| RWANDA |
Economy:
Rwanda is a poor rural country with about 90% of the population engaged in (mainly
subsistence) agriculture and some mineral and agro-processing. Tourism is now Rwanda's
primary foreign exchange earner and in 2008, minerals overtook coffee and tea as
Rwanda's primary export. Minerals exports declined 40% in 2009-10 due to the global
economic downturn. The 1994 genocide decimated Rwanda's fragile economic base,
severely impoverished the population, particularly women, and temporarily stalled the
country's ability to attract private and external investment. However, Rwanda has made
substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels. GDP
has rebounded with an average annual growth of 7-8% since 2003 and inflation has been
reduced to single digits. Nonetheless, a significant percent of the population still live below
the official poverty line. Despite Rwanda's fertile ecosystem, food production often does
not keep pace with demand, requiring food imports. Agricultural production has increased
significantly over the last three years and last year Rwanda was self sufficient in food
production. Rwanda continues to receive substantial aid money and obtained IMF-World
Bank Heavily Indebted Poor Country (HIPC) initiative debt relief in 2005-06. In recognition
of Rwanda's successful management of its macro economy, in 2010, the IMF graduated
Rwanda to a Policy Support Instrument (PSI). Rwanda also received a Millennium
Challenge Threshold Program in 2008. Africa's most densely populated country is trying to
overcome the limitations of its small, landlocked economy by leveraging regional trade.
Rwanda joined the East African Community and is aligning its budget, trade, and
immigration policies with its regional partners. The government has embraced an
expansionary fiscal policy to reduce poverty by improving education, infrastructure, and
foreign and domestic investment and pursuing market-oriented reforms. Energy shortages,
instability in neighboring states, and lack of adequate transportation linkages to other
countries continue to handicap private sector growth. The Rwandan government is
seeking to become regional leader in information and communication technologies. In
2010, Rwanda neared completion of the first modern Special Economic Zone (SEZ) in
Kigali. The SEZ seeks to attract investment in all sectors, but specifically in agribusiness,
information and communications technologies, trade and logistics, mining, and
construction. The global downturn hurt export demand and tourism, but economic growth is
recovering, driven in large part by the services sector, and inflation has been contained.
On the back of this growth, government is gradually ending its fiscal stimulus policy while
protecting aid to the poor.
GDP (purchasing power parity):
$12.16 billion (2010 est.)
country comparison to the world: 142
$11.42 billion (2009 est.)
$10.97 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$5.622 billion (2010 est.)
GDP - real growth rate:
6.5% (2010 est.)
country comparison to the world: 45
4.1% (2009 est.)
11.2% (2008 est.)
GDP - per capita (PPP):
$1,100 (2010 est.)
country comparison to the world: 209
$1,100 (2009 est.)
$1,100 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 42.1%
industry: 14.3%
services: 43.6% (2010 est.)
Exports - commodities:
coffee, tea, hides, tin ore
Exports - partners:
Kenya 33.88%, Democratic Republic of the Congo 13.56%, Thailand 6.22%, China 5.49%,
US 5.47%, Swaziland 5.43%, Belgium 5.19% (2009)
Imports - commodities:
foodstuffs, machinery and equipment, steel, petroleum products, cement and construction
material
Imports - partners:
Kenya 16.53%, Uganda 14.92%, China 7.92%, UAE 6.89%, Belgium 5.54%, Germany
5.19%, Tanzania 4.81%, Sweden 4% (2009)
Extracted from IMF Report: Rwanda: Poverty Reduction Strategy Paper—
Progress Report (June 2011)
Macro and financial sector
Growth performance in 2008 was higher than the projected rate of 8.5 percent at 11.5
percent. This growth was driven by a rebound in agriculture and continued buoyancy in
the industry and services sectors.
In the fiscal year 2009/10, GDP at current prices was estimated to be Rwf 3,160 billion up
from Rwf 2,843 billion in the year ending June 2009. In this fiscal year, the population of
Rwanda was estimated at 10.2 million people. GDP per head was therefore Rwf 308,000 or
US$ 541 at the nominal exchange rate of Rwf 569 to 1 US dollar.
