Business round-up

Kigali city WiBro network launched Kigali Wireless Broadband (WiBro) Network and the Kigali Metropolitan Network (KMN) were officially launched last week after two years of work on the infrastructure development. With the two projects, which were deployed by Korea Telecom (KT), Internet users in Kigali city will be able to enjoy data connectivity and Voice over Internet Protocol (VoIP) services. WiBro is a wireless broadband Internet technology which allows people on the move to remain connected to the Web. KMN (Fibre Optic cable) is a large computer network that spans a metropolitan area. It also provides Internet connectivity for Local Area Networks (LANs) in a metropolitan region, and connects them to wider area networks like the Internet. The two projects are in line with Rwanda’s strategy to promote, expand and upgrade the Information Communication Technology (ICT) infrastructure. During the projects unveiling ceremony, Rwanda Development Board’s (RDB) new CEO, John Gara, said that a total of 46 government institutions are already enjoying the connectivity. “This technology will cater for data, voice and video transmission plus other value added services that the market may require,” Gara explained. He also added that with this type of modern technology, connection to homes, businesses as well as the private sector will lead to access of affordable and reliable services. Inflation eased slightly in October In October 2009 Rwanda’s year-on-year inflation dropped by 0.33 percent to 5.59 percent from 5.92 percent the previous month, according to the National Institute of Statistics of Rwanda (NISR). The underlying inflation rate—excluding fresh food and energy was established at 3.20 percent in the month of October, the statistics body said in a statement. The increase in the consumer prices index is attributable primarily to the increase in food and non-alcoholic beverages which rose by 1.68 percent, housing, water, electricity, gas and other fuels 0.71 percent as well as transport 0.87 percent. “This is much lower compared to the n the previous months. We expect to close the year with single digit inflation,” Ngendo Diane Karusisi, Senior Advisor at NISR told Business Times. “Prices are not going up so much. This is because of high production in the agriculture sector,” she said. It is noted that the increase of 1.68 percent in prices of food and non-alcoholic beverages is primary attributable to the increase of 1.3 percent of vegetables and 3.33 percent of fish. Net equity in banking sector hits Rwf80 billion this year Despite the recent liquidity crunch in the banking sector, the sector has registered a significant growth in the last four years, netting Rwf80 billion in equity this year from Rwf21b in 2005, according to information from the National Bank of Rwanda (NBR). The 280.9 percent growth has been attributed to the liberalization of Rwanda’s financial sector which has also attracted Rwf86 billion in form of investment capital in the last four years. “The minimum share capital requirement for commercial banks was increased from Rwf1.5 billion to Rwf5 billion and this has helped stabilize our financial institutions from the effects of the global financial crisis,” François Kanimba, Governor NBR said last week. The governor said that due to reforms in the banking system, recent performance trends in the sector indicate a positive shift in which consolidated total assets of the commercial banks have increased more than two folds from Rwf192.2 billion at the end of 2004 to Rwf511 billion by the end of 2008. The total gross loans in the sector have also increased by 194.6 percent from Rwf129b to Rwf380.1b in 2008 with a fall in non-performing loans from 40 percent in 2004 to 11 percent this year. 14 percent access formal banking About 14 percent of Rwandans have access to formal banking, according to Francois Kanimba, the Governor of the National Bank of Rwanda (NBR). Citing a research study conducted by FinScope Rwanda and Institute for Policy Analysis and Research (IPAR), Kanimba said that 26 percent access other informal financial services while 48 percent are excluded from financial services. He said this during the official opening of the four-day, East African Financial Exhibition at Expo grounds in Gikondo last week. Alluding to the statistics Kanimba said that, “this simply indicates that our banking and financial institutions need to double their effort in bringing services closer to people.”Kanimba also disclosed that despite improvements in the operations of financial institutions there is still a gap in service provisions to Rwandans. “Besides the challenge of access, the financial institutions have not fully diversified their products and services and the volume of credit to the key sectors of the economy like agro-business,” he said. He also said, “People are frustrated with poor quality customer care service in the Rwandan financial institutions. The exhibition that is the first of its kind in East Africa brings together 27 financial institutions from the region to showcase financial services. Oil prices to remain stable despite international trends Government officials have said that fuel pump prices on the local market will remain stable despite a drop in international oil prices. Monique Nsanzabaganwa, the Minister of Trade and Commerce said that there is a criteria put in place to cushion any effects from the trends in the international market. She how ever declined to predict whether the prices will be changing now. “At the end of every month we (government) meet with petroleum dealers to monitor price structures internationally and reach an agreement on local pump prices and we will be waiting at the end of the month then a decision will be reached,” Nsanzabaganwa explained. Fuel prices have dropped for the first time in two months on the international market from $82 (Rwf46,494) a barrel to below $73.9 (Rwf41,391). Last month, oil prices on the international market had gained by 17 percentage points from $68 (Rwf38, 556) to $80 (Rwf45,360) a barrel causing a 3.1 percent increase in pump prices on the local market. The increase which caused pump prices to increase from Rwf860 per litre to Rwf887 for the fourth time in 2009 was attributed to the increase on the hike on the international market and the weakening of the US dollar. Ends