Kigali, Rwanda, May 11, 2012 –
IFC VP and Treasurer Jingdong Hua has reaffirmed IFC’s commitment
to Rwanda’s private sector during a visit to the country, where he emphasized
the need for increased local currency finance for economic growth.
During his first visit to Rwanda, Hua
met with business leaders, Rwanda’s Prime Minister, the Ministries of
Finance and Economic Planning, Infrastructure, Trade and Industry, and
the National Bank of Rwanda, to discuss ways IFC can increase its activities
in the country. Hua praised the government’s strategic vision and efforts
to improve the business environment.
Thanks to reforms such as easier business
registration and trade-related procedures, simplified taxes, and the creation
of special economic zones, Rwanda has become a top reformer on the IFC
and World Bank’s Doing Business report, which ranks the ease of doing
business in countries around the world.
Hua said, “Rwanda has made great strides
reforming its economy in recent years and is a priority for IFC. Since
2006, IFC has made investment commitments of $78.5 million in Rwanda to
support entrepreneurs, manufacturing, agriculture and infrastructure. Now
that we have a swap agreement with the Central Bank, IFC’s goal is to
support more private sector projects in local currency.”
IFC established a long-term local currency
swap facility with the Rwandan Central Bank in 2009, the first time a multilateral
organization entered into such an agreement with an African Central Bank.
The facility allows
IFC to provide loans in local currency to Rwandan enterprises,
protecting them from foreign-exchange risk.
The swap facility has led IFC to invest
the equivalent of $20 million in Rwandan francs towards projects that support
agribusiness, manufacturing and finance for small businesses. Beneficiaries
include: Bakhresa Group, which used a loan to set up a new wheat mill in
Rwanda; Urwego Opportunity Bank, which is increasing lending for entrepreneurs
in rural regions; and Market Shopping Centre Ltd, which is constructing
a multi-storey commercial centre in Kigali.
The swap agreement also made it easier
for KCB, East Africa’s largest bank, to enter Rwanda last year, thanks
to a $5 million local currency loan. KCB will use the loan to provide affordable
mortgages and increase credit to smaller businesses.
Hua said that the success of Rwanda’s
swap facility has led IFC to explore similar arrangements with local banks
in Asia and South America.
IFC has also helped Rwanda attract increased
foreign investment. IFC engaged with Singaporean logistics firm, Portek,
to help privatize the Magerwa Dry Port. When committed, Magerwa will receive
a local currency loan from IFC.
IFC is backing smaller business in Rwanda
with its Business Edge training, which provides courses in marketing, finance,
operations, and other areas.
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, providing advisory services to businesses and
governments, and mobilizing capital in the international financial markets.
In fiscal 2011, amid economic uncertainty across the globe, we helped our
clients create jobs, strengthen environmental performance, and contribute
to their local communities—all while driving our investments to an all-time
high of nearly $19 billion. For more information, visit www.ifc.org.