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Partnership With Private Sector Key In Closing Rwanda’s Infrastructure Gap

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The latest World Bank Rwanda Economic Update notes that private infrastructure financing will have to increase sharply from its current share of about one-third of total infrastructure commitments.

This will be critical for the country to achieve her development ambitions, the report says, to reduce debt levels and reach the Sustainable Development Goals. 

The analysis, The Role of the Private Sector in Closing the Infrastructure Gap, says infrastructure investment will have to rise by 8.4% of the gross domestic product (GDP) from 2019–24 to meet the government’s goal of 6.5% annual real GDP growth, and to achieve the SDGs. 

Rwanda has had a high rate of public investment over the past few years equaling 13% of the gross domestic product (GDP) in 2019.

The country’s share of public sector capital expenditures in GDP from 2015 to 2018 was higher in Rwanda than in most East African countries.

The report predicts that Rwanda needs increased private sector investment in infrastructure to obtain sufficient resources to close the infrastructure gap.

The report also observed that if the increased infrastructure investment required to meet the SDGs is met by grants, foreign grants would need to increase between two to three times their levels in the baseline in each year, which, the report warns, is not realistic.

This would also see the tax hikes, increase of tax revenues from 14% of GDP in 2040 in the baseline to 22% of GDP, which is also unrealistically high.

Increasing infrastructure investment through domestic revenue mobilization yields lower outcomes for households and the economy as a whole compared to grants and private sector financing sources, because higher taxes tend to reduce the domestic savings available for productive private investments.

Private sector potential

According to the report, there is potential in Rwanda’s private sector as commitments into infrastructure (as a percent of GDP) have been higher than those of regional structural comparators and have been close to the best performers of the regional aspirational comparators. 

Total foreign direct investment (FDI) inflows rose from $119 million (2.2% of GDP) in 2009 to $420 million (4.1% of GDP) in 2019.

Inflows as a share of GDP exceeded the level in Rwanda’s structural comparators and were higher than the Sub-Saharan Africa average.

Most private sector participation in infrastructure in Rwanda has been in the form of Public Private Partnerships (PPPs), which the report notes that the country’s track record in PPPs shows that the institutional and regulatory framework has been working.

The new PPP framework approved in 2016 has successfully delivered more than 24 PPPs in ICT, energy, transport and logistic, hospitality, and housing, generating a total infrastructure investment of more than US$900 million.

How can Rwanda improve private sector’s contribution to close infrastructure gaps?

Taking into account Rwanda’s unique opportunities and challenges, the Rwanda Economic Update recommends the following actions to increase the role of private sector in closing the infrastructure gap:

  • Maintain public debt at sustainable levels to reducing the country’s vulnerability to external shocks and preserve country risk
  • Improve the efficiency of public investment
  • Further strengthen the regulatory framework to promote private sector participation is essential
  • Limit the initiation of PPP projects via unsolicited proposals. 
  • Building a robust, multisector PPP projects pipeline, targeting sectors with clearly identified service needs
  • Capitalize further on Rwanda’s FDI regulatory framework to attract and retain more FDIs
  • Set up a strategy to foster domestic private capital mobilization
  • Put emphasis on rural and agriculture related infrastructure to accelerate inequality and poverty reduction

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Airtel Rwanda Partners With Canal+ To Ease Payment Of Subscription Fees Via Airtel Money

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Airtel Rwanda and Canal+ Rwanda have launched a partnership, enabling customers to easily make subscription payments.

The partnership announced at a joint press conference today provides clients of both CANAL+ and Airtel a simpler, instant and secure payments method using Airtel Money.

CANAL+ Rwanda is the subsidiary of CANAL+INTERNATIONAL, TV operator by satellite in Africa and present in over  25 African countries.

CANAL+ Rwanda have a trilingual package with 200 channels in French, Kinyarwanda and English and it offers accessible bouquet starting from 5,000 Francs with a distribution network throughout the country.

Speaking at the launch event, Airtel Rwanda Managing Director, Mr. Emmanuel Hamez said “We are delighted to launch this new service on our Airtel Money platform we welcome all Canal+ customers to enjoy the convenience and simplicity offered by Airtel Money both on the USSD as well as in the My Airtel App”.

The new service that was launched today comes on the heels of an ongoing Airtel Money campaign called Free P2P which enables all Airtel Money customers to send and receive any amount of money for FREE.

“Free P2P or Ohereza Amafaranga Ku Buntu was launched in June 2021 saw Airtel scrap all charges to send and receive money between customers, a major differentiator that positions Airtel Money to become the provider of choice when it comes to payment of good and services such Canal+ that we have launched today” added Hamez.

Canal+ Rwanda’s Managing Director, Madam Sophie TCHATCHOUA said “It gives me great pleasure to allow Canal+ client to renew their subscription with Airtel Money. The successful integration of our mutual services makes life easier for our beloved customers who can now recharge and seamlessly have their images back and all this can be done from the comfort of their home”.

