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Cablegate: Rwanda Monthly Economic Review

VZCZCXYZ0001
RR RUEHWEB

DE RUEHLGB #0639/01 1911119
ZNR UUUUU ZZH
R 101119Z JUL 07
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC 4404
INFO RUEHNR/AMEMBASSY NAIROBI 0916
RUEHDR/AMEMBASSY DAR ES SALAAM 0907
RUEHJB/AMEMBASSY BUJUMBURA 0098
RUEHKM/AMEMBASSY KAMPALA 1643
RUEHFR/AMEMBASSY PARIS 0273
RUEHKI/AMEMBASSY KINSHASA 0243
RUEHDS/AMEMBASSY ADDIS ABABA 0121

UNCLAS KIGALI 000639

SIPDIS

SIPDIS

ADDIS FOR LBRODEY
DEPARTMENT FOR AF/C
DEPARTMENT PASS USTDA: UISZLER
DEPARTMENT PASS USTR: WJACKSON
DEPARTMENT PASS COMMERCE: RTELCHIN
DEPARTMENT PASS OPIC: BCAMERON

E.O. 12958: N/A
TAGS: EFIN ECON PGOV EINV ENRG ETRD EPET BTIO RW
SUBJECT: RWANDA MONTHLY ECONOMIC REVIEW

// NOTE: This telegram replaces/updates Kigali 00633. //

BUDGET SUPPORT
-------------------------
1. The British Department for International Development (DFID)
approved approximately USD 70 million for direct budget support to
Rwanda for 2007. This is part of the British government's increased
commitment to support the GOR in poverty reduction, maintaining
peace, stability and improving financial management and
accountability.
2. In a further demonstr
ation of the international community's trend
towards budget support, the Federal Republic of Germany pledged to
increase budgetary support to Rwanda from USD 30 million to USD 50
million.

ON THE WORLD STAGE
---------------------------------
3. Rwanda hosted the 2007 HIV/AIDS Implementer's Conference from
June 13-19 which including almost 2,000 delegates. Lauded as an
impressive success by most participants, the conference is the
second international conference Rwanda has hosted within a period of
four months. The first one this year was the International Women
Parliamentary Conference held on February 22-23 under the theme
"Gender, Nation Building and the Role of Parliaments."

4. On June 30, Rwanda hosted Kwita Izina, an annual baby gorilla
naming ceremony at Virunga National Park, the country's signature
tourist location. The ceremony, part of a larger effort to brand
Rwanda as a world-class tourist destination, raised money for the
park and attracted celebrities such as Jack Hanna and Natalie
Portman, Macy's CEO Terry Lundgren, and many dignitaries.

5. Rwanda enters the EAC. On June 18, in a signing ceremony in
Kampala, Rwanda and Burundi joined the EAC. (See SepTel.)

6. The GOR will open an Embassy in Sweden in the next few months.
Jacqueline Mukangira, an RPF member of the Chamber of Deputies, has
been nominated to become the Ambassador. She graduated from the
National University of Rwanda and worked for the Norwegian People
Aid (NPA) before joining the Parliament. Rwanda has not had
diplomatic representation in Scandinavia since 1994, although Oscar
Kiwanuka, current director general of ORINFOR, was appointed as the
Ambassador to Sweden in 1995. The appointment was eventually
rescinded for budgetary reasons. Sweden is the largest Scandinavian
donor to Rwanda, and the Embassy will also serve to help open more
markets to Rwandan exports.


DEVELOPMENT PROJECTS
-------------------------------------
7. The British Department for International Development (DFID)
launched a project called Science, Technology and Innovation for
Results (STIR) worth USD 1 million. The initiative will promote
science and technology in the country, assess what the country's
development needs with the goal of improving per capita income.

8. Mr. Jacque Roy, President and Director General of the Canadian
Consortium for Development in the Tourist and Hotel Sector in Africa
(CCDTHA), announced plans to build a USD 15 million four star hotel
in Kigali. In partnership with Merici College, CCDTHA will also
launch a tourism and hotel training college in August 2007. The
tourism and hotel training institute will be the first in Rwanda to
issue degrees to graduates.

9. The race for extracting methane gas from Lake Kivu continues to
attract international engineering firms. The GOR recently ended its
relationship with Dane Associates, cancelling the company's
concessionary rights to exploit the methane from Lake Kivu. Ludan
Technologies, an established Israeli firm that was subcontracted by
Dane Associates, continues work on the pilot project in direct
partnership with the GOR. The GOR recently awarded the Rwanda
Investment Group (RIG), in partnership with Echo Energy from Kenya
and several French and South African engineers, rights to exploit
the methane in Lake Kivu. RIG is currently negotiating with
Syntroleum, a US company, to potentially convert the methane gas
into liquid.


COMMERCIAL HIGHLIGHTS
---------------------------------------
10. Rwanda Investment and Export Promotion Agency (RIEPA) together
with private shipping company COIMEX exported 35 tons of assorted
food products to Oman. COIMEX also opened a distribution center for
Rwandan products in Oman. The consignment includes cow ghee, passion
fruit juice, sweet bananas, cassava flour, and chili. The decision
follows a larger GOR initiative to find markets in the Middle East,
most specifically in Egypt and the Gulf countries.

11. The entire Board of Directors of the Bank of Commerce,
Development, and Industry (BCDI) was charged with having led the
bank to financial ruin, having been added to the GOR's prosecution
of former BCDI CEO, Alfred Kalisa. As a sign of enhanced corporate
stewardship, this is the first time in Rwanda that directors of a
company, including a director representing RPF-controlled holding
company TRISTAR, are being held liable for the financial well-being
of a company.

12. West African Bank buys majority share in BCDI. The GOR
announced the purchase of a majority share of BCDI on June 29 by
ECOBANK, a Togo-based financial enterprise with branches throughout
West Africa. ECOBANK will assume the debts of BCDI and recapitalize
the bank. ECOBANK intends to expand its operations into East Africa
and Southern Africa. Several officers from ECOBANK's Ghanaian
operations will take day to day control of the bank. Their efforts
will be overseen by one ECOBANK's regional managers.

13. In a break from its 2006 ban on poultry imports, the GOR has
begun to import fast growing chicks from Malawi. Before the ban, a
local chicken cost USD 2 while it now costs USD 7. This initiative
aims to address the domestic scarcity and eventually reduce prices.

14. Ebony Enterprises, an Israeli firm, in partnership with Genesis
Limited, a local company, has introduced high-yielding animal feeds
and artificial semen from Israel to revolutionize dairy farming in
Rwanda. Genesis diary feeds can increase milk yield up to 10 liters
per day.

15. The booming construction industry and limited production
capacity of the Rwandan cement industry has raised the cost of
cement by 65 percent. The retail price of 50 kg of cement increased
from USD 13 to USD 20. The largest cement factory will soon shut
operations for planned expansion, further exacerbating the cement
shortage.

ARIETTI

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