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