To renew your subscription via Airtel Money, customers can simply dial the direct short code string *500*4*3*2*4*1# on either their smartphone on feature phone, input their 14 Digit of their decoder  number, select their preferred bouquet and make the payment which is recognized by the Canal+ billing system instantly.

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Hundreds Of Passengers Miss Flight In Uganda Due To Delayed COVID-19 Tests

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Hundreds of Ugandans have been left stranded at Entebbe International Airport by the Emirates Airways after the laboratory where they had taken their Covid-19 results delayed to return them on time.

In a Snapchat post by Ugandan socialite Sheila Gashumba, she ranted, ‘’When I tell Ugandans that Covid in Uganda is a business they say I have ‘kajanja’.

Now all Emirates passengers have missed their flights because Safari Lab sent Covid results at 2:45pm and Emirates closed its gate at 3pm.

The hospital said it couldn’t work on everyone in the short time.

Around 300 passengers missed their flight yet Safari Lab had made a total of UgSh75m since everyone had paid UGX 250,000 for the test.

In the video where all passengers were visibly angry and frustrated, they can be heard asking for what the solution is and who is going to pay for the tickets again now that those that they had paid for can no longer be used anymore.

Passengers expressed their frustration at the rot in the service.

“I experienced such thing in March as the officers in charge claimed that the gates were close at 1pm as the flight was at 3pm,” one twitter user said.

Some made jokes out of it and asked, if this was because of the US$10 tax that is in the process of being introduced and will be paid by anyone that leaves the country using the Entebbe International Airport.

Another twitter user @kasoxialex2000 asked, ‘’@UgandaCAA (Uganda Civil Aviation Authority), but seriously you guys when you move to some airports don’t you copy something? Why are we ever backwards??? Stop embarrassing us. Who will save Uganda’’
By press time there was no official communication from the Civil Aviation Authority, Safari Lab nor Emirates Airways.

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Kagame Tells Bankers, Banking Can’t Just Be “Service For Elites”

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Banking can’t just be a service for elites, President Paul Kagame has said.  He made the remarks while speaking at the 14th Annual Banking and Finance Conference in Nigeria that he attended virtually.

Running under the theme, ‘’Economic Recovery, Inclusion and Transformation: The Role of Banking and Finance’’, the two-day conference will aim at the need to reposition the Finance and Banking sector as a catalyst for Economic recovery, transformation and inclusive growth.

In his remarks, he noted how the Covid pandemic has affected every aspect of Africa’s economies but at the same time also presents an opportunity for African banks to play a leading role in making societies more resilient and more responsive to the needs of Africans.

‘’Whatever affects business, affects banking. Financial services are the engine of private sector development. Banks are crucial for allocating capital wisely and productively,’’ he further added.

President Kagame noted that, in order to stay competitive, there is need to keep integrating new technology into banking to increase financial inclusion and access as banking can’t just be a service of elites.

He also went ahead to reemphasize what he has always said when it comes to African states always depending on the West and other countries for support. ‘’Indeed, Africa has the resources to fund its own economic growth and reduce dependence on external resources,’’ he said.

Kagame also noted that the African Continental Free Trade Area is creating new opportunities for Pan African Trade and investment. ‘’Banks with continental reach, like several of the institutions represented here can lead the way in cementing economic integration.’’

As he concluded, he stated how the banking sector, more than any other, understands the importance of integrity and good customer service. ‘’Banking is ultimately about trust. We look to you to set the pace in this regard. Our role as governments is to maintain good enabling environments, protecting both shareholders and customers while allowing for innovation. We expect you to keep challenging us on this,’’ he said.

In attendance at the same conference was the Central Bank of Nigeria Governor Edwin Emefiele who made a huge announcement.  He said, ‘’Central Bank, will, in the next twelve months be establishing the Nigerian International Financial Centre (NIFC). The NIFC will act as an international gateway for capital and investments, driven by technology and payment system infrastructure.’’

In Rwanda, current statistics show that even though there are still various challenges that continue to put women behind men when it comes to financial inclusion, the number of women who are currently banked have risen from 24% in 2016 to 34% in 2021.

This is according to a FinScope 2020 Gender thematic report on the state of women financial inclusion in Rwanda that was supported by Access to Finance Rwanda (AFR).

In one of the Focus Notes from Access to Finance Rwanda, farmers reported that women and men enjoy equal rights and treatment at specified two Financial institutions in the Focus note and therefore no special gender based treatment yet the outcomes of each groups are not equal.

At both Financial Institutions, women and youths are more likely to use loans to hire land farm as they lack access to land and they have been assisted by addressing some of the barriers that women and youth face in accessing loans.

The conference will therefore focus on how banking can be a service enjoyed by all Africans regardless of their financial strengths through making access to finance for development is an easy and smooth process.

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