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How Rwanda keeps wages, spending low

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By IVAN R. MUGISHA
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Rwanda has kept its wages and salaries below 18 per cent of the budget, as part of measures to cut the costs of running government institutions.

“Salaries and wages are well controlled and represent only 18 per cent of the budget,” said Uzziel Ndagijimana, Minister of Finance. “They increased slightly because of the creation of new institutions and promotion of some staff.”

He said keeping recurrent expenditure low is one of the reasons Rwanda’s debt distress is low.

Rwanda has borrowed heavily in recent years to finance infrastructure programmes, contributing to an increase in external public debt to 37.5 per cent of GDP in 2017 from 16.4 per cent in 2012.

But its debt sustainability analysis indicates low risk of debt distress, according to the International Monetary Fund. However, the country increased its budget spending by 7 per cent in the 2017/18 fiscal year to Rwf2.09 trillion ($2.58 billion).

Only 17 per cent of this budget is funded by donors, while about Rwf362.8 billion is borrowed from external lenders.

A development-centred budget has enabled Rwanda realise 26 per cent of the targets stipulated in its Vision 2020. Some of those achievements are increasing agricultural production, reducing infant mortality and malaria deaths, and increasing secondary school transitional rates.

However, even though its external debt burden remains below risk thresholds, it is expected to balloon in 2023 when the Eurobond issued in 2013 matures.

Proceeds from the $400 million Eurobond were in part used to repay a debt owed by national carrier RwandAir, which is still struggling to make a profit.

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Despite this, the government is confident that the services RwandAir offers to the economy make up for its lack of profitability.

“Actually RwandAir is profitable in the economic sense. What we target is not profits from the company itself but the impact it is having on the economy. Our exports are growing because our connection with other countries is expanding and tourism is expanding. This is the kind of strategy we are looking at with RwandAir,” Mr Ndagijimana said.

Rwanda also has the lowest government corruption level in the region and on the continent, a factor that has ensured that funds meant for development projects are not embezzled.

The country has some of the harshest anti-corruption laws and regulations in the region, including tapping phone lines of suspects, imposing severe fines and publicising the names and families of people convicted of the crime.

Prosecutors won 289 corruption-related cases between June 2017 and June 2018, up from 121 in 2016, and several individuals were jailed.

The Auditor-General’s Report for 2017 showed that various agencies have ghost debtors and creditors, while their budgets have significant balances that are omitted from financial statements.

A total of 16 accounts, valued at Rwf638 million ($0.73 million) were omitted from the financial statements of six institutions, including the Rwanda Social Security Board, University of Rwanda, Rwanda Energy Group and four district hospitals.

President Paul Kagame last Wednesday upped the ante on parliamentarians, asking them to bring to book heads of institutions mentioned in corruption scandals in the Auditor-General’s report.

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Uhuru wa biashara, Suluhu ya vikwazo: How Kenya-Tanzania trade will be streamlined

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President Uhuru Kenyatta with his Tanzania counterpart Samia Suluhu, who is on a two-day state visit in Kenya.[PSCU]

President Uhuru Kenyatta says ministers from both Kenya and Tanzania should resolve all non-tariff barriers and other restrictions affecting the two countries within four months.
Uhuru, on Wednesday said going forward, there will be no business visa or work permits for Tanzanian wishing to do business in the country.
“You are free to come and trade here in Kenya, there will be no business visas or work permits as long as you abide by the laws of the land,” he said.
Uhuru was speaking during the Kenya-Tanzania Investment Forum at Serena hotel. The forum was in line with President Samia Suluhu’s two-day state visit.
Kenya has about 513 companies doing business in Tanzania compared to Tanzania’s 30 in Nairobi.
Uhuru said in the next two weeks, concerned ministers from both sides should clear all the traffic jams at the Taveta and Namanga border points.
Uhuru said they should pay a special focus to the issuance of Covid-19 certificates to ease the movement of  transit cargo.
“I direct that all the maize lying at the border be cleared in two weeks. We cannot subject businesses to more suffering,” Uhuru said.

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Uhuru urged the ministers to move swiftly and ensure the ease of doing business at the border pointswas decisively tackled.
“It is not about wearing suits and meeting over tea.Get to the ground and understand what is affecting those traders. Don’t just sit in those offices. If you need to consult, do it and get the work done,” he said.
Uhuru’s sentiments came shortly after the Kenya Business Community nsaid it was ready to trade with the Tanzanian business community.
Led by the Kenya National Chamber of Commerce (KNCC), the community proposed the formulation of a Joint Business Council that will support the two countries.
KNCC President Fred Ngatia said the council would play a key role in addressing issues that bedevil  Nairobi-Dar trade,
The community said there should be policy forums and investment-focused events that will target small-scale enterprises.
“We are going to focus more on economic projects by identifying favourable financing institutions that will help us settle some of the commercial disputes affecting our community,” Ngatia said.
He said this will be made possible through the Public-Private Partnerships offered by the government.
As a result, KNCC in partnership with the Tanzania Chamber of Commerce will host a trade and investment exhibition in Dar es Salaam this August aiming to help SMEs unlock their potential.
So far Trade and Agriculture ministers from the two sides have had a breakfast meeting and agreed to initiate bilateral discussion before the end of the month.
Trade CS Betty Maina said the discussions aim to iron out all issues that have been hampering trade between the two countries.
This includes issues surrounding maize import.
President Samia Suluhu said her government was ready to serve as a bridge to pave way for businesses between the two countries to thrive.
“It is not about competing and complicating things, but about developing business relationships to allow both parties to explore opportunities,” she said.
Suluhu said while Tanzania is rich with natural resources and tourist attractions, Kenya is thriving in the ICT world and thus the need for exchange of skills on research and development.
“Muna bahati sana maanake upande mmoja mnao Uhuru wa kufanya biashara na upande mwingine Suluhu la kuondoa vikwazo,” Suluhu said.

