Category Archives: Rwanda

Plane Moments: Mostly KQ

 

  • Precision Air:  Kenya Airways and it’s associate company, Precison Air Services are working on a commercial alignment with respect to pricing on joint venture routes. They have applied to Kenya’s Competition Authority for an exemption as the regulator does not allow two similar airlines to have the same ticket pricing. Read more on Precision Air in which Kenya Airways has a 41% shareholding.
  • Kenya Gets Protectionist:  Kenya is limiting the issuing of new licences for global airlines seeking to exploit the strategic Nairobi hub in a protectionist move aimed at reviving the dwindling fortunes of national carrier Kenya Airways. Transport Ministry Principal Secretary Irungu Nyakera said Kenya is doing what the US and the European Union are doing, limiting the frequency of Middle East carriers because they have realised they are killing their own airlines, leading to job losses.  
  • Tanzania is revamping its national carrier by buying new planes as part of plans to boost tourism and transport sectors.  The country received delivery of two Bombardier Q400 planes in September at a cost of $62 million and has also made initial payment for the purchase of a Boeing 787 Dreamliner, which is expected to be delivered on June 18.
  • Nigeria airline takeovers: The takeover of the nation’s biggest airlines, Arik and Aero airlines by the undertaker, the Asset Management Corporation of Nigeria (AMCON) may have exposed some management lapses in the private sector.. some of Arik’s missteps to include “starting off its international services with the gas guzzling ultra long-range Airbus A340-500s literally guaranteeing losses on its relatively short-range services to London, South Africa, New York and Dubai. It also bought 10 of the relatively cost inefficient Boeing 737-700s used mostly by short-haul, low-cost airlines like Southwest Airlines. It only has four of the more efficient and versatile Boeing 737-800s suitable for high-capacity routes such as Lagos to Abuja and Lagos to Port Harcourt, as well as regional routes to West and Central Africa.”
  • RwandAir will start direct flights to India’s commercial centre Mumbai on April 3…it also plans to start flights to Gatwick, London’s second-busiest airport, and to the US this year as part of its strategy to serve more global markets.
  • The CEO of apologized for customer frustrations  over the last few months.  They have since introduced a new introduced a brand new Bombardier Q400 next generation aircraft to further enhance flight schedule integrity.
  • Etihad Airways Engineering has signed an agreement with Kenya Airways to perform mandatory checks on its six Boeing 787-8’s between February and October 2017.  Etihad Airways Engineering is the largest commercial aircraft maintenance, repair and overhaul (MRO) services provider in the Middle East.

 

I&M Bank Rwanda IPO Launched

Yesterday, I&M Bank Rwanda launched an IPO share sale that will result in the listing of the bank’s entire share capital at the Rwanda Stock Exchange. The Government of Rwanda will sell its entire 19.81% in the bank as part of its divestment from public enterprise policy, and through the sale of 90 million shares of the bank, they hope to raise 8.9 billion francs (~$10.8 million), which will go to the Rwanda government after deducting expenses.

Quick Notes

  • Minimum is 1,000 shares at RWF 90 per share, therefore the cost of investment is RWF 90,000 (~approx $109 or Kshs 11,350). Further purchases are in blocks of 100 shares.
  • Opens 14 February, closes 3 March 2017.
  • Allotment plan: 40% of the shares are reserved for international investors and 60% for domestic investors. The domestic pool is further broken down with 25% reserved for East African nationals, 5% for employees of the bank, 15% for Rwanda institutional investors (QII’s) and 15% for other East African QII’s.
  • The Plan is to list and trade the shares, in Kigali, as ‘IMR’ from 31 March 2017.

IN 2015, I&M Bank Rwanda (IMR) was the 3rd largest bank in Rwanda by assets (RWF 171 billion), behind Bank of Kigali (RWF 561 billion), and Cogebanque (RWF 178 billion). Other banks were KCB Rwanda (RWF 149 billion) and Equity Rwanda (RWF 93 billion). For 2016, IMR had assets of 206 billion francs in 2016, loans of 111 billion and deposits of 134 billion and a pretax profit of 8.4 billion francs. It’ has 17 branches, and plans to build a new headquarters ($25M) and install a new IT system ($4M). It’s business is in four mains sectors – construction, wholesale & retail, manufacturing, and agriculture.

I&M Bank Rwanda (formerly Banque Commerciale du Rwanda Limited – BCR) is the Rwanda subsidiary of I&M Holdings Limited. I&M Holdings listed on the Nairobi Securities exchange in June 2013. It is the oldest financial institution with over 50 years of existence and the first bank in Rwanda, having been incorporated in 1963Actis recapitalized the bank and became an 80% owner in 2004 and sold that 80% stake in 2012 to I&M (55%) and the governments of Germany and France who, through their development finance institutions of DEG and Proparco respectively, each retain 12.5%.