The GDP estimates calculated at constant 2006 prices show that in 2009/10 the GDP was
6.2% higher in real terms than it was in 2008/09. This follows an increase of 9.8% from
2007/08 to 2008/09. This growth rate is mainly attributed to growth of 5.9% in agriculture
(mainly driven by a 7% increase in the food crop production), and 7.6% for services (in
which public administration grew by 10% and business services by 13%). The industry
sector registered a modest growth of 0.6% as the sector that was most affected by
the global recession and the domestic liquidity crunch.
There was an expansion in credit to the private sector which grew to 14% percent
of GDP by end-2008. In the year 2009/10, taking into account potential effects of
the domestic liquidity crunch, the Government was targeting credit to private sector of
12.2% of GDP (reduced from 14% in 2008), however, this was not achieved.
Revenue in 2008 outperformed the projections by RWF 52 billion reflecting increased
collection, higher inflation and GDP growth as well as large one-off non-tax revenue
earnings. In 2009/10, total domestic revenue collections were RWF 391.5 billion
(12.4 % of GDP), it exceeded the revised projected amount of RWF 385.1 billion
by about RWF 6.4 billion. Higher collections from direct taxes and some indirect taxes
offset shortfalls under taxes on international trade and non tax revenues. Collections from
PAYE contributed the largest share of the excess under direct taxes whilst collections
from consumption taxes notably VAT was the main contributor to the excess under
taxes on domestic goods and services. PAYE and VAT taxes continue to provide the
largest shares of domestic revenue collections. In fiscal year July 2008/June 2009, these
two categories of taxes contributed about 56% of tax revenue. In the fiscal year July
2009/June 2010, the share rose to about 59%. This development is in line with
Government policy to get the well-off in society to provide a larger share of
resources for the development of the country as envisaged in the EDPRS.
Exports of goods and services also fell by 9%, while the rate of increase in imported goods
and services slowed to 7% from 17% in 2008/09. In 2008, revenue from strategic exports
obtained was USD 185 million exceeding the target of USD 163 million and
revenue from tourism activities also increased to USD 208 million from a target of USD 56
million. More recently, in 2009/10, these two targets have been missed as an impact
of the global slowdown on the economy; they ware respectively of USD 164 million
(against a target of USD 198 million) for strategic exports and of USD 182 million (against
a target of USD 208 million) for tourism.
The only target that was not met in 2008 was the annual end year average inflation which
reached double figures at 15.4% compared to a single digit target that was set.
The acceleration in inflation arose from; high international commodity prices and
domestic pressures from rising prices of food and non-alcoholic beverages. However,
the inflation showed signs of stabilizing towards the end of the year with an increase
of only 0.7% between September and December 2008.
The inflation rate declined overall from 22.3% in December 2008 to 10.1% in
June 2009 and continued to be low in 2010 and the annual change stood at 5.03% by
end-June 2010 compared to 9.4% at the end of June 2009 (an annual average of 4.8%).
Click here to read full report
Executive Summary extracted form IMF Report - Rwanda: Financial System
Stability Assessment (August 2011)
Rwanda was little affected by the global financial crisis but, like its neighbors
in East Africa, is in the process of transition towards a more modern, competitive,
open and inclusive financial system. Following the 2005 FSAP, significant progress has
been made in restructuring and modernizing the financial sector and its legislative and
regulatory framework, in the context of an extensive Financial Sector Development Plan
(FSDP).
The National Bank of Rwanda (BNR) is now the sole regulator and supervisor for the
entire financial sector, except securities markets. By law it is granted independence in its
operations and conduct of policy, though some aspects of its independence could be
reinforced. Beyond the legal amendments, the BNR has improved its supervisory practice,
conformed more to international best practices, strengthened enforcement, and taken
intervention actions deliberately. The BNR still has capacity constraints and can further
strengthen some of its regulations and supervisory processes.
