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Cablegate: Rwanda Monthly Economic Review


DE RUEHLGB #0633/01 1901529
R 091529Z JUL 07





E.O. 12958: N/A

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The United States African Development Foundation (USADF) and the
Rwandan government have endorsed a $4 million (about Frw2.2 billion)
joint pact to develop small- and- medium-sized Rwandan businesses.
The money will target the development of smallholder agribusinesses
to improve their regional and international competitiveness.

Finance minister James Musoni said the government's contribution is
$2million (about Frw1.1 billion), while the rest is a grant from the
US government.

"It's a great opportunity for Rwandan business community because it
targets the largest sector behind the growth of private sector,"
said Musoni..

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The grant will support innovation, entrepreneurship, and ownership
to stimulate economic growth, create jobs, and increase income of
the poor. It will also expand local institutional and financial
capacities to foster entrepreneurship and community based economic
The amount is part of the annual budget, targeting increases in
viable projects and registered cooperatives in agribusiness and

The minister pledged governments' commitment to ensure that the
facility is put to good use to achieve its objective

Dick Day, USADF's Chief Operating Officer, emphasized, "The facility
is expected to help young enterprises and cooperatives to build
their capacities. We want to see thousands of Rwandans improve their
lives and young cooperatives that can't access bank loans move from
one program to another."
USADF is an independent public corporation providing investment
capital, technical assistance, and managerial and marketing

It supports a broad range of enterprises across various sectors,
building integrated supply chains, industry groups, and agricultural
communities that are the foundation of a dynamic private sector.

BCDI sold
Source: The New Times, (Kigali) June 29, 2007

A leading banking Group in West and Central Africa, Ecobank, was
yesterday announced as the principle shareholder of Bank of
Commerce, Development and Industry (BCDI) after acquiring 90 per
cent of the stake.
The announcement comes after previous shareholders failed to raise
Frw 5 billion, which is the minimum capital stock required by the
National Bank of Rwanda (BNR).
"We have got a solution for all the setbacks that the bank have been
going through," central bank (BNR) Governor Francois Kanimba, said
while presiding over the official take-over function at BCDI main
office in Kigali City.

As a result BCDI will soon be renamed Ecobank Rwanda. BCDI, with a
pile of 46 per cent of Non Performing Loans (NPL) had been stuck in
a financial trench.

The central bank requires all banks to have a single NPL digit next
year. Kanimba explained that a net loss of Frw2.5 billion has been
hanging on the neck of the BCDI clients' deposits. "It is now over.
The problem has been solved," he said.

He attributed the bank's insolvency to excessive internal lending,
poor management and misappropriation of funds. Ecobank has emerged
as the savior with a recapitalization of Frw6.4 billion.

Kanimba confirmed that the money has already been deposited with
BNR. "We found it proper to enter the East and Southern African
countries. We'll use our presence here to move to regional countries
like Tanzania, Uganda and Burundi," Albert K. Essien, Director
Ecobank Transitional Incorporation (ETI) said.
ETI is the parent company of the Ecobank Group.
BCDI's image has been damaged by the trial of its founding chairman,
CEO and its previous principle shareholder, Alfred Kalisa. Kalisa
was arrested last year alongside former chief accountant, Eugene
Rutajoga on charges of documents' falsification, breach of trust and

Ecobank's balance sheet totals to $4 billion. "We will superimpose
our image on BCDI; we want to put the past behind," the new BCDI
chief, Daniel Sackey, said.

The 10 per cent remaining shares have been distributed among other
shareholders who include Egide Gatera, Jean Pierre Gatera, John
Nkera, John Bosco Rusagara, Deo Bamurase, Manasseh Simba, Alfred
Mutebwa and Callixte Kajangwe.

Kanimba said Ecobank will float 10 per cent of their shares in their
bank. Ecobank is the leading independent regional banking Group in
West and Central Africa serving wholesale and retail customers.

The bank has a network covering 18 countries namely: Benin, Burkina
Faso, Cameroon, Cape Verde, Central Africa, Ctte d'Ivoire, Ghana,
Guinea, Guinea Bissau and Liberia.

Others are Mali, Niger, Nigeria, Sao Tome, Senegal, Sierra Leone,
Tchad and Togo. It has plans to establish presence in more East and
Southern Africa countries.

