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2.8.1. Private Sector External Debt inflows 2012
Disbursements of the PSED in 2012 amounted to $ 298.4 million from $ 241.9 million in 2011, an increase of 23.4 percent. Debt inflows from related companies, included in foreign direct investments, totaled $ 145.1 million showing a strong support of our foreign investment companies by their sisters/ mothers abroad. Debt inflows from unrelated companies were $ 153.3 million in 2012 against $ 241.9 million recorded in 2011 and $ 257.9 million in 2010. The debt from non-affiliates represents 51.4 percent of total debt from abroad in 2012. The repayment of principal was $ 132.6 million in 2012 of which 44% for trade credit.
Table 14: Private Sector External Debt flows 2010 – 2012 ($ million)
Type
Maturity
Disbursement
Repayment
2010 2011 2012 2010 2011 2012 AFFILIATES 166.2 91.6 145.1 55.2 11.5 34.1 Loans LT 124.3 81.1 131 14.3 3.9 31 ST 41.9 10.5 14 40.9 7.7 3 NON AFFILIATES 91.7 150.3 153.3 64.9 67.2 98.5 Loans LT 48.6 137.3 89 13.1 55.2 41 ST
0.2 0
0.0 0 Trade Credits ST 41.2 12.4 63 39.7 11.9 58 Other LT 1.9 0.4 2 12.1
TOTAL
257.9
241.9
298.4
120.1
78.7
132.6
Of which:
LT
174.8
218.8
221.8
39.5
59.1
71.6
ST
83.1
23.1
76.6
80.6
19.6
61.0
Source: Foreign Private investment 2012
2.8.2. Private Sector External Debt stocks 2012
Private Sector External Debt (PSED) stock includes both long and short term borrowing from affiliates (FDI related borrowing) and non-affiliates (non-related entities abroad). Private sector external debt is largely in form of loans, trade credits, debt securities, currency and deposits and other accounts payable. In this section, the stock of PSED is presented and analyzed according to type, maturity and relationship. According to the census, the Private Sector External Debt (PSED) stock has been increasing since 2010, standing at $ 593.2 million end 2012; 29.0 percent higher than the amount recorded end 2011.
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Table 15: Private Sector External Debt stocks 2010-2012 ($ million)
Type
STOCKS
2010 2011 2012 AFFILIATES 136.0 177.0 287.9 Loans LT 121.0 160.0 260.3
ST 15.0 16.9 27.6 NON AFFILIATES 162.1 243.7 305.3 Loans LT 146.6 228.6 276.7
ST
0.1
0.2
0.2
Trade Credits
ST
15.3
14.4
19.4
Other
LT
0.1
0.5
2.2
TOTAL
298.1
420.7
593.2
Of which:
LT
283.0
403.5
553.7
ST
15.1
17.2
39.5
Source: Foreign Private investment 2012
2.8.2.1. Private Sector External Debt Stock by Maturity and Type
In 2012, 93.3 percent of the stock of PSED were in form of long term borrowing while 6.7 percent was short term borrowing, same trend as in 2011 where 96.0 percent of stock of PSED was long term, and 4.0 percent was short-term. Loans (excluding trade credits and others) amounted to $ 564.9 million, representing 95.2 percent of the overall debt stock and dominated by loan from affiliates with share of 51%, while trade credits represented 3.2 percent and others accounted for 1.6 percent.
2.8.2.2. Private Sector External Debt by Credit Type
Globally, the stock of PSED end of 2012 was largely from non-affiliates amounting to $ 305.3 million, increasing by 20.0 percent from $243.7 million recorded at end of 2011. Debt from affiliates increased by 38.5 percent from $ 177.0 million recorded end of 2011 to $ 287.9 million in 2012.