Both the government and the BNR have shown determined leadership over several years
in pursuing the necessary reforms. These reforms have helped to improve the structure
and operation of the banking as well as the insurance and pensions sectors; to
modernize the system infrastructure (monetary operations, payments systems, land and
mortgage registration, insolvency and creditor rights); and to strengthen the framework for
monitoring and mitigating systemic risk. However, continued efforts are required in
following up and transiting to the next generation of reforms.
At the same time, the financial sector faces new challenges and changes affecting financial
development and stability going forward. These reflect the authorities’ stated priorities to
achieve visible progress in improving access to financial services and in the provision of
long-term financing to the economy. Rwanda also faces an ambitious agenda with its
commitment as a member of the EAC to further regional economic, financial and monetary
integration, with the ultimate objective of establishing a monetary union.
Both the domestic and regional financial sector policy agendas are very
demanding. The authorities’ desire to make rapid progress is commendable, but there are
significant risks in moving too fast or not sequencing the steps appropriately. For example,
creating new depository institutions before establishing an adequate supervisory system
can create a situation where non-viable entities are not closed but still accept deposits
from the public. In this context, the problem posed by the considerable capacity
constraints for qualified personnel in financial institutions and in financial sector
supervision cannot be overstated.
The banking system in Rwanda has recovered from a period of restructuring in 2007 and
2008, leaving banks now better capitalized, provisioned, and liquid, but still exposed to
some risks. On the whole, banks—by far the largest providers of finance in the system—are
sufficiently capitalized to absorb a shock to their credit portfolio, but some banks exhibit
more vulnerabilities than others. This includes large exposure risks due to the
concentration of corporate lending. Also—while all banks operate well within the liquidity
requirements set by the BNR—a few banks are vulnerable to an extreme drop in deposits.
However, the BNR’s track record of dealing with emerging problems suggests that these
vulnerabilities are manageable. Market risks do not appear to be a major concern, neither
with regard to foreign exchange (FX) risk nor interest rate risk.
While the core banking system has been stabilized and strengthened, new risks are
emerging at the periphery. To accelerate the intermediation in the rural areas, the
authorities have recently established savings and credit cooperatives in each of the
416 geographically defined sectors of Rwanda—Umurenge Savings and Credit
Cooperatives (SACCOs). This created a significant void and to address it, the BNR is in
the process of recruiting supervisors for these SACCOs at the district level. However, not
only will these supervisors need to be trained in the near term, the BNR will also need to
quickly address the challenge of supervising institutions which themselves lack capacity
and essential skills in small-scale banking and managing risk. Furthermore, experience in
other countries has shown that—to be successful—such bank cooperatives require
ownership and trust among the people for whom they were created. Over the medium-
term, the most promising way to foster both ownership and a sustainable structure for the
SACCO sector, and ease the supervisory burden of the BNR, would be the formation of an
apex institution (without banking functions) owned by the SACCOs. This apex institution
should provide training and capacity enhancement to its member institutions and also
ensure that the members fulfill their regulatory requirements.
The mobilization of more long-term stable financing for the real economy continues to be
another major challenge, given the small and underdeveloped local capital market. The
banks are already exposed to the risks posed by the large maturity gap between their
assets and liabilities, so encouraging them to increase long-term lending without a more
stable funding source would only aggravate these risks. At the same time, there is
increasing demand for opportunities to invest in longer-term financial assets by the
insurance and pensions sector, in particular the Caisse Sociale du Rwanda (CSR). But the
development of a primary and secondary corporate bond market is likely to be achieved
only over the medium-term and facilitated by the EAC financial integration process.
Against this background, appropriately matching the financing, funding and investment
needs of the different sectors in the near term would best be achieved by the creation of a
market-based mechanism that allows the channeling of long-term funds accumulated by
the CSR, other pension funds and life insurance companies into the banking system, for
example via auctioning term deposits.
The authorities are encouraged to vigorously continue their program of financial sector
modernization. A structured plan for accomplishing existing tasks and preparing for the
next phase could form the basis of the second generation of Rwanda’s FSDP. The key
recommendations of the mission are in the table below. More detailed recommendations
can be found in the following sections of this report including the Report on the
Observance of Standards and Codes (ROSC) for the Basel Core Principles (BCP) for
Effective Banking Supervision in the appendix. In addition Technical Notes are being
prepared for the authorities on access to finance, banking structure and competition,
housing finance, insolvency and creditor rights, intermediating term finance, payments
systems, and stress testing.
