Economic growth must translate into job creation

AS Rwanda continues to register strong economic growth, members of the business community say that the country’s economy must be able to register sustained job creation in order to absorb the growing number of university graduates. Rwanda’s economy grew by 7.4 percent in 2010 with a positive balance of payment estimated at US$71 million (Rwf42 billion), possibly reflecting the consistent foreign investment inflows. “The growth is commendable, but it must create more employment opportunities as a result of the improvement,” Simon Kalenzi, the Managing Director of KPS Associates, an Audit and Consultancy firm told Business Times in reaction to the monetary policy and financial stability statement that was presented, last week, by François Kanimba, the central bank Governor. He added that: “The number of university graduates grows every year and I believe that the economy of Rwanda will be sustained if its development marches the quantity of jobs created.” Sanjeev Anand, the Managing Director of Rwanda Commercial Bank (BCR) said that the central bank implemented favorable policies that enable commercial banks to lend money to Small and medium Enterprises (SMEs), which employ the majority of Rwanda’s workforce. Last week the central bank decided to keep its repo rate—at which it lends to commercial banks— unchanged at 6 percent to boost bank’s lending to the private sector, especially SMEs. “The central bank is willing to provide low cost liquidity to the market by lowering the interest rates and easing the monetary policy to stimulate the economy, which in the end create more employment opportunities,” Anand told Business Times. The reactions come after Kigali City Council (KCC) announced that it earmarked a financial outlay of Rwf1.4 billion for job creation initiatives in its 2010/2011 budget. Among other concerns raised during Kanimba’s presentation included the advantages of the Rwanda Integrated Payment System (RIPPS), a modernised payment system that the central bank launched on February 11, 2011 to ensure that bank clients are paid in time. “With regard to card based payment system by use of ATM cards, people will not risk carrying liquid cash all the time, a behavior which might attract robbery,” Josephine Mukamasabo, a private entrepreneur said. “Some banks’ ATM machines breakdown time and again, but this year, if they upgrade them and make them function everyday, then bank clients will benefit from the services even more.” Statistics show that ATM transactions rose to Rwf27 billion and 393,088 in value and volume respectively last year from 221,489 and Rwf22 billion in 2009. Ends

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Economic growth must translate into job creation