Q and A: Rwanda targets $200m in remittances - NBR

The National Bank of Rwanda is in a move to boost remittances from Diapora, with projections expected to exceed $200m this year. Business Times’ Gertrude Majyambere exclusively talked to Claver Gatete the Vice Governor of the Central Bank and he explained why there is need to have a favorable environment to attract remittances. Does the Central Bank have specific joint venture with any financial partner to facilitate or expand remittance into the country? We do not need to partner with any financial institute, because we are a regulator, and what we do is to monitor our financial systems. It is every important to note that though the majority of remittance come from Rwandan Diaspora but we also have this money that is sent by friends of Rwandans. We work with banks, Western Union, Speedex UAE exchange and Virunga Express and also capture the money sent through friends. How many Rwandans that are living in the Diaspora? This is a major challenge to the country, but the Dispora Directorate in the Ministry of Foreign Affaires would be having an estimate. However they have not yet carried out any detailed census. Uganda has way more Rwandans in the region, but outside Africa, Belgium is said to be the country with a big number of Rwandans between 10,000 and 20,000 followed by Canada. What’s the current status of remittances and what is your target? From the first seven month of 2010 $126.07million has been collected compared to $172.43m from transfers last year. Given the fact that we are at this level, we are going to exceed the money we received last year projecting to reach $200m. This money comes from all the sources mentioned and this is one way how we get foreign currencies, and whatever means it comes in hard currency which is very important. And as of August this year $160.21m was recorded from exports. Money transfer is mainly through Money gram, Western Union, and commercial banks. Money through Money Gram was $28.7m, Commercial banks $22.9m and $74.5m captured from bureaus in the last seven months. You see for us we have no control over remittances, because Rwandans can decide the way they send money, what we do for us is to make it easier and cheaper for them. And because there is competition they tend to reduce the cost of transfer. But we can’t know who is going to send money for what purpose and to whom. Are the transfer regulations encouraging enough to boost the remittance business? We have the best conducive environment for transfer in the region, ‘our capital account is fully liberalised’ this is very important because you are free to bring in any amount of money in foreign currency and take out as much as you want and you can repatriate your profits. Do not think that once you bring in your money, it’s impossible to take it back. But as usual we have to consider the rules and regulations for anti-money laundering. However, sending money is not only creating a conducive environment for the transfer but the opportunities in the country, where they can invest in the money like in housing. The environment in the country matters a lot in encouraging remittance business. Currently we have positive progress in all aspects at the economic level and that’s why foreigners are looking at investing in Rwanda. It makes them believe they should send money other than keeping it there. Central Bank said it would create an investment fund in collaboration with the Rwandan Diaspora Mutual Fund (RDMF) how far? You see usually when you want to have long term investment or diversify investment; you need to have a capital market or stock exchange that helps much in terms of attracting more resources. It can be invested as shares or stocks and Treasury bonds. The fund is already established and it’s under the Capital Market Advisory Council (CMAC) registration is finished and remaining to decide on how much to start with and may be in the coming convention by the end of this year they’ll be ready knowing what’s in their bag. But they are currently participating on the Rwandan market investing in share holding treasury bills and government bonds. The Capital market will help and advise on the products to be developed. Capital market will also help companies develop their own products in terms of listing, there is a lot of money there lying idle that can be captured like in life insurance, pension which is not going to be claimed in few days and that can be invested different long term assets. This can help to grow the economy but also to cater for pension on time once needed. What is the impact of remittances on the Rwandan economy? The impact is credible, it helps to stablise Rwandan Francs (Rwf) compared to other currencies in the region.We can never have a specific window for remittance because it comes in small amounts and in particular periods. The majority of remittance is housing and small projects in the country. Stablise our commercial banks, which contribute to the stability of the economy. Ends