Click here to view full report
Banking
Local banks operate in both local currency and dollar-based accounts. Starting in 2008,
a capital requirement was fixed at $9.2 million. All commercial banks have international
correspondent banks operating in major cities of the world. Automatic Teller Machines
(ATM) are available, but still limited to local transactions. Commercial banks are
authorized to provide loans in foreign currency. The government has recently
implemented a financial sector development plan that improves access to financial
services and competition in the banking sector and in micro-finance.
Stock Exchange
In 2011 the government launched the Rwanda Stock Exchange in order to facilitate
trading of equities and improve capital mobilization in the private sector.
Rwanda is a poor rural country with about 90% of the population engaged in (mainly
subsistence) agriculture and some mineral and agro-processing. Tourism is now Rwanda's
primary foreign exchange earner and in 2008, minerals overtook coffee and tea as
Rwanda's primary export. Minerals exports declined 40% in 2009-10 due to the global
economic downturn. The 1994 genocide decimated Rwanda's fragile economic base,
severely impoverished the population, particularly women, and temporarily stalled the
country's ability to attract private and external investment. However, Rwanda has made
substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels. GDP
has rebounded with an average annual growth of 7-8% since 2003 and inflation has been
reduced to single digits. Nonetheless, a significant percent of the population still live below
the official poverty line. Despite Rwanda's fertile ecosystem, food production often does
not keep pace with demand, requiring food imports. Agricultural production has increased
significantly over the last three years and last year Rwanda was self sufficient in food
production. Rwanda continues to receive substantial aid money and obtained IMF-World
Bank Heavily Indebted Poor Country (HIPC) initiative debt relief in 2005-06. In recognition
of Rwanda's successful management of its macro economy, in 2010, the IMF graduated
Rwanda to a Policy Support Instrument (PSI). Rwanda also received a Millennium
Challenge Threshold Program in 2008. Africa's most densely populated country is trying to
overcome the limitations of its small, landlocked economy by leveraging regional trade.
Rwanda joined the East African Community and is aligning its budget, trade, and
immigration policies with its regional partners. The government has embraced an
expansionary fiscal policy to reduce poverty by improving education, infrastructure, and
foreign and domestic investment and pursuing market-oriented reforms. Energy shortages,
instability in neighboring states, and lack of adequate transportation linkages to other
countries continue to handicap private sector growth. The Rwandan government is
seeking to become regional leader in information and communication technologies. In
2010, Rwanda neared completion of the first modern Special Economic Zone (SEZ) in
Kigali. The SEZ seeks to attract investment in all sectors, but specifically in agribusiness,
information and communications technologies, trade and logistics, mining, and
construction. The global downturn hurt export demand and tourism, but economic growth is
recovering, driven in large part by the services sector, and inflation has been contained.
On the back of this growth, government is gradually ending its fiscal stimulus policy while
protecting aid to the poor.
GDP (purchasing power parity):
$12.16 billion (2010 est.)
country comparison to the world: 142
$11.42 billion (2009 est.)
$10.97 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$5.622 billion (2010 est.)
GDP - real growth rate:
6.5% (2010 est.)
country comparison to the world: 45
4.1% (2009 est.)
11.2% (2008 est.)
GDP - per capita (PPP):
$1,100 (2010 est.)
country comparison to the world: 209
$1,100 (2009 est.)
$1,100 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 42.1%
industry: 14.3%
services: 43.6% (2010 est.)
