Foreign_Private_Investments_in_Rwanda_2012.pdf - Page 5

Table 21: Total compensation of employees in 2012 ($ million) Compensation 2011 2012 Financial services 43.0 81.9 ICT 20.0 14.2 Manufacturing 12.9 18.0 Wholesale & Retail trade 4.5 4.8 Tourism 4.0 2.0 Agriculture 3.4 4.6 Transportation 1.9 1.5 Mining 1.7 2.1 Other sectors 3.6 10.0 Total 95.0 139.5 Source: Foreign Private investment 2012

2.11.5. Actual investment

Actual investment is in land, buildings, machinery, vehicles, equipment and working capital.
During the period under consideration, total actual investment was $ 905.1 million. Plant and machinery accounted for 22.2 percent followed by building and civil works with 21.9 percent. This pattern is due to growing construction activities in different sectors and new green field investment in mining and manufacturing sectors.

Figure 10: Investments in assets in 2012 ($ million)

Source: Foreign Private investment 2012 Plants and Machineries Buildings Working Capital Inventories Work in Progress Land Other

20 40 60 80 100 120 140 Billions

In terms of sectorial distribution, ICT accounted for 34.4 percent remaining the highest followed by manufacturing with 20.1 percent and financial and insurance with 15.0 percent.

Table 22: Investments in assets by sector in 2012 ($ million) ASSETS 2011 2012 ICT 414 312 Financial 282 136 Manufacturing 211 182 Mining 75 15 Tourism 35 26 Agriculture 32 26 Wholesale and retail trade 26 83 Transportation 4 4 Others 3 64 TOTAL 1,084 905 Source: Foreign Private investment 2012

2.11.6. Corporate social responsibility

Corporate social responsibility is a corporate initiative to take responsibility for the company's effects on the environment and impact on social welfare. Those initiatives are directed to environment, infrastructure, educational programs, health and other social, cultural or community services that benefit the population. The contributions of companies to corporate social responsibility stood at $ 4.0 in 2012 from $ 3.0.million in 2011 and $ 2.0 million in 2010.

On average, most of the corporate social responsibility expenditures were dedicated to arts and culture (41.0 percent) - the big chunk went in Primus Guma- Guma. Donations to education were (9.4 percent), vulnerable groups (8.4 percent) and donation to other charity organization (7.4 percent). Manufacturing was the main contributing sector.

Figure 11: Corporate social responsibility by type of recipient in 2012 ($ million)

Source: Foreign Private investment 2012

Table 23: Corporate social responsibility by distributing Sector in 2012 ($ million) Sector 2011 2012 Manufacturing 1.5 2.2 Financial 0.4 0.5 ICT 0.3 0.4 Agriculture 0.2 0.2 Tourism 0.2 0.3 Wholesale and retail trade 0.1 0.1 Mining
0.1 0.1 Professional 0.1 0.0 Others 0.0 0.2 Total 2.8 4.0 Source: Foreign Private investment 2012

200 400 600 800 1,000 1,200 Millions

CONCLUSION

The foreign private capital results revealed that, foreign private investments in Rwanda have continued to grow and provide a drive for sustained economic growth. In 2012, private sector foreign liabilities i nflows to Rwanda increased by 14.8 percent to $ 409.3 million from $356.6 million recorded in 2011, indicating increased attraction of foreign investments from abroad.

The Rwandan FDI profitability expressed in rate of return on equity continues to be above the world average of 6.6 percent and among the highest in the world with 20 .6 percent in 2012 up from 19.5 percent in 2011.

Foreign Private Capital inflows into Rwanda in 2012 were in form of foreign direct investment, portfolio investment and other investme nts. They were dominated by foreign direct investment inflows and characterized by high retained earnings . The level of o ther investments inflows remained more or less the same as in 2011, while Portfolio equity investment inflows significantly decreased compared with the big jump recorded in 2011 with the first listing of companies on Rwanda Stock Exchange. In terms of country of origin, FDI inflows were mostly from Mauritius, USA and Switzerland with a share of 62.5 percent and investing mostly in ICT sector accounting 41.4 percent of total inflows. The stock of PSED was 41.0 percent higher than recorded in 201 1 level and was largely long -term borrowing mainly from affiliates and benefiting mostly to ICT, manufacturing and mining sectors.

