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Viewing cable 07KIGALI633, RWANDA MONTHLY ECONOMIC REVIEW

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Reference ID Created Released Classification Origin
07KIGALI633 2007-07-09 15:29 2011-08-24 00:00 UNCLASSIFIED Embassy Kigali
VZCZCXYZ0000
RR RUEHWEB

DE RUEHLGB #0633/01 1901529
ZNR UUUUU ZZH
R 091529Z JUL 07
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC 4395
INFO RUEHNR/AMEMBASSY NAIROBI 0913
RUEHDR/AMEMBASSY DAR ES SALAAM 0904
RUEHJB/AMEMBASSY BUJUMBURA 0095
RUEHKM/AMEMBASSY KAMPALA 1640
RUEHFR/AMEMBASSY PARIS 0270
RUEHKI/AMEMBASSY KINSHASA 0240
RUEHDS/AMEMBASSY ADDIS ABABA 0118
UNCLAS KIGALI 000633 
 
SIPDIS 
 
SIPDIS 
 
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 
 
DEVELOPMENT PROJECTS / ISSUES 
--------------------------------------------- ---- 
 
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.. 
 
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 
development. 
The amount is part of the annual budget, targeting increases in 
viable projects and registered cooperatives in agribusiness and 
handicrafts. 
 
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 
assistance. 
 
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 
favoritism. 
 
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 
(www.ecobank.com), 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 
implications. 
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 
Rwanda 
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 
rths 
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 
Rwanda 
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. 
 
 
 
ARIETTI 
ETTI