Exports - commodities:
coffee, tea, hides, tin ore
Exports - partners:
Kenya 33.88%, Democratic Republic of the Congo 13.56%, Thailand 6.22%, China 5.49%,
US 5.47%, Swaziland 5.43%, Belgium 5.19% (2009)
Imports - commodities:
foodstuffs, machinery and equipment, steel, petroleum products, cement and construction
material
Imports - partners:
Kenya 16.53%, Uganda 14.92%, China 7.92%, UAE 6.89%, Belgium 5.54%, Germany
5.19%, Tanzania 4.81%, Sweden 4% (2009)
Extracted from IMF Report: Rwanda: Poverty Reduction Strategy Paper—
Progress Report (June 2011)
Macro and financial sector
Growth performance in 2008 was higher than the projected rate of 8.5 percent at 11.5
percent. This growth was driven by a rebound in agriculture and continued buoyancy in
the industry and services sectors.
In the fiscal year 2009/10, GDP at current prices was estimated to be Rwf 3,160 billion up
from Rwf 2,843 billion in the year ending June 2009. In this fiscal year, the population of
Rwanda was estimated at 10.2 million people. GDP per head was therefore Rwf 308,000 or
US$ 541 at the nominal exchange rate of Rwf 569 to 1 US dollar.
The GDP estimates calculated at constant 2006 prices show that in 2009/10 the GDP was
6.2% higher in real terms than it was in 2008/09. This follows an increase of 9.8% from
2007/08 to 2008/09. This growth rate is mainly attributed to growth of 5.9% in agriculture
(mainly driven by a 7% increase in the food crop production), and 7.6% for services (in
which public administration grew by 10% and business services by 13%). The industry
sector registered a modest growth of 0.6% as the sector that was most affected by
the global recession and the domestic liquidity crunch.
There was an expansion in credit to the private sector which grew to 14% percent
of GDP by end-2008. In the year 2009/10, taking into account potential effects of
the domestic liquidity crunch, the Government was targeting credit to private sector of
12.2% of GDP (reduced from 14% in 2008), however, this was not achieved.
Revenue in 2008 outperformed the projections by RWF 52 billion reflecting increased
collection, higher inflation and GDP growth as well as large one-off non-tax revenue
earnings. In 2009/10, total domestic revenue collections were RWF 391.5 billion
(12.4 % of GDP), it exceeded the revised projected amount of RWF 385.1 billion
by about RWF 6.4 billion. Higher collections from direct taxes and some indirect taxes
offset shortfalls under taxes on international trade and non tax revenues. Collections from
PAYE contributed the largest share of the excess under direct taxes whilst collections
from consumption taxes notably VAT was the main contributor to the excess under
taxes on domestic goods and services. PAYE and VAT taxes continue to provide the
largest shares of domestic revenue collections. In fiscal year July 2008/June 2009, these
two categories of taxes contributed about 56% of tax revenue. In the fiscal year July
2009/June 2010, the share rose to about 59%. This development is in line with
Government policy to get the well-off in society to provide a larger share of
resources for the development of the country as envisaged in the EDPRS.
Exports of goods and services also fell by 9%, while the rate of increase in imported goods
and services slowed to 7% from 17% in 2008/09. In 2008, revenue from strategic exports
obtained was USD 185 million exceeding the target of USD 163 million and
revenue from tourism activities also increased to USD 208 million from a target of USD 56
million. More recently, in 2009/10, these two targets have been missed as an impact
of the global slowdown on the economy; they ware respectively of USD 164 million
(against a target of USD 198 million) for strategic exports and of USD 182 million (against
a target of USD 208 million) for tourism.
The only target that was not met in 2008 was the annual end year average inflation which
reached double figures at 15.4% compared to a single digit target that was set.
The acceleration in inflation arose from; high international commodity prices and
domestic pressures from rising prices of food and non-alcoholic beverages. However,
the inflation showed signs of stabilizing towards the end of the year with an increase
of only 0.7% between September and December 2008.
The inflation rate declined overall from 22.3% in December 2008 to 10.1% in
June 2009 and continued to be low in 2010 and the annual change stood at 5.03% by
end-June 2010 compared to 9.4% at the end of June 2009 (an annual average of 4.8%).
Click here to read full report
Executive Summary extracted form IMF Report - Rwanda: Financial System
Stability Assessment (August 2011)
Rwanda was little affected by the global financial crisis but, like its neighbors
in East Africa, is in the process of transition towards a more modern, competitive,
open and inclusive financial system. Following the 2005 FSAP, significant progress has
been made in restructuring and modernizing the financial sector and its legislative and
regulatory framework, in the context of an extensive Financial Sector Development Plan
(FSDP).
