VZCZCXYZ0014
RR RUEHWEB

DE RUEHLGB #1145/01 3610918
ZNR UUUUU ZZH
R 270918Z DEC 07
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC 4991
INFO RUEHNR/AMEMBASSY NAIROBI 1102
RUEHDR/AMEMBASSY DAR ES SALAAM 1031
RUEHJB/AMEMBASSY BUJUMBURA 0213
RUEHKM/AMEMBASSY KAMPALA 1790
RUEHFR/AMEMBASSY PARIS 0391
RUEHKI/AMEMBASSY KINSHASA 0347
RUEHDS/AMEMBASSY ADDIS ABABA 0147

UNCLAS KIGALI 001145 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR AF/C 
DEPARTMENT PASS USTDA: EEBONG 
DEPARTMENT PASS USTR: WJACKSON 
DEPARTMENT PASS COMMERCE: RTELCHIN 
DEPARTMENT PASS OPIC: BCAMERON 
ADDIS FOR LISA BRODEY 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PGOV EINV ENRG ETRD EPET BTIO RW
SUBJECT: RWANDA MONTHLY ECONOMIC REVIEW 
 
REF:  KIGALI 1016 
 
DONOR SUPPORT 
------------------------ 
 
¶1.  Loans:  The International Finance Corporation (IFC) and 
Germany's KfW Banking Group have signed a deal with the Aga 
Khan Fund for Economic Development (AKFED) to invest USD12 
million to rehabilitate, expand and finance a 30-year lease 
of the Kigali Serena and the Lake Kivu Serena hotels. 
"IFC's investment reflects our commitment to supporting 
Rwanda's nascent tourism industry," the IFC representative 
said. 
 
¶2.  Aid:  USD 5.2 million program extension.  The 
government of Japan will extend a grant program that 
assists with Rwanda?s import-export imbalance and further 
develops its rural roads.  Under the program, the 
Government of Rwanda (GOR) make purchases from a pre- 
approved list of 106 items, including petroleum and leather 
materials, which the government then resells.  The proceeds 
of the sale are used to improve Rwanda?s rural roads 
network. 
 
MACRO ECONOMIC INDICATORS 
--------------------------------------------- - 
¶3.  2008 Budget:  Lawmakers passed the 2008 government 
spending plan with an increase of approximately USD 2.9 
million from Finance Ministry submissions.  The 2008 budget 
now totals USD 1.2 billion, with spending up by 18 percent 
from the previous year (the Finance Ministry had asked for 
a 15 percent increase).  The three percent increase will go 
to rural development projects and public finance oversight 
programs.  Donors will fund up to 54 percent of the total 
budget. 
 
COMMERCIAL NEWS 
----------------------------- 
 
¶4.  Rwanda and China: Chinese firm ?Star Communication 
Network Technologies? announced a USD 20 million investment 
in pay-TV and internet provision.  A multi-million phone 
sets assembly plant also plans to invest in the country. 
 
Note:  In 2006, the two countries total trade was USD 34.5 
million.   The Chinese General Administration of Customs 
recently reported that imports from Rwanda increased by 89 
percent to USD 22 million in 2006 (mainly minerals).  China 
exported USD12.5 million to Rwanda in 2006, a 3.3 percent 
change from 2005.  With trade increasing, the Kigali 
Institute of Education is beginning a Chinese language 
program for Rwandan students and businessmen. 
 
¶5.  Methane gas:  Gee-ten Ventures Inc, a Canadian mining 
company based in Quebec, is now in the country to continue 
negotiations with the Rwandan government for possible 
investment in the methane gas business.  A previous 
Memorandum of Understanding on methane extraction from Lake 
Kivu has expired. 
 
¶6.  Mobilizing local investors:  To foster development in 
the southern province, provincial officials and the Rwandan 
Chamber of Commerce recently garnered pledges of over USD 
3.6 million towards the launch of the Southern Province 
Investment Corporation (SPIC).  The corporation will 
spearhead investments in cassava plantations, tea 
processing and manufacture of pharmaceuticals.  Provincial 
districts are expected to raise jointly approximately USD 
275,000 as part of their contributions to the corporation. 
 
¶7.  Dubai World Investment: The Government of Rwanda is 
engaged in obtaining 100 hectares of land from property 
owners near Kigali Golf Club for a Dubai World facility for 
upscale tourists, consisting of luxury townhouses, a five- 
star hotel and golf course. Chairman of Dubai World Sultan 
Ahmed bin Sulayem announced that architectural design has 
begun (see reftel). 
¶8.  Electronic banking:  SIMTEL, Rwanda's national 
electronic transaction provider that links all commercial 
banks' automated teller machines (ATMs) and most 
businesses? debit card systems, has entered into a joint 
venture partnership with the African Development 
Corporation (ADC) consortium, led by XCOM, an IT firm from 
Germany specializing in electronic banking.  The USD 3.5 
million deal gives the consortium a majority stake in 
SIMTEL and control of the company.   The investors hope to 
make Simtel a third party processor (TPP) certified for 
international transactions.  The investors will also bring 
other electronic-based banking products and solutions, 
further enhancing ICT development in Rwanda in the area of 
payment technology.   (Note: SIMTEL is a privately owned 
company with the National Bank of Rwanda (BNR) and the six 
licensed commercial banks in the country as shareholders). 
¶9.  Cement:  The Rwanda Investment Group is planning to 
build a second cement factory to help address a shortage 
brought on by the recent construction boom.  The consortium 
of mainly local investors announced plans to construct the 
factory next year, at a cost USD 25 to 35 million, 
producing more than 20,000 tons of cement annually.  Cement 
demand is currently exceeding supply despite imports from 
the Ukraine and China. 
 
¶10.  Coffee: The volume of coffee produced in Rwanda may 
reach 37,000 tons by the year 2010.  Export statistics from 
OCIR-Cafe, Rwanda?s coffee regulatory authority, indicate 
that out of 15,461 tons exported through November 2007, 
12,261 tons were semi-washed.  OCIR-cafe is promoting the 
production of specialty or fully-washed coffee.  With the 
assistance of USAID, construction of coffee washing 
stations began in 2004.  Last year, the country had 76 
washing stations; this year an additional 48 stations were 
built for a total of 124.  Three laboratories to ensure 
coffee quality have also been built and are in operation. 
(Note: one kilogram of semi-washed coffee sells for about 
USD 2.00 in New York wholesale markets; fully washed coffee 
sells for an average USD 7.00 per kilogram wholesale). 
 
SIM