According to information available on its website
(, the group has a network of over 320 branches and
offices established in the last nineteen years. The group refers to
itself as a Pan African Bank.

Rwanda's population will shoot to 18.2 million people by 2050 at an
average growth rate of 2.3 per cent, the United Nations Population
Fund (UNFPA) has projected.
Rwanda, according to UNFPA's state of the world population 2007
report, is second to Tanzania in the five-state East African
Community (EAC) with the lowest population growth rates.

Presently, Rwanda has a population of about 9.4 million people.
Burundi, at 3.7 per cent, has the highest growth rate followed by
Uganda (3.6 per cent), Kenya (2.6 per cent) and Tanzania has the
least at 1.8 per cent.
Rwanda, with a life expectancy of 43.3 and 46.2 years for male and
female respectively, is the lowest in the EAC.
Uganda leads in EAC region with a life expectancy of 50.7 and 52.3
years for male and female respectively.
In comparison, Africa's population will increase from 945 million
people to about 1,937 million in the same period at an average
growth rate of 2.1 per cent.
The report, released on Wednesday at Hotel African in Kampala,
Uganda, indicates that the EAC will have a population of an
estimated 321 million people by 2050, which expands the region's
market base that would comfortably encourage both foreign and
domestic investments.
Uganda is predicted to have the largest population by then with
about 127 million people.
However, the report warns that by 2008 more than half of the globe's
population (3.3 billion people) will be living in towns and cities.
"Urban population will grow to 4.9 billion by 2030. In comparison,
the world's rural population is expected to decrease by some 28
million between 2005 and 2030. Most of this growth will be in
developing countries," the report reads in part, but warns that the
vast urban expansion in developing countries has global
The bad news, UNFPA expressed, is that smaller cities generally have
more unaddressed problems and fewer human, financial and technical
resources at their disposal.
"Smaller cities (with 100,000 inhabitants) are notably underserved
in housing, transportation, piped water and waste disposal. In many
cases, poor urban people are no better off than poor rural people,"
UNFP says in its study, but adds that the burden would be grave for
women, who provide household's water, sanitation, fuel and waste
management needs.
UN says that urbanisation is caused by movement of people uprooted
by drought, famine, ethnic conflicts, civil strife and war.
It is further reported that hundreds of millions live in poverty in
the cities of low-and middle-income nations and that their numbers
would swell in the following years.
The report estimates that 40 to 50 per cent of urban population live
below poverty line in Burundi, Gambia, Kenya, Zimbabwe and Peru.
It adds that over half of the urban dwellers who live below the
poverty line can be found in Angola, Chad, Malawi, Zambia, Niger,
Sierra Leon and Mozambique.
Relevant LinksCentral Africa
Urban Issues and Habitation
International Organizations and Africa Slum population in
sub-Saharan Africa almost doubled in 15 years, reaching 200 million
in 2005. And because of the inhumane conditions in slum areas,
shelter deprivation has increased mortality rates in children less
than five years.
The report estimates that mortality rate of 180 per 1000 live births
occur in Rwanda, Ethiopia, Nigeria and Tanzania almost double that
in non-slum housing.
The study also warns of a rise in inter-personal violence and
insecurity particularly in urban areas of poorer countries.

Through the United Nations Development Fund, an Italian cooperation
is to earmark ,140,400 (approximately Frw103 million) to support
the local cooperatives operating in Nyagatare district, according to
the coordinator of the programme. Mr. Antoine Bigirimana disclosed
this Wednesday during a meeting with heads of cooperatives operating
in the districts.
"The Italian cooperation is planning to train the cooperative heads
in managerial skills to be able to run them in a professional
manner," Bigirimana said.

Over fourteen cooperatives will benefit after stiff screening to
get those best performing and will be given loans in the form of
revolving funds.
Among the local cooperatives expecting to benefit include K.o Ramba
and SUNA seeds. Others are not yet known.

Relevant LinksCentral Africa
Aid and Assistance
Europe and Africa
International Organizations and Africa
Sustainable Development
Food, Agriculture and Rural Issues The Italian cooperation has
other projects in the district, which include drilling 15 boreholes
in different sectors to improve water access, as well as in
telecommunications development.
Bigirimana noted that the primary aim, though, was to increase food
security in rural areas.
Secondary, though still vital, were income support; clean water, and
providing institutional support.


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