The National Bank of Rwanda (BNR) is now the sole regulator and supervisor for the
entire financial sector, except securities markets. By law it is granted independence in its
operations and conduct of policy, though some aspects of its independence could be
reinforced. Beyond the legal amendments, the BNR has improved its supervisory practice,
conformed more to international best practices, strengthened enforcement, and taken
intervention actions deliberately. The BNR still has capacity constraints and can further
strengthen some of its regulations and supervisory processes.
Both the government and the BNR have shown determined leadership over several years
in pursuing the necessary reforms. These reforms have helped to improve the structure
and operation of the banking as well as the insurance and pensions sectors; to
modernize the system infrastructure (monetary operations, payments systems, land and
mortgage registration, insolvency and creditor rights); and to strengthen the framework for
monitoring and mitigating systemic risk. However, continued efforts are required in
following up and transiting to the next generation of reforms.
At the same time, the financial sector faces new challenges and changes affecting financial
development and stability going forward. These reflect the authorities’ stated priorities to
achieve visible progress in improving access to financial services and in the provision of
long-term financing to the economy. Rwanda also faces an ambitious agenda with its
commitment as a member of the EAC to further regional economic, financial and monetary
integration, with the ultimate objective of establishing a monetary union.
Both the domestic and regional financial sector policy agendas are very
demanding. The authorities’ desire to make rapid progress is commendable, but there are
significant risks in moving too fast or not sequencing the steps appropriately. For example,
creating new depository institutions before establishing an adequate supervisory system
can create a situation where non-viable entities are not closed but still accept deposits
from the public. In this context, the problem posed by the considerable capacity
constraints for qualified personnel in financial institutions and in financial sector
supervision cannot be overstated.
The banking system in Rwanda has recovered from a period of restructuring in 2007 and
2008, leaving banks now better capitalized, provisioned, and liquid, but still exposed to
some risks. On the whole, banks—by far the largest providers of finance in the system—are
sufficiently capitalized to absorb a shock to their credit portfolio, but some banks exhibit
more vulnerabilities than others. This includes large exposure risks due to the
concentration of corporate lending. Also—while all banks operate well within the liquidity
requirements set by the BNR—a few banks are vulnerable to an extreme drop in deposits.
However, the BNR’s track record of dealing with emerging problems suggests that these
vulnerabilities are manageable. Market risks do not appear to be a major concern, neither
with regard to foreign exchange (FX) risk nor interest rate risk.
While the core banking system has been stabilized and strengthened, new risks are
emerging at the periphery. To accelerate the intermediation in the rural areas, the
authorities have recently established savings and credit cooperatives in each of the
416 geographically defined sectors of Rwanda—Umurenge Savings and Credit
Cooperatives (SACCOs). This created a significant void and to address it, the BNR is in
the process of recruiting supervisors for these SACCOs at the district level. However, not
only will these supervisors need to be trained in the near term, the BNR will also need to
quickly address the challenge of supervising institutions which themselves lack capacity
and essential skills in small-scale banking and managing risk. Furthermore, experience in
other countries has shown that—to be successful—such bank cooperatives require
ownership and trust among the people for whom they were created. Over the medium-
term, the most promising way to foster both ownership and a sustainable structure for the
SACCO sector, and ease the supervisory burden of the BNR, would be the formation of an
apex institution (without banking functions) owned by the SACCOs. This apex institution
should provide training and capacity enhancement to its member institutions and also
ensure that the members fulfill their regulatory requirements.
The mobilization of more long-term stable financing for the real economy continues to be
another major challenge, given the small and underdeveloped local capital market. The
banks are already exposed to the risks posed by the large maturity gap between their
assets and liabilities, so encouraging them to increase long-term lending without a more
stable funding source would only aggravate these risks. At the same time, there is
increasing demand for opportunities to invest in longer-term financial assets by the
insurance and pensions sector, in particular the Caisse Sociale du Rwanda (CSR). But the
development of a primary and secondary corporate bond market is likely to be achieved
only over the medium-term and facilitated by the EAC financial integration process.