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Figure 8: Private sector external debt by relationships ($ million)
Source: Foreign Private investment 2012
2.9. Private Foreign Assets (PFA)
This section provides analysis of the stock of Private Sector Investments abroad (Foreign Assets). Foreign assets refer to holding of equity shares or lending to non -residents in form of loans, debt securities and trade credits or any other acquired assets by a resident entity in non - resident entities.
The census showed that PFA were in form of foreign direct equity, foreign portfolio equity and other investments. Foreign investments assets amounted to $ 74.2 million in 2012. The big share was in form of FDI loans and trade credits for 54.1 percent, other loans and trade credits to unrelated companies accounted for 46.9 percent. Sectors with foreign assets were mining ( 74.6 %), wholesale and retail trade (8.4 . %) as well as Finance and insurance (18 .0). Most of the assets are invested in Kenya, Switzerland and Tanzania with 78.9 percent of total stock of assets.
50.0 100.0 150.0 200.0 250.0 300.0 350.0 2010 2011 2012 AFFILIATES NON AFFILIATES
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2.10. Macro-economic analysis of survey findings
Table 16 shows some key analytical ratios of foreign assets and liability flows and stocks. In
terms of flows, FDI became increasingly important as a source of investment funds rising from
16.0 percent of Gross Fixed Capital Formation (GFCF) in 2009 to 28.0 percent in 2012; an
average growth of 23.8 percent per year. The ratio FDI/GFCF shows the contribution of FDI in
country‘s financing of capital formation. The importance of FDI to the economy is also shown
by the increasing share of FDI stocks to GDP during the last four years, growing from 7.1
percent in 2009 to 17.4 percent in 2012.
The share of debt stock to GDP shows a similar increasing trend from 3.6 percent in 2009 to 6.8
percent in 2012. However, despite the rise in the share of debt stock to GDP, the ratio of debt
service to debt stock fell from 11.1 percent in 2009 to 5.8 percent in 2012 showing dominance of
long term loans of more than 90%.
Table 16: Some analytical ratios of FDI flows and stocks (percent)
2009
2010
2011
2012
FDI Inflows/GFCF
16.0
36.4
14.6
28.0
FDI Inflows/GDP
3.5
7.6
3.1
6.1
FDI stock/GDP
7.9
12.9
12.9
17.4
Debt stock/GDP
3.6
5.8
6.5
6.8
Debt service / Debt stock
11.1
9.5
8.8
5.8
Debt service/Exports of goods and services
4.0
5.5
4.3
2.3
Return on assets of non-residents
2.2
2.8
1.2
2.4
Return on equity of non-residents
9.1
13.4
19.5
20.6
Source: Foreign Private investment 2012
Using the world available data on FDI return on equity, in 2012 the rate of return on FDI in
Rwanda compared to main economic regions was higher. The global rate of return on FDI was
7.2 percent, up slightly from 6.8 percent in 2011.
Rates of return remained low since 2009 in developed economies while in developing and
transition economies FDI rates of return were increasing.
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While the global average rate of return on FDI for 2006–2011 was 7.0 percent, the average inward rate for developed economies was 5.1 percent and the average rates for developing and transition economies were 9.2 percent and 12.9 percent, respectively. The African and transition economies consistently contribute to higher rates of return. According to the world investment report (2014), the first in return on FDI for the year 2011 was Angola with 87 percent, Bahrain with 50 percent and Rwanda would rank 8th with 19.5 percent. Rwanda is doing well in FDI profitability as shown in the table
Table 17: Economic regional comparisons in FDI Return on Equity 2009-2012 (percent)
Years
2009
2010
2011
2012
Transition economies
10.7
10.8
13
NA
Developing economies
8.7
9
8.4
NA
Developed economies
4
4.6
4.8
NA
Africa
10.8
8.8
9.3
NA
World
7
6.8
7.2
6.6
Rwanda
9.1
13.4
19.5
20.6
Source: World Investment Report, 2013
2.11. Other transactions
Beside the information directly showing inwards and outwards transaction of companies concerned by the census, it is also good 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.
