Last week, the Serena played host to an Investment Forum, organised by the commonwealth business council in partnership with Rwanda development board.
This, an attempt to draw in ever larger amounts of investor dollars with the hope that in the long run they will help create some equilibrium in our Balance of Payments.
In an interview conducted by this very paper, Dr Mohan Kaul, the Head of the Commonwealth Business Council, announced that Opus Solutions, a firm based in India, had pledged an investment of $10 million to set up its Africa regional office for its electronic payment system right here in Kigali.
It was a welcome bit of news to be sure.
A torrid week on the International Markets had been dominated by the passage of austerity measures in the Greek parliament in order to receive a bail-out of $145 billion to alleviate its debts crisis. Scenes of protests in Athens, doubts on the effectiveness of this bail-out and the possibility of similar scenes in Portugal, Ireland, Italy and Spain [collectively with Greece referred to as ‘PIIGS’] caused the Dow-Jones index to fall for 3 consecutive days for the first time since January this year.
It appeared that the a nasty European strain of financial swine flu was holding the markets in its. This was even before the dramatic market movements of Thursday 6th May.
As far as can be determined, on 6th May at about 2.40pm, the Dow Jones Industrial Average experienced its largest intra-day fall [998.5 points] in its history.
The Securities and Exchange Commission [the American CMAC] last week stated that no single event on its own had caused this drop. Basically they had no idea why it had happened.
Was it a purchase of options contracts by a hedge-fund whose owner, Nassim Taleb, had incidentally written a book called ‘Black Swan: The Impact of the Highly Improbable’ stating that unlikely events on the markets are more probable than most people believe?
Was it the combination of a continuous market trend caused by Greek blues and exceptionally large volumes of trades? A conspiracy by the banks to thwart Obama’s proposed financial reforms? Or the fat fingers of a Wall Street trader who typed ‘m’ instead of ‘d’ into the High Frequency Trading supercomputer?
Predictably, the media latched onto the last option. Why wouldn’t they? It makes for far more interesting reading. One stroke of a key and the market lost nearly $1 trillion of market capital. All in a few milliseconds!
What a story! Fortunately, for everyone, the markets rebounded within the 10 minutes, recovering 650 points.
Despite the over-sensationalist focus on the technical glitch angle there does appear to be some merit in the questions raised especially in a country like ours.
In the last few weeks there have been problems with Rwandatel’s SEACOM connections that disrupted the operations of several banks. There was a fire at SIMTEL and ATMs stopped working.
With an Electronic Payment System to be stationed in Kigali, it is perhaps an opportunity for our brainiacs to think of protections in case of technical glitches as well as for IT specialists to research on solutions to potential electronic problems.
Oscar Kabbatende is a lawyer