Against this background, appropriately matching the financing, funding and investment
needs of the different sectors in the near term would best be achieved by the creation of a
market-based mechanism that allows the channeling of long-term funds accumulated by
the CSR, other pension funds and life insurance companies into the banking system, for
example via auctioning term deposits.
The authorities are encouraged to vigorously continue their program of financial sector
modernization. A structured plan for accomplishing existing tasks and preparing for the
next phase could form the basis of the second generation of Rwanda’s FSDP. The key
recommendations of the mission are in the table below. More detailed recommendations
can be found in the following sections of this report including the Report on the
Observance of Standards and Codes (ROSC) for the Basel Core Principles (BCP) for
Effective Banking Supervision in the appendix. In addition Technical Notes are being
prepared for the authorities on access to finance, banking structure and competition,
housing finance, insolvency and creditor rights, intermediating term finance, payments
systems, and stress testing.
Click here to view full report
Banking
Local banks operate in both local currency and dollar-based accounts. Starting in 2008,
a capital requirement was fixed at $9.2 million. All commercial banks have international
correspondent banks operating in major cities of the world. Automatic Teller Machines
(ATM) are available, but still limited to local transactions. Commercial banks are
authorized to provide loans in foreign currency. The government has recently
implemented a financial sector development plan that improves access to financial
services and competition in the banking sector and in micro-finance.
Stock Exchange
In 2011 the government launched the Rwanda Stock Exchange in order to facilitate
trading of equities and improve capital mobilization in the private sector.
Background:
In 1959, three years before independence from
Belgium, the majority ethnic group, the Hutus,
overthrew the ruling Tutsi king. Over the next
several years, thousands of Tutsis were killed,
and some 150,000 driven into exile in
neighboring countries. The children of these
exiles later formed a rebel group, the Rwandan
Patriotic Front (RPF), and began a civil war in
1990. The war, along with several political and
economic upheavals, exacerbated ethnic
tensions, culminating in April 1994 in the
genocide of roughly 800,000 Tutsis and
moderate Hutus. The Tutsi rebels defeated the
Hutu regime and ended the killing in July 1994,
but approximately 2 million Hutu refugees -
many fearing Tutsi retribution - fled to
neighboring Burundi, Tanzania, Uganda, and
Zaire. Since then, most of the refugees have
returned to Rwanda, but several thousand
remained in the neighboring Democratic
Republic of the Congo (DRC; the former Zaire)
and formed an extremist insurgency bent on
retaking Rwanda, much as the RPF tried in
1990. Rwanda held its first local elections in
1999 and its first post-genocide presidential
and legislative elections in 2003. Rwanda in
2009 staged a joint military operation with the
Congolese Army in DRC to rout out the Hutu
extremist insurgency there and Kigali and
Kinshasa restored diplomatic relations. Rwanda
also joined the Commonwealth in late
2009.Government type:
republic; presidential, multiparty system
Capital:
name: Kigali
time difference: UTC+2 (7 hours ahead of
Washington, DC during Standard Time)
Independence:
1 July 1962 (from Belgium-administered UN
trusteeship)
National holiday:
Independence Day, 1 July (1962)
Constitution:
new constitution passed by referendum 26 May
2003
Legal system:
based on German and Belgian civil law systems
and customary law; judicial review of legislative
acts in the Supreme Court; has not accepted
compulsory ICJ jurisdiction
Suffrage:
18 years of age; universal
Government:
Chief of state: President Paul KAGAME (since
22 April 2000)
head of government: Prime Minister Bernard
MAKUZA (since 8 March 2000)
cabinet: Council of Ministers appointed by the
president
elections: President elected by popular vote for
a seven-year term (eligible for a second term);
elections last held on 9 August 2010 (next to be
held in 2017)
election results: Paul KAGAME elected to a
second term as president; Paul KAGAME
93.1%, Jean NTAWUKURIRYAYO 5.1%,
Prosper HIGIRO 1.4%, Alvera MUKABAR 0.4%
For names of current Ministers, click here.
