Interview: Bank Of Kigali CEO, Dr. Karusisi Speaks About COVID-19 Affects To Banking In Rwanda



What has COVID-19 done to us? The recent World Bank report says the pandemic is dramatically increasing poverty in both rural and urban areas. The headcount poverty rate is likely to rise by 5.1% points (more than 550,000 people) in 2021, compared to the no-COVID scenario.

The increase in urban areas is greater than the increase in rural areas, the report says. Lockdowns, and other measures, which were critical to limiting infections, sharply curtailed economic activities.

GDP in real terms fell by 3.6% (y-o-y) in the third quarter of 2020, following a 12.4% contraction in the second quarter. The government expects that GDP will fall by 0.2% for 2020, compared to a projected expansion of 8% before the COVID-19 outbreak.

While the pandemic affected all major sectors, education and Rwandan strategic sectors (travel and hospitality) declined the most.

For the banning sector, the Central Bank introduced an extended lending facility to support banks facing liquidity shortfalls, and other factors.

Banks remained in sound condition, based on the share of non-performing loans in their portfolios and capital risk-weighted assets ratio, but newly approved loans were 9.2% lower in October 2020 compared to the same period in 2019.

There is a view that large corporations have not been affected that much. Rwanda’s leading Bank, Bank of Kigali (BK), would be an ideal template to assess real effects of the pandemic.

BK’s CEO, Dr. Diane Karusisi spoke to Taarifa’s Chief Editor, Magnus Mazimpaka, about the banks experience and her views on what’s coming next.

Describe the nature of effects, materially, strategically and operationally, caused by Covid-19

Dr. Karusisi: The COVID crisis exacerbated all risks the Bank manages: Credit risk (risk of loss resulting from inability of clients to meet their commitments), market risk such as  liquidity and operational risks including risks of fraud, cybersecurity risks as most transactions move to digital. As a result, the Bank has significantly increased provisions for expected losses, which will heavily impact our financials.

In a tightly regulated industry like ours, with heavy procedures and processes reliant on paper and physical contact, operating effectively in a virtual environment has presented great challenges. We were able to speed up implementation of some projects to reduce/digitize physical touch points internally and with clients in a way that improves service delivery but also helps people comply with health measures. The crisis has reinforced our strategic drive to digital with a focus on connectivity, automation and innovation to reduce turnaround times and improve customer experience.

What lessons has the pandemic taught you, technologically in regards to banking….

Dr. Karusisi: The key lesson is that business continuity and resilience is not just a document/policy – banks like all other businesses need to up their preparedness in terms of technology, people, processes, and financial resources. Companies with better financial cushions and resilience will not only survive the crisis but will be the first to innovate and grow after the crisis. We entered the crisis with strong capital and liquidity ratios, and this has helped us weather the storm. Also, more than ever, we have realized that digital is not the future, it is the present! Going connectivity, digital education, and access to devices will be critically important for people to get access to all kinds of services: banking, health, education, entertainment, etc.

What are your new norms. What adjustments have you considered?

Dr. Karusisi: For many companies, remote meetings are now a norm, and signing/approving digitally documents. We’ve discovered that there are excellent solutions to support remote work and remote collaboration, and we expect to extensively use post COVID.

Now that many businesses have taken massive blows. Are you considering an overhaul in product offerings, financing structures, requirements ?

Dr. Karusisi: When the crisis hit, we waived late payment charges, restructuring fees to support businesses with uncertain cash flows. The Bank later provided relief in the form of moratoriums, refinancing and affordable working capital facilities availed by the Government’s Economic Recovery Fund. Finally, we have closed partnership with KFW and are supporting severely hit businesses with grant funding to protect employment.

In terms of product offering, it is obvious that the risk appetite has reduced and we are more cautious in our lending business. There are sectors that will see less financing like hospitality, commercial real estate but I believe agro processing and light manufacturing are going to see a boost, as we want to build resilience at national level.

Tech must have been a saviour of the tough times brought up by Covid-19. Tell us about the experience…were you prepared? What challenges did you encounter, how did you deal with them…what methods did you use…?

Dr. Karusisi: Nobody was prepared to this level of disruption.  At the Bank, we setup a COVID crisis committee that was meeting (virtually) every morning to assess the situation and make quick decisions. The first thing was to protect employees’ and clients’ health across the branch network. We had to offer extra support to our staff on the front lines, organize remote work to support our clients, and scale systems capacity to respond to the exponential surge in digital transactions. In the end, it is always about people and we will keep investing in people – skills, leadership – to build resilience to withstand shocks in the future.

Tell us what your predictions are, based on what you have experienced….

Dr. Karusisi: The level of disruption brought by COVID is such that it will result into profound changes in behavior/preferences of customers – at work, at school, at home, etc. Some pre-existing trends have been dramatically accelerated, such as e-commerce, cashless payments. I believe some new trends will emerge as people have become more health-conscious, less mobile… All industries will be impacted and it is important for us to recognize these trends early, adjust our business models and strategies.