 
 
 
 
 
 

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Kenya and Tanzania agree to iron out trade barriers

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President Uhuru Kenyatta (PHOTO: PSCU)

NAIROBI, KENYA: A business forum held on Wednesday between Kenya and Tanzania agreed to iron out challenges constraining business between the neighbouring countries.
President Uhuru Kenyatta and Tanzania counterpart Samia Suluhu Hassan during the forum noted that trade opportunities between the two countries have not been fully exploited. Trade volume between the two countries was valued at Sh60.4 billion in 2012 and Sh47.5b, Sh45.6billion and Sh47.5 billion in 2016, 2017 and 2018 respectively.In 2020, President Uhuru Kenyatta noted that the volume was valued at Sh50 billion.
“Trade between the two countries has thrived over the past due to robust private sector, entrepreneurial citizen among other factors, however from the volumes we have not exploited the opportunities to full capacity,” he said.
“There is an urgent need for cooperation between the two countries to iron out issues hindering the growth of trade,” he added.
He noted that the economies need to drop unhealthy competition which he said work against investment in the two neighbouring countries.
The President also directed responsible government officials to meet within this week or the week after to iron out issues around the Covid-19 certificate. He also directed CS Agriculture and Livestock Peter Munya to allow maize to be cleared at the border.
Reading from the same script, his counterpart Suluhu Hassan noted that real development between the two countries can get better if they develop together.
“We need to work on a conducive environment by creating efficient courts, harmonize tax regimes, work on the investment climate and better legislation,” she said. She noted that Kenya can benefit from Tanzania’s rich mineral sector while Tanzania can borrow from Kenya’s thriving technology sector.

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The private sector represented by the East African Business Council noted the decline in intra EAC trade is due to several barriers to trade, investment and movement of persons. Intra-EAC trade currently stands at below 20 per cent vis a vis SADC at 48 per cent and European Union at 70 per cent.
“There’s a need to embrace digitalization particularly in moving goods and services across the EA region and harmonizing the tax regimes, we need to also strengthen the East African Secretariat,” said Nick Nesbit, Chairman of East African Business Council.
He also underscored the need to promote value addition in manufacturing and diversification of our products and the elimination of Non-Tariff Barriers, which will go a long way towards increasing intra-EAC trade from the current below 20 per cent.
Ministers from the two countries are expected to meet before the end of the month to iron out issues affecting trade between the two countries.

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Delayed Sh70 billion to counties hampering COVID war: Wambora » Capital News

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NAIROBI, Kenya, May 5- The Council of Governors has decried their inability to fight the COVID-19 pandeic due to lack of finances from the national government.

The Council’s Chairperson Martin Wambora said the National Treasury is yet to release Sh70.2 billion owed to the counties, despite the clock ticking to the end of the financial year on June 30.

“Last week I reported that the total outstanding amount owed to County Governments is Sh70.2 billion. Despite having only one month left to the end of the financial year, the National Treasury is yet to disburse this outstanding amount to Counties,” he told a news conference on Tuesday.

He said the delay has “compromised response measures towards the COVID-19 pandemic and service delivery to members of the public.”

Some counties are yet to pay staff salaries for more than three months.

On the shortage of HIV and AIDS commodities, Wambora said Counties with high stock are now considering redistributing them to those with low stocks.

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He said the Council of Governors will engage the Ministry of Health to fast-track the release of the pending products for HIV/AIDS stuck at the Mombasa port.

Further, he said, County Governments will prioritize a long-term solution in financing HIV, TB and Malaria response through domestic financing and increased Government resources to the programs.

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Wambora further welcomed President Uhuru Kenyatta’s decision to lift a lockdown on five Counties declared disease zones in March, saying it will allow businesses to thrive.

Nairobi, Kiambu, Kajiado, Machakos and Nakuru were on a partial lockdown until May 1 when President Kenyatta revised the night curfew to start at 10 pm to 4 am from the earlier 8pm.

He however, urged Kenyans to remain cautious since the threat of COVID-19 was still real.

On waste management, Wambora decried an influx of medical waste, particularly used PPE kits which are disposed in the dumpsites.

He noted that “this is hazardous waste should be treated in hospitals and disposed in a safer manner in order to prevent further transmission of the virus.”

“To address the issue, County governments have strengthened enforcement through County Environmental Inspectors to ensure integrated waste management systems are adhered to thereby limiting waste influx in undesignated areas and landfills, he said.

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