Disputes - international:
Fighting among ethnic groups - loosely
associated political rebels, armed gangs, and
various government forces in Great Lakes
region transcending the boundaries of Burundi,
Democratic Republic of the Congo, Rwanda,
and Uganda - abated substantially from a
decade ago due largely to UN peacekeeping,
international mediation, and efforts by local
governments to create civil societies;
nonetheless, 57,000 Rwandan refugees still
reside in 21 African states, including Zambia,
Gabon, and 20,000 who fled to Burundi in 2005
and 2006 to escape drought and recriminations
from traditional courts investigating the 1994
massacres; the 2005 DROC and Rwanda
border verification mechanism to stem rebel
actions on both sides of the border remains in
place
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
In 1959, three years before independence from
Belgium, the majority ethnic group, the Hutus,
overthrew the ruling Tutsi king. Over the next
several years, thousands of Tutsis were killed,
and some 150,000 driven into exile in
neighboring countries. The children of these
exiles later formed a rebel group, the Rwandan
Patriotic Front (RPF), and began a civil war in
1990. The war, along with several political and
economic upheavals, exacerbated ethnic
tensions, culminating in April 1994 in the
genocide of roughly 800,000 Tutsis and
moderate Hutus. The Tutsi rebels defeated the
Hutu regime and ended the killing in July 1994,
but approximately 2 million Hutu refugees -
many fearing Tutsi retribution - fled to
neighboring Burundi, Tanzania, Uganda, and
Zaire. Since then, most of the refugees have
returned to Rwanda, but several thousand
remained in the neighboring Democratic
Republic of the Congo (DRC; the former Zaire)
and formed an extremist insurgency bent on
retaking Rwanda, much as the RPF tried in
1990. Rwanda held its first local elections in
1999 and its first post-genocide presidential
and legislative elections in 2003. Rwanda in
2009 staged a joint military operation with the
Congolese Army in DRC to rout out the Hutu
extremist insurgency there and Kigali and
Kinshasa restored diplomatic relations. Rwanda
also joined the Commonwealth in late
2009.Government type:
republic; presidential, multiparty system
Capital:
name: Kigali
time difference: UTC+2 (7 hours ahead of
Washington, DC during Standard Time)
Independence:
1 July 1962 (from Belgium-administered UN
trusteeship)
National holiday:
Independence Day, 1 July (1962)
Constitution:
new constitution passed by referendum 26 May
2003
Legal system:
based on German and Belgian civil law systems
and customary law; judicial review of legislative
acts in the Supreme Court; has not accepted
compulsory ICJ jurisdiction
Suffrage:
18 years of age; universal
Government:
Chief of state: President Paul KAGAME (since
22 April 2000)
head of government: Prime Minister Bernard
MAKUZA (since 8 March 2000)
cabinet: Council of Ministers appointed by the
president
elections: President elected by popular vote for
a seven-year term (eligible for a second term);
elections last held on 9 August 2010 (next to be
held in 2017)
election results: Paul KAGAME elected to a
second term as president; Paul KAGAME
93.1%, Jean NTAWUKURIRYAYO 5.1%,
Prosper HIGIRO 1.4%, Alvera MUKABAR 0.4%
For names of current Ministers, click here.
Disputes - international:
Fighting among ethnic groups - loosely
associated political rebels, armed gangs, and
various government forces in Great Lakes
region transcending the boundaries of Burundi,
Democratic Republic of the Congo, Rwanda,
and Uganda - abated substantially from a
decade ago due largely to UN peacekeeping,
international mediation, and efforts by local
governments to create civil societies;
nonetheless, 57,000 Rwandan refugees still
reside in 21 African states, including Zambia,
Gabon, and 20,000 who fled to Burundi in 2005
and 2006 to escape drought and recriminations
from traditional courts investigating the 1994
massacres; the 2005 DROC and Rwanda
border verification mechanism to stem rebel
actions on both sides of the border remains in
place
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
| KnowYourCountry |
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| Last Updated: 17 September 2011 |