Business round up

Strong export performance to narrow trade deficit Reports from the central bank indicate that large increase in exports this year is expected to narrow Rwanda’s widening trade gap, underlining strong recovery of the economy from the external shocks of the financial crisis. Latest official figures from indicate that during the first 9 months of 2010, Rwanda’s exports increased by 30.5 percent and 3.6 percent in value and volume, respectively. This is in contrast to a significant decline of 29 percent recorded in value last year during the same period. The Minister of Finance, John Rwangombwa, told Business Times that export value has been largely boosted by overall improvement in commodity prices on international markets. “We had good investments in coffee and we are seeing the results now. We have also seen an increase in tea,” he said, referring to the two commodities as the key drivers of improved export performance. Coffee, tea and minerals remain dominant in the country’s exports, accounting for 67.9 percent of the total export earnings in the first nine months this year. Gov’t launches Bralirwa IPO The government launched the Initial Public Offer (IPO) of Bralirwa, Rwanda’s largest brewery company by market share in an invent that took place at Hotel Serena in Kigali.Out of the 30 percent stake government owned in the company, 25 percent was to be sold to the public and the 5 percent was meant to be purchased by the Heineken group which also owns the remaining 70 percent. The sell of government shares in the company attracted both domestic and foreign investors with investors from the EAC region treated as domestic. In an interview, the chairperson of the privatisation committee which is overseeing the IPO Vincent Munyeshyaka said that “Government has a very clear allotment policy which calls for equal treatment of EAC investors.” This means that investors from Kenya, Uganda, Tanzania and Burundi will buy the shares at the same price as Rwandans. Banks reluctant to lend despite low repo rate It was reported that although the central bank loosened the rate at which it lends to commercial banks, these banks are most likely not to lower the rates at which they lend to the public. Recently, the central bank lowered its repo rate by one percentage point to 6 percent from 7 percent to with the aim of empowering the financial institutions in their lending operations. However, the Chairman of the Bankers Association, Steve Caley, told The Business Times that even though the repo rate is reduced, banks will not automatically shift from short and medium term placements in the money market to loans, contrary to the central bank’s objective. He said “This consists of various factors like bank’s appetite, risk assessment, profitability or even the bank’s general policy as regards diversification of its income generating activities.” RBS quality marks to boost exports Rwanda Bureau of Standards (RBS) is optimistic that there will be an increase on the country`s exports, basing on the introduction of new quality marks for local manufactured products. The Deputy Director General of RBS, Patrice Ntiyamira said that quality marks are key drivers of export promotion and that the institution is ready to play a role in facilitating, developing and availing standards in-demand. During the launch of the quality marks, Ntiyamira said that “The role of RBS in elimination of trade barriers is issuance of marks and certificates as a proof of conformity and inspections and surveillances for fair trade.” The institution also promised to support local industries through trainings and providing information on trade barriers and how to avoid them. Ntiyamira highlighted that trade globalization dictates that health and safety of consumers be assured. IFC issues first central bank swap worth $2.5m International Finance Corporation (IFC), the World Bank’s investment arm announced the disbursement of its first local currency loan worth $2.5 m to Bakhresa Grain Milling for the purchase of trucks to transport wheat from the Tanzanian port city of Dar es Salaam to Kigali. The swap, first of its kind, follows an agreement signed between the central bank in December last year to provide Rwandan franc-denominated loans to boost lending to the private sector. The Managing Director of Bakhresa Grain Milling Rwanda, Mounir Bakhresa, said that “Through this loan we can access long-term financing to expand our operations and efficiently increase the supply of wheat to Kigali.” Earlier this year, IFC provided $8 million to Bakhresa to build a flour mill in Kigali with a capacity of 250 tons a day. Kanombe Airport traffic increases by 66 percent According to Rwanda Civil Aviation Authority (CAA), Kanombe International Airport has recorded a 66 percent rise in flights handled per week, from 60 last year to 100 flights this year. CAA says the percentage increase is a result of a rebound in economy activity. The Director General of CAA, Richard Masozera, said that Rwanda’s aviation industry is experiencing a growth in traffic volumes and that the trend is likely to continue throughout next year. “We are benefiting from an improved national economy and also a recovery from the Global Financial Crisis,” Masozera said. CAA is targeting about 300,000 passengers by the end of this year. “With the entrance of KLM, we remain well positioned to achieve our target of 20 percent growth,” he said. Rubavu SMEs benefit from BDS services Through the Business Development Services (BDS), over 60 permanent Small and Medium Enterprises (SMEs) in Rubavu district, have so far benefited from the services offered by the Private Sector Federation (PSF). The PSF introduced BDS centers three years ago with the aim of helping SMEs in every district to improve and grow their business. RRA introduces tax stamps on liquors and wines Rwanda Revenue Authority introduced a system which requires manufacturers and importers of wines and liquors to affix tax stamps on their products. According to RRA, the measure is aimed at protecting these goods from unfair competition. The system has been in use with only dealers in cigarettes and the tax stamp is affixed on all cigarette products manufactured or imported in the country. Announcing the development, Deputy Commissioner for Large Taxpayer’s Office, Ben Kagarama, said the step taken was in accordance with the ministerial order No009/10 of 20/08 determining and establishing consumption tax on some imported and locally manufactured products. Ends