Gov’t to assess banks’ liquidity levels
Government, through the Central Bank, will assess the liquidity volumes in local banks, to determine whether it should proceed with injecting long-term capital, as a stimulus package to accelerate credit to the private sector.
The thinning liquidity in local commercial banks has put a tight grip on private sector access to long-term investment capital, prompting state intervention.
“According to their books of accounts (local banks), they have comfortable liquidity levels, but they keep telling us it’s for only short term lending,” Francois Kanimba, Governor of the National Bank of Rwanda (BNR) said.
The assessment will be conducted throughout the second half of this year.
Kanimba said it is the assessment that will determine if the banks need facilitation from government.
The decision to assess the banks follows a meeting between bankers and government that discussed challenges faced by the industry.
PSF expresses readiness for competition in Customs Union
Rwanda’s private sector through its umbrella body, the Private Sector Federation (PSF) has re-affirmed commitment to compete as Rwanda implements the East African Community (EAC) Customs Union.
Emmanuel Hategeka, PSF CEO said that stakeholders of the federation look forward to the competition in the Customs Union after implementation of the region’s lower common external.
He pointed out that Rwanda’s private sector has already “tasted” the competition under the Common Market for Eastern and Southern Africa (COMEASA) Free Trade Area’s (FTA) competitive regime.
“These two countries contribute close to 90 percent of our imports from EAC. We have to be innovative, build win -win partnerships with our counterparts in EAC for synergies and efficiency,” Hategeka explained.
Mineral water prices up 20 percent
Traders have increased mineral water prices by 20 percent to 3,000 from Rwf2, 500 per carton, while the country experiences a water shortage owing to the prolonged drought.
The addition of Rwf500 on a carton has led to Rwf100 increase on each bottle of water that is sold to the final consumer.
Francis Mugisha, Distributor of Inyange Industries Ltd products said that the current low mineral water supplies do not meet the high demand.
However, John Bosco Kanimba, acting Managing Director of Inyange Industries said they have also not cut their production levels.
“We are experiencing a problem of low capacity, because during this period (dry season) our products are on high demand yet our production remains the same.”
RRA recovers Rwf3 billion from smuggling, tax evasion
Rwanda Revenue Authority (RRA) has said that last year it recovered Rwf3.8 million that it had lost in illicit trade.
“The problem is not smuggling or tax evasion but the concept itself. It is something we need to fight,” Mary Baine, RRA’s Commissioner General.
According to information from the Revenue Protection Department (RPD), the illegal acts are attributed to the rapid growth of the informal sector where players seek for ways of maximising profits.
The RPD is responsible for minimising tax losses.
Baine is optimistic that the recent acquisition of two speed boats will facilitate its anti-smuggling campaign along Lake Kivu as well as increase recovery of revenues.
Silk production threatened by low cocoons
The low production of silk cocoons has forced L’Usine Textile du Rwanda (Utexrwa) to temporarily suspend production of silk garments, management has said.
Raj Rajendran, the company’s Managing Director said that the current production of silk cocoons cannot sustain the company’s production capacity.
“We need about 7.5 tonnes of cocoons per month to sustain our production capacity. But only 1.3 tonnes of cocoons that can be used in 3-4 days is produced,” he said.
“This leaves us with a deficit. We cannot produce if we can’t sustain the market yet we have not even received any returns for further investment and sustainability.”
Utexrwa the only textile industry in the country ventured into silk production last year with an initial investment of $900,000 (Rwf511.8 million).
The company is now planning to explore into silk yarn exportation in order to generate revenues that would cushion against anticipated losses.
EAC adopts Rwanda’s non-tariff barrier report
The East African Community (EAC) has adopted Rwanda’s report on the assessment of Non- Tariff Barriers (NTB) paving way for joint actions against such barriers.
The report conducted by Rwanda Private Sector Federation (PSF) last year, was adopted in a meeting of stakeholders from all the five EAC member states on June 26, in Arusha, Tanzania.
Emmanuel Rutagengwa, Policy Analyst at PSF said that the removal of non- tariff barriers would ensure compliance with the treaty of the Customs Union Protocol and other legal instruments, consolidate customs union implementation.
Fuel to rise again by 50 percent
Government is considering another 0 percent increase in fuel levy for the Road Maintenance Fund (RMF) from about Rwf40 to Rwf60 per litre of petro or diesel.
The Ministry of Trade and Industry (MINICOM) Permanent Secretary, Antoine Ruvebana said that it is the maximum charge proposed by government.
“It is also a commitment from government since 2005 and a covenant agreed with all development partners supporting the road sub-sector,” it reads.
In an interview, Linda Bihire, the Minister of Infrastructure said that the charge will be implemented within the next three months to avail enough funds for maintenance of roads.
“The initial maintenance fund of 1991 was negligible,” she explained.