In addition, foreign flows were becoming increasingly important in terms of investment and economic performance as evidenced by the growth of FDI in relation to gross fixed capital formation and gross domestic product and contribution to employment. Actual investmen ts decreased by 16.5 percent, entity turnover grew by 13.1 percent and compensation of employees by 43.5 percent globally showing a positive trend of all these indicators.
The country needs to continue sustain the achievements registered in the attraction and retention of private investments. The results of this study should be used as an indication of foreign private investment sectorial performance and as an evaluation tool of current interventions as well as the design of new policies and programs focusing on priority investment issues.

REFERENCES

Business Monitor International. (2011). E merging markets monitor , World Bank, Washington, USA.
Competitiveness Report (2012). Based on average ranking;
International Monetary Fund, (2009). B alance of payments , manual sixth edition , Washington, USA.
International Monetary Fund, (2012). World economic outlook, Washington, USA.
National Bank of Rwanda, (2012). Annual report 2011, Kigali, Rwanda.
National Bank of Rwanda, (2013). Annual report 2012, Kigali, Rwanda.
National Bank of Rwanda (2012). Foreign Private Investment and Investor’s perception 2011 report, Kigali, Rwanda.
The World Bank, (2011). Doing business 2012
The World Bank, (2012). Doing business 2013
World Bank (2013). Doing Business’ Rankings 2012 & 2013, World Economic Forum Global 11.

ANNEXES

Annex 1: Foreign Private capital inflows and stock by country in 2012 ($ million) 2012 Country Inflow Stock Mauritius
143.60
181.05
US 55.17
75.14
Switzerland
54.06
22.10
Luxembourg
43.16
82.30
United Kingdom
14.72
63.20
Kenya 14.54
113.37
Netherlands 14.48
64.78
Preferential Trade Area (PTA) 13.60
32.59
Export Import Bank (EXIM) 10.50
23.36
Canada 6.33
8.73
South Africa 6.33
117.08
Belgium 5.59
20.21
Togo
4.84
14.71
France 4.34
11.85
Nigeria
3.65
22.98
Tanzania 3.27
18.37
Uganda 1.91
6.65
United Arab Emirates
1.11
9.28
India
1.10
10.96
China (mainland only) People`s Republic of
1.02
3.96
Cyprus
0.79
23.77
Libya
0.77
58.97
Israel
0.71
0.71
Italy and Vatican City
0.68
2.09
Germany
0.51
49.76
Others 2.15
65.93
Grand Total 409.3
1,109.0

Annex 2: Rwanda Working Group on Foreign Private Investment Monitoring and Analysis

Coordination 1.KAYITESI Vivian, Director Investment Promotion and Implementation, RDB 2.MANZI Sebastien, Director of Economic Statistics Unit, NISR. 3.MWITIREHE Viviane, Director Statistics department, BNR.

Technical team

BAJIJI Innocent, RDB
HABIMFURA BADAGA Tite, BNR
KAVUTSE Emmanuel, RDB
MPAYIMANA Fabien, NISR
MUHORAKEYE Josephine, RDB
MUHOZA Modeste, RDB
MUYUMBU Innocent, RDB
NDWANIYE Desire, BNR
NKEJUWIMYE Clet, BNR
NTIRUSHWAMABOKO Dominique, BNR
NZASINGIZIMANA Tharcisse, NISR
SHYAKA Chris Picton, RDB
TUGEZAHIMANA Michel, BNR

iii

Annex 3: Questionnaire

Foreign Private Investments Census 2013 (Covering period 2012)

Please help us monitor economic development and formulate better policies

June 2013

Foreign Private Investment Census 2013

Dear Investor

The Government of Rwanda is conducting an enterprise census to obtain data on foreign assets, liabilities, and investor perceptions on the investment climate in Rwanda. The census is undertaken jointly by the National Bank of Rwanda, National Institute of Statistics of Rwanda, Rwanda Development Board and Private Sector Federation are officially empowered to collect this data. Your cooperation in completing this census questionnaire is highly appreciated.

Why do we need to collect this information and how do you benefit?

