KIGALI, RWANDA - Rwanda's regulator of banks is appealing for competition in the banking sector to reduce dominance of a few banks and increase chances of resolving any possible systemic problem.
The National Bank of Rwanda (BNR) says four banks dominate the banking sector despite the fact that there are eight commercial banks and one microfinance bank in the country.
Operations of those four banks represent 69.1% of the total deposits of the banking industry and 46.7% of loans.
"This may reduce the likelihood of banking sector problems, but it can also limit the possibility of resolving any possible systemic problem in case it arises," warns the regulator.
The Bank says that aggregate credit is still concentrated in mortgage and trading where restaurants and hotels get a lion's share.
The two sectors account for an average of 60.4% of the total loans to private sector during the period 2007?2010 and their shares are 29.3% and 31.1% respectively during the same period.
"The large concentration of aggregate credit in a specific economic sector of activities makes banks vulnerable to adverse developments in that sector", adds the National Bank.
This happens on the back of high non-performing loans (NPLs) in the banking sector because of high loan default practices in the country.
BNR says that net NPLs ratio without taking into account interest rates in suspense slightly decreased to 9.7% in 2010 from 11.4% in 2009.
The Deputy Governor of the Central Bank Mr. Claver Gatete says high concentration of loans in few sectors limit lending to the crucial sectors like agriculture and SMEs.
He says possible ways to achieve reduce dominance of few players is to increase competition by licensing more banks,
and upgrading large microfinance institutions into fully-fledged banking institutions.
The bank is also
consulting with the government to limit lending to mortgage to a maximum of 30% on the government's deposit facility put in place to entice commercial banks to lend to the private sector.
The facility has been mainly used to fund mortgages and equipments, the bank said.
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Opportunities to Watch
BNR calls for competition in sector
Uganda to exploit COMESA drug market potential
Kampala, Uganda- Over dependence on imports of pharmaceutical products in the Common Market for Eastern and Southern Africa (COMESA) will soon be curbed as Uganda exploits the huge potential in the region.
Low regional production and lower prices for products imported has made the COMESA region heavily dependent on imports of pharmaceuticals. However, with the acquisition of the World Health Organisation (WHO) pre-qualification, Uganda is now poised to tap into the huge market.
A COMESA states meeting in Kampala, Uganda last week recommended that Uganda, already a drug producing country, takes up the challenge and start exporting to its member's states.
"The COMESA team visited the drug factory and realised that it is actually underutilised," the COMESA Director of Trade, Customs and Monetary Affairs, Dr Francis Mangeni, said during a visit to Quality Chemicals Industries Ltd.
Mangeni said member states observed that the factory was producing only 30% of its capacity. Quality Chemical Industries Ltd, the Uganda based anti-retroviral and anti-malarial drug manufacturer, is to start construction of a second factory adjacent to the existing this year. The extension project is estimated at $25m.
The Chief Executive Officer, Quality Chemical Industries, Mr. Emmanuel Katongole says the new factory is in advanced stages of architectural design with the ground breaking for construction expected in June.
The rapid expansion by the relatively new company follows pre-qualification by the World Health Organisation (WHO), which has increased demand from the region hence the need to increase capacity. The new plant will increase capacity from the current 6 million tablets a day to 15 million tablets per day.
COMESA region is a market of over 430 million people which constitute an important opportunity for investors and producers of drugs and medicines within the region. In the year 2009 COMESA's total imports of pharmaceutical products were US$2.6 billion and the total COMESA exports were US$276 million which indicates that COMESA constitutes a huge market for pharmaceutical products.
However, lack of Government guarantees to purchase drugs manufactured locally tends to frustrate investment in the sector.
Member states noted that limited access to finance, low intra-COMESA trade in pharmaceutical products and lack of focus on Research and Development were some of the challenges faced by COMESA states.
Member states urged the COMESA Secretariat to consider establishing regional reference laboratories for drug testing to assist Member States who lack such facilities. This, they said, will enhance regional acceptance of drugs tested in these labs.
The Secretariat has also been tasked to identify drug producers in the region and disseminate the information to Member States to facilitate sourcing of the drugs in the region.
The workshop on Public Health and Access to Life-saving medicine in COMESA was held from March 1-5, 2011 at Imperial Royale Hotel, Kampala, Uganda.
The objectives of the workshop were to promote access by the majority of the population to pharmaceutical products in the COMESA region through increased production and trade in pharmaceutical products and through bulk purchasing as well as utilizing flexibilities in the TRIPS Agreement.
Low regional production and lower prices for products imported has made the COMESA region heavily dependent on imports of pharmaceuticals. However, with the acquisition of the World Health Organisation (WHO) pre-qualification, Uganda is now poised to tap into the huge market.
