factory, Cimerwa seeks to use peat for energy in order to cut down its operating costs by about 50 percent. Fiacre Birasa, the Director of Rwanda Investment Group (RIG) said that peat production will be possible within the next two months. “The first phase of the project is almost done. We are shifting from using 100 percent heavy fuel on the plant, which is extremely expensive,” he said. Peat will be mixed with heavy fuel to produce energy with the former accounting for 70 percent. Olyana acquires Gisovu Tea Company Olyana Holding, an American liability company has acquired 60 percent shares in the Gisovu Tea factory and plantation from government. The agreement follows cabinet approval of the sale of the tea factory. According to the details of the deal, the American consortium represented by businessman George Rubagumya parted with $2.4m (Rwf1.3 billion). Government through Rwanda Tea Authority (Ocir-The) retains 30 percent shares in the Kibuye-based factory while local farmers will maintain 10 percent. Gisovu has a tea processing factory producing around 1.7m Kgs of tea annually. Rwanda is also selling off 45 percent and 60 percent stake in Gisakura and Kitabi tea companies respectively. Ends