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Rwanda’s Weekly Agro Exports Performance



Last week Rwanda shipped out various tonnes of horticultural products coffee and tea fetching an impressive amount of foreign revenue.

According to National Agricultural Export Development Board (NAEB) mandated to develop and enhance Rwanda’s agricultural exports, Last week Rwanda exported 255,298Kg of horticultural products which earned U$441,679.

Details show the Main Countries of destination of Rwanda’s horticultural products were mainly Holland, United Kingdom, DRC, Germany, among others including USA, UAE, France, Uganda, Belgium, Tanzania and Denmark.

A total of 431,107Kg of Rwanda Coffee worth U$1,383,622 was exported compared to previous week, export quantities and revenues increased by 86.2% and 83.9% respectively. 52.2% of the consignment was fully washed. Destinations: China, UK, Belgium, Russia, Kenya, South Sudan & Nigeria.

Meanwhile, 449,000Kg of Rwanda Tea  were exported generating U$1,146,118. Compared to last week, the average price slightly reduced from U$2.78/Kg to U$2.5/Kg. Main country buyers were Pakistan, and UK among others.

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Tanzania Unveils Aggressive Plan For Livestock



Tanzania has announced that it is seeking to revamp its livestock subsector with the aim of making it more profitable.

Dr. Jonas Kizima the Acting Director-General of Tanzania Livestock Research Institute (Taliri) said on Tuesday that Preliminary studies have discovered that most industries in the livestock products category are performing shoddily due to poor production and supply of raw materials.

The Tanzanian government said it is embarking on implementing a special five-year programme (2021-2025) to push for improvement of the livestock industry.

“The programme seeks to enable stakeholders in the beef and dairy cattle chains in all regions of to improve their performance by adopting better technologies and practices so that they can stand a professional chance to meet actual raw material demand in the livestock industry,” Dr. Jonas Kizima said.

Tanzania is therefore arguing that it is going to introduce and help livestock keepers across the country to raise hybrid animals, provide best animal health services, animal compounded and feeds, put in place animal husbandry infrastructure, improve milk handling, grazing systems and maintain good diary animal genetics.

“Inbreeding is the biggest technical challenge livestock keepers are facing- it is detrimental to livestock,” Dr Kizima noted.

The new agenda is in compliance with President John Magufuli’s directive issued to revive and promote animal industries for the next five years in the coastal East African country.

According to Concerns by Magufuli at least 90% of animal skins and skins produced in Tanzania were of very poor quality due to poor slaughtering methods.

Magufuli says he is seeking to motivate investors from within and outside the country to invest in meat industries, but also in leather production and other animal products such as hoofs.

Under this new program, Tanzania wants to construct seven major abattoirs in different regions with the capacity to slaughter at least 6700 cows and 11000 goats per day.

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Global Oil Prices Fall Ahead of OPEC Meeting



As the alliance of Oil producing countries under OPEC meet on Thursday, global oil prices have reportedly fallen according to sector experts.

Details indicate that the alliance is expected to loosen the taps after prices got off to their best ever start to a year.

But it’s unclear how robustly the group will act, with the Saudi Arabian energy minister calling for producers to remain “extremely cautious.”

The market continues to face risks in the near term. China’s Unipec was re-offering cargoes of April Angolan crude amid weaker sales.

Diesel demand in India was also down versus a year earlier amid record pump prices in the country. Both point to a limit on some of the recent firmness seen within the oil market.

“Now that oil’s back at $60, there’s going to be a push to wean off of those cuts,” said Stewart Glickman, energy equity analyst at CFRA Research.

“The question is how much are they going to bring back. The biggest risk is if supply presumes we’re back to pre-pandemic demand in 2021 and that turns out not to be the case.”

Still, there has been a raft of bullish calls in recent weeks predicting the rally will continue as the producer response trails consumption, while maintenance in North Sea fields is set to further reduce supply.

There are also some signs that demand is starting to pick up. U.S. gasoline demand jumped by 1 million barrels a day last week to 8.76 million barrels a day, a level comparable to March 2020 before the pandemic, according to Descartes Labs.

“People have become very optimistic about the ability of OPEC+ to manage a return to a balanced market,” said Michael Lynch, president of Strategic Energy & Economic Research.

The market continues to “see improved demand down the road and OPEC+ not oversupplying the market as they ramp up again.”

The Organization of Petroleum Exporting Countries and its allies must decide how much output gets restored — and at what pace — with current reductions amounting to just over 7 million barrels a day, or 7% of global supply.

The 23-nation coalition will choose whether to revive a 500,000-barrel tranche in April, and in addition, whether the Saudis confirm an extra 1 million barrels they’ve taken offline will return as scheduled.

Citigroup Inc. thinks the coalition will boost output by about 500,000 barrels a day next month, with Saudi Arabia unlikely to continue its voluntary curbs.

“A higher oil-price environment, an increasingly promising demand picture by summer, and the recovering but still growing U.S. oil production outlook for 2021 should give OPEC+ the confidence to slightly increase supply,” said Louise Dickson, an analyst at consultant Rystad Energy AS.

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