The collected information will be used in national, regional and international economic analysis for investment promot ion and facilitation. The information you provide is essential for foreign exchange, debt and reserve management, and for enhancement of economic growth, maintenance of price and financial system stability, and improving the ease of doing business in Rwanda.

Completing the Questionnaire

Given the importance of this exercise, we would appreciate the Director of Finance or Chief accountant fill the Foreign Assets and Liabilities part and the perception part be completed by the Chef Executive Officer. Do not hesitate to contact us if you have any difficulty completing the questionnaire our contacts are provided below. Please attach your financial statements for the year ended December 2012. Our staff will be visiting you and we would be most grateful if you would provide them with your cooperation. We would appreciate the filled in questionnaire to be ready within ten (10) days from the date of delivery.

Mandate and Confidentiality

The National Institute of Statistics of Rwanda under the Law n 009/2005 of 14/07/ 2005, The National Bank of Rwanda under the Law n 055/2007 of 30/11/2007 and Rwanda Development Agency under the organic Law n 053/2008 of 02/09/ 2008 mandate the implementation of this exercise. The information you supply will be kept stri ctly confidential and will be used for statistical and policy purposes only. Publication will only be in aggregate form. As a way of promoting dialogue we will share with you the results of this census in aggregate form and seek your further involvement.

THANK YOU FOR YOUR COOPERATION

FPI 2012 CONFIDENTIAL 2

Guidelines and Definitions

Who needs to complete this questionnaire? The Chief Executive Officer, Chief Finance Officer or a representative shall fill the questionnaire.
Do you need assistance?

Our interviewers are available for guidance on how to complete this questionnaire. In addition, the following offices are open for any inquiries;

Names Institution Telephone E-mail address Director of Statistics BNR 0788309163 [email protected] Director of economic statistics NISR 0788762655 [email protected] Director of Investment promotion and Implementation RDB 0788306191 [email protected]

Part 1 Should be completed by ALL respondents.

Reporting period

This questionnaire requests for stock data on a calendar year basis (i.e., from 1st January to 31st December) for Parts 1 – 4 and transactions within the calendar year 2012. If your entity’s financial statements are prepared on any other financial year basis other than on the calendar year, please take one of the following steps. If you produce: Quarterly or semi-annual accounts please consolidate these so that the data you submit is consistent with the specific period requested for. 4. Currency of reporting Please provide data in Rwandan Francs (RWF).

Units of Reporting Please report all data in actual amounts (to the last unit). For example, enter six million seven hundred eighty five thousand seven hundred forty one as 6,785,741 (and not as 6.786m). Please report all data in units.
Residency

FPI 2012 CONFIDENTIAL 3

In this questionnaire, residency considers the centre of the economic/business interest. You are a resident individual or enterprise if you have lived or operated (or intend to live or operate) in Rwanda for a year or more, regardless of your nationality. Non -resident individuals or entities are basically the rest of the world.

Investment (Enterprise) relationships

A direct investment relationship arises when an investor resident in one economy makes an investment that gives control or a significant degree of influence on the management of an enterprise that is resident in another economy. Control is determined to exist if the direct investor owns more than 50 per cent of the voting power in the direct investment enterprise (also called a subsidiary). A significant degree of influence is determined to exist if the direct investor owns from 10 to 50 percent of the voting power in the direct investment enterprise (also called associate). Therefore, Direct Investment is defined as any ownerships stake held by a non-resident in your entity that is 10% or more of total equity. The control or influence may be immediate (through ownership of voting power) or indirect (through ownership of enterprises that in turn have voting power). Ownership in your entity by non-residents that is less than 10% of the total equity and tradable is considered as Portfolio Investments (PI).

However, there are other investment relationships that are also of interests. These include your entity owning more than 10% of the total equity of a non-resident investor that in turn holds less than 10% of your equity stake. The 10% holding by such a non -resident investor is referred to as reverse investment and the non -resident investing enterprise is called a Direct Investment Enterprise/Entity (DIE). A resident fellow enterprise is an enterprise resident in Rwanda that is in a direct investment relationship with a non -resident enterprise because they have a common parent that is a Direct Investor (DI) in at least one of the enterprises; and neither of the fellow enterprises holds 10 percent or more of the equity in the other.