A COMESA states meeting in Kampala, Uganda last week recommended that Uganda, already a drug producing country, takes up the challenge and start exporting to its member's states.
"The COMESA team visited the drug factory and realised that it is actually underutilised," the COMESA Director of Trade, Customs and Monetary Affairs, Dr Francis Mangeni, said during a visit to Quality Chemicals Industries Ltd.
Mangeni said member states observed that the factory was producing only 30% of its capacity. Quality Chemical Industries Ltd, the Uganda based anti-retroviral and anti-malarial drug manufacturer, is to start construction of a second factory adjacent to the existing this year. The extension project is estimated at $25m.
The Chief Executive Officer, Quality Chemical Industries, Mr. Emmanuel Katongole says the new factory is in advanced stages of architectural design with the ground breaking for construction expected in June.
The rapid expansion by the relatively new company follows pre-qualification by the World Health Organisation (WHO), which has increased demand from the region hence the need to increase capacity. The new plant will increase capacity from the current 6 million tablets a day to 15 million tablets per day.
COMESA region is a market of over 430 million people which constitute an important opportunity for investors and producers of drugs and medicines within the region. In the year 2009 COMESA's total imports of pharmaceutical products were US$2.6 billion and the total COMESA exports were US$276 million which indicates that COMESA constitutes a huge market for pharmaceutical products.
However, lack of Government guarantees to purchase drugs manufactured locally tends to frustrate investment in the sector.
Member states noted that limited access to finance, low intra-COMESA trade in pharmaceutical products and lack of focus on Research and Development were some of the challenges faced by COMESA states.
Member states urged the COMESA Secretariat to consider establishing regional reference laboratories for drug testing to assist Member States who lack such facilities. This, they said, will enhance regional acceptance of drugs tested in these labs.
The Secretariat has also been tasked to identify drug producers in the region and disseminate the information to Member States to facilitate sourcing of the drugs in the region.
The workshop on Public Health and Access to Life-saving medicine in COMESA was held from March 1-5, 2011 at Imperial Royale Hotel, Kampala, Uganda.
The objectives of the workshop were to promote access by the majority of the population to pharmaceutical products in the COMESA region through increased production and trade in pharmaceutical products and through bulk purchasing as well as utilizing flexibilities in the TRIPS Agreement.
Airtel in plans to upgrade to 3G
Nairobi, Kenya - Mobile operator Airtel Kenya has entered into a partnership with telecommunications infrastructure provider Kenya Data Networks (KDN), to upgrade its transmission network in readiness for the launch of its third generation (3G HSPA) network this year.
Under the five year partnership, KDN, the operator announced yesterday, will inter-link airtel sites through its extensive countrywide fibre optic network.
The improved 3G service it is expected will lead to increased mobile internet speeds for airtel mobile consumers. Both corporate and personal consumers, the operator noted, will benefit from the increased speed and coverage.
Airtel Kenya Managing Director Rene Meza said the infrastructural improvement would go a long way in improving the company's data service experience for its customers and would strategically place the company in a favorable position to enhance its Share of Market in the Data Services sector.
"Mobile broadband is a catalyst for economic growth and development and many of our customers will enjoy an improved online experience. This will further drive mobile penetration and accelerate the Internet and email access in Kenya in line with the Government goals in Vision 2030," said Meza.
Speaking during the signing ceremony, KDN chief executive officer Rikus Matthyser said the contract was in line with KDN's core objective of providing its clients with world class telecommunications infrastructure.
Airtel had announced, earlier in the year, that it would implement the roll out of 3G before the end of the third quarter of 2011.
Under the five year partnership, KDN, the operator announced yesterday, will inter-link airtel sites through its extensive countrywide fibre optic network.
The improved 3G service it is expected will lead to increased mobile internet speeds for airtel mobile consumers. Both corporate and personal consumers, the operator noted, will benefit from the increased speed and coverage.
Airtel Kenya Managing Director Rene Meza said the infrastructural improvement would go a long way in improving the company's data service experience for its customers and would strategically place the company in a favorable position to enhance its Share of Market in the Data Services sector.
"Mobile broadband is a catalyst for economic growth and development and many of our customers will enjoy an improved online experience. This will further drive mobile penetration and accelerate the Internet and email access in Kenya in line with the Government goals in Vision 2030," said Meza.
Speaking during the signing ceremony, KDN chief executive officer Rikus Matthyser said the contract was in line with KDN's core objective of providing its clients with world class telecommunications infrastructure.
Airtel had announced, earlier in the year, that it would implement the roll out of 3G before the end of the third quarter of 2011.
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