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The East African : Mar 9th 2015
16 The EastAfrican NEWS MARCH 7-13,2015 INTEREST RATES A Bank Populaire du Rwanda stand at a trade fair in Kigali last year. Pic: File High cost of credit takes toll of businesses EXCITING CAREER OPPORTUNITIES IN TRADE & REGIONAL DEVELOPMENT TradeMark East Africa (TMEA) is funded by a range of development agencies with the aim of growing prosperity in East Africa through trade. We believe that enhanced trade contributes to economic growth, a reduction in poverty and subsequently increased prosperity. TMEA works closely with East African Community (EAC) institutions, national governments, business and civil society organisations to increase trade by unlocking economic potential through: • Increased market access; • Enhanced trade environment; and • Increased product competitiveness. TMEA has its headquarters in Nairobi with branches in Arusha, Bujumbura, Dar es Salaam, Juba, Kampala and Kigali. We are looking for high calibre, results-oriented and experienced professionals to join our team in the positions detailed below. COUNTRY DIRECTOR - BURUNDI The Country Director (CD) is responsible for managing the Burundi Programme and delivering quality results of this portfolio in line with TMEA’s Project Cycle Management (PCM) guidelines, as well as managing and maintaining strategic relationships with government, the private sector, civil society and the donor community. In addition, the CD is responsible for managing the country team staff to ensure best practice of programme delivery is followed in line with TMEA corporate guidelines, procedures and systems. The ideal candidate will possess an undergraduate degree preferably in Economics, Development Studies, International Trade, Planning, Finance or Management. A post-graduate degree in a related field will be an added advantage. S/he should have a minimum of 10 years management experience (3 of which should have been gained in Southern and East African countries) in managing economic development co-operation programmes preferably in regional integration, trade facilitation, trade and investment climate reform, transport sector development, and/or institutional reform for Department for International Development (DFID), the European Commission (EC), the World Bank group and/or other development partners. S/he should have demonstrated strong programme cycle management skills, proven ability in preparing terms of reference and project documents and possess monitoring and evaluation skills. In addition, the role requires practical experience in project financial management, financial modelling and project information system maintenance. DIRECTOR, AUDIT & ASSURANCE The Director of Audit & Assurance is responsible for the quality and performance of internal auditing within TMEA. S/he will provide independent and objective assurance to the Audit Committee of the Board and the Chief Executive Officer (CEO) on the overall adequacy and effectiveness of TMEA’s arrangements for governance, risk management, and internal control. The Director of Audit & Assurance has free and unfettered access to both the Chair of the Audit Committee and the CEO at all times. The ideal candidate will possess a relevant undergraduate degree with qualified professional membership of an internal audit or accountancy body. S/he will have at least 10 years’ relevant work experience in a busy work environment; a successful track record in internal audit management and participation in the formulation of audit objectives, policies and strategies. S/he will have a proven track record of influencing, giving professional advice to and building effective and productive working relationships with senior managers and those engaged in managing risks and other assurance providers. APPLICATION DETAILS Detailed job profiles for these posts can be accessed on our website www.trademarkea.com. These positions are available on contract to 30 June 2016 with the possibility of renewal. Please apply online through http://www.trademarkea.com/work-with-us/ by Friday, 27 March 2015, 5.00pm East African time and ensure that you attach your cover letter and detailed CV, including your qualifications, experience, and present position. Your application should also include names and addresses of three referees, a working e-mail address and daytime telephone contacts. Interviews will be conducted in May 2015 in Nairobi, Kenya. Please note that we will only consider applications received on-line through the link provided above. Applications received after the deadline will not be accepted. We reserve the right to accept or reject any application. Only short-listed candidates will be contacted. TradeMark East Africa is an equal opportunity employer and is commi ed to open and transparent recruitment processes. Banks in Rwanda cha≥ge inte≥est as high as 20 pe≥ cent, pushing up cost of ope≥ations By BERNA NAMATA The EastAfrican pay up to 20 per cent interest rates to banks, is weighing down on the private sector in Rwanda. Despite credit to the sector T expanding by 19.6 per cent last year, the government now faces a daunting task of crafting new measures to rein in runaway business expenses. The loan rejection rate has climbed to 17.4 per cent against 13.2 per cent and 8.8 per cent recorded in 2013 and 2012 respectively. This has been blamed on poor loan repayment due to lack of profitability, lack of collateral, outstanding loans in various banks and bad credit histories. All this, compounded by limited access to finance, particularly for investors in the mining and agriculture sectors, has resulted in a loan rejection rate of 68 per cent and 58 per cent respectively last year, according to data released by the National Bank of Rwanda. Small market “Banks charge high inter- est rates, which make it impossible to grow business in a small market like Rwanda. High interest leaves no room for profitability because the cost of doing business is high yet the purchasing power is still low. You simply end up making money for the bank,” a businessman who runs a restaurant and a guest house in Kigali said. “Businesses are forced to close shop while almost every month banks are advertising and auctioning people’s property because they have failed to repay a loan,” he added. Industry lending rates de- clined marginally from 17.3 per cent in 2013 to 17.2 per cent in December 2014, despite the central bank reducing its policy rates to increase liquidity and create room for banks to lend to the private sector. The central bank has kept its repo rate unchanged at 6.5 per cent since June last year. Deposit interest rates on he high cost of credit that has seen most businesses average reduced 8.2 per cent last year from 9.9 per cent in 2013. But banks argue that mar- ket dynamics — demand and supply — are the major determinants of interest rates and not the central bank’s policy rate. The banks blame low levels of savings, which limits their source of deposits. Rwanda’s national savings were estimated at 6.8 per cent of gross domestic product last year, down from 9.5 per cent of GDP in 2013. This is below the government’s target of 30 per cent of public savings for 2017-18. This puts Rwanda below other East African countries such as Kenya, Tanzania and Uganda where national savings are relatively higher. For instance, Kenya’s national savings are 11 per cent of GDP and the figure is 15.5 per cent and 18.2 per cent for Uganda and Tanzania respectively. Central bank Governor John Rwangombwa said weak responsiveness of the lending rate to the change in the key repo rate is due to among other factors, high operating costs in the banking sector and high provisions for bad loans. The non-performing loans ratio declined to 6.0 per cent last year compared with 6.9 per cent in December 2013. “The behaviour of borrow- ers such as lack of information on loan conditions and a culture of not bargaining with banks has contributed to the rigidities in lending rates charged by banks,” Mr Rwangombwa said, adding that the central bank cannot impose or control interest rates charged by banks. But analysts are now cau- tioning that the high cost of finance faced by mainly local enterprises is undermining private sector investment and job creation. While Rwanda has done well in improving the policy environment for businesses, the high cost of doing business remains a major constraint to the country’s economic aspirations. Rwanda has sustained high growth of over 6 per cent over the past decade, driven by public sector investment.
Mar 1st 2015
Mar 16th 2015