FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 9 Table 2.1: Distribution and response rate per sector in 2015 Sector Distribution Collection R Rate Agriculture 16 14 87.5 Construction 12 10 83.3 Education 6 6 100.0 Electricity 5 4 80.0 Finance and insurance 34 34 100.0 Human health and social work 4 4 100.0 ICT 15 12 80.0 Accounting and Profession activities 9 9 100.0 Manufacturing 40 37 92.5 Mining and quarrying 12 11 91.7 Real estate 6 5 83.3 Tourism 17 15 88.2 Transportation 8 7 87.5 Water supply 2 1 50.0 Wholesale and retail trade 23 22 95.7 Grand Total 209 191 91.4 Source: Foreign Private investment 2015 2.2.4 Data Processing Data entry and processing was done using a MEFMI Private Capital Monitoring System. In order to ensure data quality, completed questionnaires were reviewed by the technical team and team leader to ensure completeness, data consistency and reliability. 2.2.5 Data quality and estimation for non-response The Census was conducted in accordance with the international standards, classifying economic activities based on International Sectorial Industrial Classification (ISIC) Revision 4. The data quality was directly related to the quality of field enumeration and supervision; form design and inbuilt checks; respondents’ understanding of the concept, classification and census questions; respondents’ willingness to complete the questionnaire; technical editing and validation skills by field staff and team leader; the availability of other instruments to compare the data with such as financial statements and previous census returns. All the quality indicators were rated high.
FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 10 In addition, comparisons of collected data were made with the information provided in the previous censuses at enterprise level for consistency check. 2.2.6 Timeliness The census findings were disseminated in less than 6 months after completion of fieldwork. This was to meet the timeliness criteria for data dissemination as guided by IMF’s framework in the Special Data Dissemination Standard (SDDS), which is within six months after fieldwork. 2.3 General findings Besides the information regarding inward and outward transactions of companies in the census, it is also necessary to show other transactions performed by the same companies. This part presents the aggregate findings on companies’ turnover, trade, levels of employment, compensation of employees and corporate social responsibility. 2.3.1 Entity turnover The FPC turnovers declined from US$ 1,798.8 million in 2014 to US$ 1,554.5 million in 2015, representing 13.6 percent decline and 27.5 percent of the country’s total turnovers in 2015, whereas the declared turnovers from RRA improved by 8.1 percent from US$ 5,226.1 million in 2014 to US$ 5,561.0 million in 2015. The FPC turnovers were dominated by finance and insurance services, wholesale and retail trade, and manufacturing accounting for 68.3 percent of FPC companies’ turnovers. Table 2.2: Entity turnovers by sectors in 2011-2015 (US$ million) Sector 2011 2012 2013 2014 2015 Agriculture 36.0 38.4 38.0 43.0 67.9 Construction 11.4 3.7 98.5 114.0 68.4 Financial & Insurance 187.6 192.3 384.5 445.3 441.4 ICT 182.5 185.7 134.4 155.7 195.1 Manufacturing 229.8 246.8 365.9 414.5 286.2 Mining 86.5 59.5 133.6 151.3 62.3 Tourism 22.8 18.4 23.0 26.7 34.3 Transportation 7.4 8.6 94.2 109.1 37.9 Wholesale 222.3 223.4 277.5 321.3 334.8 Other sectors 8.4 96.5 15.3 17.8 26.1 Total 994.6 1,073.4 1,565.0 1,798.8 1,554.5 Source: Foreign Private Capital 2015
FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 11 2.3.2 Contribution on external trade The census findings show that the FPC companies are net importers with US$ 202.1 million in 2015, resulting from US$ 205.7 million of exports and US$ 407.8 million of imports. External trade in mining, agriculture and transportation products recorded trade surplus of US$ 59.1 million, US$ 49.1 million and US$ 15.6 million respectively. The mining products are dominated by tin, coltan and wolfram exported by major mining exporting companies in Rwanda. The agricultural exports were dominated by Tea and coffee while courier transportation and storage services took a big share in transportation sector. On the side of imports, wholesale and retail trade and manufacturing sectors took a lion’s share of 78.5 percent of total imports (US$ 320.1 million out of US$407.8 million) in 2015. Wholesale and retail trade sector is mainly made by petrol stations and supermarkets while the manufactured exports are generally maize and wheat flour. It is important to note that the ratio of Exports/Imports for FPC companies is 50.4 percent which shows that the FPC companies have higher export coverage than the country’s Export/Imports cover of 35.7 percent. Table 2. 3: Exports-Imports in 2015 (US$ million) Sector Exports Imports Net Exports Agriculture 52.3 3.2 49.1 Construction 0.0 22.6 (22.6) Finance and Insurance 0.3 7.0 (6.7) ICT 6.7 45.2 (38.4) Manufacturing 48.7 125.6 (77.0) Mining 63.4 4.2 59.1 Transportation 16.2 0.5 15.6 Wholesale and retail trade 18.1 194.5 (176.4) Other sectors 0.1 5.0 (4.9) Grand Total 205.7 407.8 (202.1) Source: Foreign Private Capital 2015
FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 12 2.3.3 Employment The results of the FPC 2015 show that employment grew by 11.4 percent from 36,964 in 2014 to 41,192 in 2015. In terms of nationality of employees, Rwandans were 97.8 percent against 2.2 percent of foreigners. The number of short-term foreign employees was 56 which is equivalents to 0.1 percent of the total. According to the category of employment, managerial positions are occupied by 1,889 staff (4.6 percent), administrative 4,144 staff (10.1 percent); skilled 10,126 staff (24.7 percent) and casual 24,901 staff (60.6 percent). Details are provided in table 2.4. Table 2.4: Employment by Category in 2015 CATEGORY LOCAL FOREIGN ST FOREIGN LT TOTAL Managerial/Supervisory 1,559 15 315 1,889 Administrative/Accounts 4,010 1 133 4,144 Skilled technicians 9,701 35 390 10,126 Casual laborers 24,891 5 5 25,033 Total 40,161 56 843 41,192 Source: Foreign Private Capital 2015 Regarding sectorial distribution of employment, agriculture had the highest number with 36.2 percent of total employees, followed by manufacturing (16.5 percent), financial services (15.9 percent) and mining (11.8 percent). Table 2.5: Distribution of employment by sector 2011-2015 Sectors 2011 2012 2013 2014 2015 Agriculture 8,015 4,274 9,596 14,394 14,932 Finance and insurance 3,944 4,083 5,129 5,434 6,559 ICT 846 651 461 650 862 Manufacturing 2,817 5,832 3,191 2,878 6,816 Mining and quarrying 4,875 4,756 3,825 6,830 4,843 Real estate activities 6,183 6,183 1,231 1,094 86 Tourism 579 1,629 778 2,152 1,527 Wholesale & retail trade 808 770 618 2,401 1,467 Other sectors 2,650 4,656 7,956 1,131 4,100 Total 30,717 32,834 32,785 36,964 41,192 Source: Foreign Private Capital 2015
FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 13 The increase in Agriculture employment mainly came from newly privatized tea factories like Shagasha, Mulindi and Gisakura. The agriculture sector employs most of casual laborers in tea and coffee plantations. The drop in employment in sectors like real estate and administrative was caused by change of some companies’ ownership from non-residents to residents. 2.3.4 Compensations of employees Total compensation of employees (wages, salaries, contribution to pension fund, fringe benefits, etc.) paid to companies’ employees increased by 4.1 percent from US$.320.7 million in 2014 to US$ 331.4 million in 2015. Local employees received the highest share accounting for an average of 74.5 percent of the total compensation in 2015. The best remunerating sectors were manufacturing with 35.5 percent of total remuneration, followed by finance and insurance with 27.2 percent and ICT with 12.6 percent. Details are shown in Table 2.6. Table 2.6: Compensation of Employees 2011- 2015 (US$ million) Sectors 2011 2012 2013 2014 2015 Finance and insurance 43.0 81.9 163.7 164.9 90.3 ICT 20.0 14.2 13.7 15.8 41.7 Manufacturing 12.9 18.0 21.9 24.0 117.8 Mining 1.7 2.1 3.7 2.2 4.6 Tourism 4.0 2.0 8.0 6.0 31.9 Transportation 1.9 1.5 54.0 40.0 5.9 Wholesale & Retail trade 4.5 4.8 6.2 9.6 11.0 Other sectors 7.00 14.51 29.18 55.77 28.28 Total 95.0 139.0 300.4 318.3 331.4 Source: Foreign Private Capital 2015 2.3.5 Corporate social responsibility Corporate Social Responsibility (CSR) is a corporate initiative to take responsibility for the company’s effects on the environment and social welfare. Those initiatives are directed to environment, infrastructure, educational programs, health and other social, cultural or community services that benefit the population. The
FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 14 contributions of companies to corporate social responsibility stood at US$ 9.4 million in 2015 up from US$ 2.3 million in 2014. The activities which attracted substantial CSR contributions are security and safety (48.0 percent) and arts and culture (14 percent), donations to vulnerable groups (9 percent), education (8 percent) and health & welfare (8 percent). Figure 4: Corporate social responsibility by type of recipient in 2015 (US$ thousands) Source: Foreign Private Capital 2015 The results show that the manufacturing sector is the biggest contributor to CSR in 2015 as it accounted for 30.0 percent, followed by financial sector with 12.3 percent. Table 2.7: Corporate Social Responsibility by Sector 2011- 2015 (US$ million) Sector 2011 2012 2013 2014 2015 Agriculture 0.2 0.2 0.2 0.1 0.3 Finance and insurance 0.4 0.5 0.9 0.6 1.2 ICT 0.3 0.4 0.3 0.0 0.7 Manufacturing 1.5 2.2 1.3 1.2 2.8 Mining 0.1 0.1 0.2
0.1 Professional 0.1 0.0 0.0 0.0 0.0 Tourism 0.2 0.3 0.3 0.1 0.0 Wholesale and retail trade 0.1 0.1 0.1 0.1 0.2 Other sectors 0.01 0.21 1.54 0.16 4.25 Total 2.8 4.0 4.8 2.2 9.4 Source: Foreign Private Capital 2015
FOREIGN PRIVATE CAPITAL IN RWANDA Year 2015 15 CHAPTER THREE FOREIGN PRIVATE INVESTMENTS IN RWANDA 3.0 Introduction T his chapter highlights the census findings on foreign private investment that includes, foreign direct investment, foreign portfolio investment and foreign borrowing in 2015 and the respective outstanding as at end of 2015. It presents also the income and profitability by sector. Foreign Private Capital is composed of Foreign Direct Investment (FDI), other investments and Portfolio investment. FDI are made of investments of non- residents in resident companies with a shareholding of at least 10% of the company’s total capital; and debt from related enterprises, but excludes debt among related financial intermediaries. Portfolio investment are tradable instruments and other investments which are borrowings from outside as well as non-tradable shareholding of less than 10% of total capital of the company. All these categories are analyzed by type of liability or instrument, relationship, sector of investment, and source country. Foreign Private Capitals have two directions which are liabilities made of inward investment flows and stocks as well as assets made of outward investments flows and stocks. 3.1 Foreign Private Capital attraction in Rwanda Looking at the performances in terms of investment attraction and registration, for the last seven years (2009-2015), a total of 398 investment projects fully owned by foreign investors or in joint ventures with local investment has been registered with pledged investment worth US$ 3,429.51 million and committing to create 61,302 jobs. The following table presents the pledged investments in value, number of projects and annual planned new jobs for the period of 2009-2015. Table 3.8: New Foreign Private Investments registered (2009 – 2015) 2009 2010 2011 2012 2013 2014 2015 Number 46 41 60 76 61 54 60 Value($ million) 529.72 199.07 398.89 474.9 644.85 359.61 822.47 Jobs 10,734 12,529 5,553 17,311 3,845 5,169 6,161 Source: Rwanda Development Board, 2016.