2.11.1. Entity turnover
The country’s declared total turnover increased by 13.1 percent in 2012 compare to the level of 2011 from $ 3,187.1million to $ 3,604.3 million. The total turnover of the companies considered in this exercise increased by 7.9 percent from $ 995.0 million in 2011 to $ 1,073.4 million in 2012; contributing for 29.8% of the country’s total turnovers in 2012, dominated by
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manufacturing, wholesale and retail trade, finance & insurance and ICT sectors accounting for 61.7 percent of censured companies turnover.
Table 18: Entity turnovers by sectors in 2012 ($ million) Sector 2011 2012 Manufacturing 229.8 246.8 Wholesale 222.3 223.4 ICT 182.5 185.7 Mining 86.5 59.5 Agriculture 36.0 38.4 Tourism 22.8 18.4 Transportation 7.4 8.6 Financial & Insurance 187.6 192.3 Construction 11.4 3.7 Others 8.4 96.5 Total 994.6 1,073.4 Source: Foreign Private investment 2012
2.11.2. Exports-Imports 2012
In 2012, the census findings showed globally a net import of $ 145.7 million resulting from $ 221.1 million of exports and $ 366.8 million of imports made by the majority owned Foreign Companies. The agriculture and mining sectors recorded trade surplus of $ 56.4 million and $ 35.4 million respectively. Manufacturing sector, whole sale and retail trade as well as ICT were dominating the import side as shown in the following table. The main manufactured products exported are food products such as maize and wheat flour while exports from whole sale and retails trade are dominated by coffee and tea. The trade deficit of manufacturing sector shows the importance of raw material imports.
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Table 19: Exports-Imports in 2012 ($ million) Sector Imports Exports Trade balance Manufacturing 119.3 35.6 (83.7) Wholesale and retail trade 121.9 86.9 (35.0) ICT 52.5
(52.5) Mining 3.0 59.4 56.4 Agriculture 1.6 36.9 35.4 Tourism 2.0
(2.0)
Transportation and storage
0.7
0.1
(0.5)
Financial and Insurance
7.5
(7.5) Others 58.4 2.1 (56.2) Total 366.8 221.1 (145.7) Source: Foreign Private investment 2012
2.11.3. Employment
The total employment in foreign owned investments grew from 16,302 in 2010 to 30,717 in 2011 and 32, 834 in 2012, an increase of 6.9 percent between 2011 and 2012. Rwandans accounted for 98.0 percent of the total employment and the remaining 2.0 percent were foreigners. Foreign workers are mostly in managerial position representing 54.0 percent of total foreign workers.
Figure 9: Distribution of employment by type in 2012
Source: Foreign Private investment 2012
0 5000 10000 15000 20000 25000 Managerial Adminstrative Technicians Casual
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Regarding sector distribution of employment, mining had the highest number with 21.3 percent, followed by agriculture with 20.2 percent of total number of employees, real estate 20.1 percent; manufacturing 18.0 percent and finance and insurance activities have 13.0 percent.
Table 20: Distribution of employment by sector in 2012
Employment
2011
2012
Agriculture, forestry and fishing
8015
4274
Real estate activities
6183
6183
Mining and quarrying
4875
4756
Financial and insurance activities
3944
4083
Manufacturing
2817
5832
Administrative and support service activities
1509
1445
Information and communication
846
651
Wholesale and retail trade
808
770
Other services
1,720
4,840
Total
30,717
32,834
Source: Foreign Private investment 2012
2.11.4. Compensations of employees.
Annual declared value of total compensation of employees was $ 139.5 million of which salaries
and wages where dominating with a share of 82.0 percent. Local employees had a bigger share of
85.4 percent of total compensation due to their big number.
The best remunerating sectors were finance and insurance with 58.7 percent of total
remuneration, followed by manufacturing 12.9 percent and ICT for 12.0 percent.