Dividends Declared and paid/received and Profits Remitted

Dividends are earnings distributed to shareholders or equivalent equity holdings for incorporated private entities, cooperatives and public corporations after payments of interest on debts and taxes.

FPI 2012 CONFIDENTIAL 4

i). Dividend Paid/Profits remitted: Dividends are declared returns on a shareholders’ equity whereas profits remitted/paid apply to transfer of net earnings from a branches (unincorporated entities) to its non-resident parent enterprise. The payment of the dividends or remittance of profit may be executed during the following financial year depending on the entity’s policy and cash flow.

Net Profits and Retained (Reinvested) Earnings

Net profits are the gr oss profits less corporation tax. Retained (reinvested) earnings are undistributed profits that are capitalised in the entity. Retained earnings/losses are computed by taking the net profit/loss fewer dividends declared for the period. Net profits and reta ined earnings/losses are requested for in Tables 2.3 and 3.3 for all entities.

Financial Instruments

Financial instruments consist of Equity and Non-equity i) Equity refers to all shares held in entities or the equivalent ownership interest in an incorporated entity. (Paid-up share capital, share premium reserves, accumulated retained earnings, revaluation and any other financing item of an entity.) ii) Non-equity refers to all other financial instruments including loans, trade credits (for goods and services), bonds, debentures, notes, money market instruments, shareholder and inter-company loans, arrears of debtor interest, currency, deposits etc.

Other Claims other than equity and loans

These include: insurance, pension and standardised guarantee schemes, employee stocks options, custody accounts or administered funds, outstanding franchise fees, and other claims not mentioned here. These consist of the following: i) Nonlife insurance technical reserves: These are provisions for unearned insurance premiums or outstanding insurance claims identified by the Insurance Corporation to cover what they expect to pay out arising from events which the claims are not yet settled.

FPI 2012 CONFIDENTIAL 5

ii) Life insurance and annuity entitlement: These consist of reserves of life insurance companies and annuity of providers for prepaid premium or accrued liabilities to life insurance policyholders and beneficiaries of annuities. iii) Pension entitlement: These show the extend of financial claims that both existing and future pensioners hold against either their employer or a fund designed to pay pensions earned as part of the compensation agreement between the employer and employee. iv) Provisions under standardised guarantee schemes: These are usually guarantees schemes provided by government or financial corporation such as export credit guarantees and student loan guarantee. You are required to report any claim due if your entity has acted as a guarantor.

v) Employee Stock Option: These are options to buy the equity of a company, offered to employees of the company as a form of remuneration. It is commonly offered to Chief Executive Officer (CEO) and employees of listed companies as bonus remuneration or rewards. You are required to report the employee stock options offered to non-residents and vice-versa.

vi) Custody Accounts / Administered Funds: These are accounts/funds created at a bank, brokerage firm or mutual fund company that are managed on behalf of a group of clients. Transactions and positions should be recorded at book value.

vii) Outstanding franchise fee: These are payments made for the use of trademarks or brand names. Any outstanding claim should be reported.

FPI 2012 CONFIDENTIAL 6

PART 1

General Information

(All respondents should complete Part 1, while for Parts 2 and 3; the filtering questions will guide you on which parts to fill)

1.1 Name, Contacts and other information

1.1a Name of Entity: ____________________________________________________________________________

1.1b
Contact Person and Position ___________________________________________________________________

1.1c
Alternative Contact Person and Position _________________________________________________________

1.1d Physical Address:_______________________________ Postal Address: ___________________________

Tel: __________________________Fax:

E-mail: _____________________________________Website: _______________________________________

1.1e Date of Commencement of Operation:_______________________________________________________

1.1f
Status of Company ( tick): 1.Greenfield investment, 2. Acquisition; 3. Extension of capital (Additional

new investment); 4. Financial restructure; 5. Mergers; Purchase/Sale of existing equity in the form of

mergers; 6. Others

1.1g. Investment Certificate Number (if any): ______________________________________________________

Table 1.2. Shareholding Structure of the enterprise as at 31st December 2011, 31st December 2012 Name of shareholder* Country of residence Investment Relationship: Direct Investor (DI), Direct Investment Entity ( DIE), or Fellow Enterprise (FE), PI Percentage (%) shareholding

31 Dec. 2011 31 Dec.2012 1.

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