Business round up

Turkish Airlines to boost Rwanda, Turkey trade volume The launch of Turkish airlines flights to Kigali expected soon, will relieve the jam business people have experienced at Nairobi which is Rwanda’s major outlet link to the outside world. The Permanent Secretary in the Ministry of Trade and Industry, Emmanuel Hategeka, said that Rwanda will be the next stop over on addition to the airlines flights that covers 14 African cities in 12 countries. He said that the flight will bridge the distance between Istanbul and Kigali. The PS was addressing a 15 man delegation comprising of investors from Turkey. Hategeka said that government looks forward to increase the volume of trade with Turkey. The delegation was visited to identify potential areas for investment and ways of expanding their businesses in Rwanda. This is expected to strengthen the investment relations between the two countries. Capital Markets Authority Set for Launch The Parliament passed the Capital Market Law, effectively paving way for the establishment of the Capital Markets Authority (CMA). This will be an independent agency that will regulate the operations of capital markets. CMA will replace the Capital Markets Advisory Council (CMAC) which was established by the Prime Minister’s decree of 2007. The body was formed to oversee the development of capital markets in the country. The law is also expected to regulate the Rwanda Stock Exchange, which will be in charge of trading operations in securities. The Executive Director of CMAC, Robert Mathu, believes the law would not have come any sooner, considering the increased activities on the RSE. He said that there was no legal framework governing the capital markets in the country. He added that although CMAC was created by a prime ministerial order and governed by the Companies Act which governs all companies, it is not specific to the capital market. International body to administer US$8m SME fund Business Partners International will manage a basket of US$8 million fund to support Small and Medium Enterprises (SMEs) The fund is raised by group financiers including International Finance Corporation (IFC), Stretcher Deon, BPI, and Rwanda Investment Enterprise Co Ltd (RIEC). The fund is expected to increase lending to SMEs. The Senior Operations Officer at IFC said BPI`s experience in SMEs is the best way to the country`s SMEs. He added that BPI will give out some loans without demanding for collateral as well as addressing tight lending restrictions. The financing groups injected extra US$4 million as new capital an addition to the existing US$4 million by RIEC. The move is to address some of the financial challenges hindering the progress of the industry. Rwanda adopts Comesa customs system Rwanda is set to implement a new system known as the Regional Customs Transit Guarantee (RCTG). The system aims at reducing costs associated with transportation of transit goods in the region. Currently, the system in use is said to be expensive and time consuming. The new system will eliminate administrative and financial costs associated with the current system. Currently, it requires traders to buy bonds required by customs bodies of each country they pass through. The Chief Program Officer of COMESA in the RCTG Unit, Berhane Giday, told stakeholders that RCTG will facilitate regional exporters and importers by improving their competitiveness. He said that the cost of transit and transport in the COMESA region is believed to be the highest in the world. Giday added that this makes the cost of imports very expensive hence raising the cost of goods to the consumers and producers. He explained that such issues will be solved by RCTG scheme since it’s expected to reduce the cost of transport and transit of goods with in the region by 10 to 15 per cent. SMEs can help check the effects of population growth Experts said Rwanda must support SME’s growth to check on the risk of population growth, an emerging threat to the country’s economic growth and development. Currently, the population growth of 2.7 percent annually leading to 300,000 new born babies every year. If no steps are taken against the raising population, it is expected to triple by 2015 Analysts say this will cripple the economic growth and stall the country’s vision 2020 and Millennium Development Goals (MDG) attainment. Francois Sekamondo, working with the Ministry of Finance claims that investing in activities geared towards promoting the private sector would help curb the aftermaths of population growth. Ecobank profits drop 46% Ecobank Rwanda recorded an Rwf171.2m shortfall in net profits last year from Rwf366.7m in 2009. This accounts for a 46 percent drop. The bank’s 2010 financial statement indicates that it realised a net profit of Rwf195.4m. While its liabilities increased by 50.6 percent from Rwf52.6b to Rwf79.3b. The statement further indicates that the bank’s operating income increased from Rwf6.1b in 2009 to Rwf8.2b in 2010 and its total comprehensive income in 2010 fell by 91.8 per cent from Rwf1.6b in 2009 to Rwf136.5m in 2010. In a move to strengthen its international operations, Ecobank Group opened a London branch to act as a UK representative office of EBI SA, Ecobank’s French subsidiary. Ends