Odd points

  • IMR has entered three snap transaction with the National Bank of Rwanda regulator) in which I&M has given $8 million to the regulator in exchange for local currency. I&M will receive 2% interest and pay the NBR 8% interest in local currency.
  •  In Rwanda, bank directors sign conflict of interest statements?!

More details in the prospectus from Dyer & Blair Investment Bank, who, along with BARAKA Capital Limited Uganda, are Lead Transaction Advisors. BARAKA Capital Rwanda is the Lead Sponsoring Broker.

1 KES = 7.93 RWF and 1 USD = 823 RWF

RwandAir Airbus A330

After almost three hours winding through about a dozen checkpoints and queues inside Murtala Muhammed International Airport in Lagos, it was quite a pleasant sight to get to see daylight and planes lined up.

Three days before, Rwandair flight 200 from Kigali to Lagos was operated by a B737-700 and 201 from  Lagos to Kigali was also meant to be on a similar aircraft, but parked in at the gate  was an  unusually large Rwandair plane.

RwandAir recently acquired an Airbus A330-200 (christened Ubumwe) and with another Airbus A330-300 due in November, they are making a big splash about the planes. The new aircraft even featuring in minister’s speech in Lagos and on TV and newspaper advertisements about Rwandair connecting Africa (never mind that Ethiopian, KQ, SAA, Arik have had similar wide-body twin jets for a decade).rwanda-a330-2

On this day, many of the electronic systems at the Lagos  airport were down, and virtually everything was done manually, with boarding passes written by hand. At check-in, I had asked for an aisle seat and the man at the counter nodded in acknowledgment, but when I looked at my boarding pass, my seat number was “F/S” – as was everyone else’s – this meant “free-seating”.

The airline staff at the boarding gate first ushered in the passengers who were in business class, and this included Clare Akamanzi,  Head, Strategy & Policy Unit, Office of the Rwanda President, who had been down in the queues, and gone through the whole laborious check in process like an ordinary passenger, including having her suitcase opened, then wrapped for security purposes. The airport staff said she was a Minister but clearly she did not behave like any minister they might have seen.

Other passengers were then allowed on board, with through the jet bridge that had been placed at a mid-cabin door and were then directed to pick any seat in economy class. The new plane has two large economy class cabins, a small premium economy one, and a business one near the front, for a total capacity of 274 passengers. Everyone in economy flopped into a seat relieved at the abundance bin space and many empty seats on the flight.

Points about the flight, using this borrowed format (via AU traveller)  

Airline review: RwandAir economy class, Lagos to Kigali

The airline operates a dream miles program on a visa card, but this was only my first round trip with RwandAir. The airline is also not part of any miles alliance partnership now.

rwanda-a330CLASS: Economy, window in the third row of the second cabin.

DURATION: 4h 30m.

FREQUENCY: WB 201 between Lagos to Kigali is 4X a week: Mon, Wed, Fri, Sun  (12:00 17:30)

THE SEAT: The configuration here is 2-4-2 in both economy cabins and many of the seats were empty. All the seats have personal touch screen entertainment displays, with light and flight attendant controls. There is also a USB  charger next to the screen.

ENTERTAINMENT: The touch screen system was quite nimble. My first set of headphones, given out after take-off did not work, but the second one did. You touch the screen and pick out  movies, TV clips, and games. The selection is rather thin, and you have to pause to escape from a menu but the system is nice once you’re used to it.

The touchscreen menu options are in 6 languages – English, Kinyarwanda, French, Swahili Arabic, and Mandarin?/Chinese. There were other menu options like gambling games, a kids selection with games and movies and a music selection – with pop hits, African, Classical etc. I flipped back and forth between “Batman vs. Superman” and “Avatar” movies, and the system allows you to resume from where you left off in any movie or game.

BAGGAGE: This was dictated by Murtala airport where there is an elaborate  but time-consuming luggage procedure of weighing, tagging, scanning, searching physically, then wrapping the bags . A friend who had flown in from Kigali with two small backpacks was now told he could only carry one bag on board and check the other one as luggage on this RwandAir flight. We all lost our luggage and filed reports in Nairobi and the luggage has just been delivered (two days later).

COMFORT: Both the RwandAir legs between Lagos and Kigali are afternoon flights that arrive in the evening and match morning arrivals and night departures from Kigali, Rwanda.

SERVICE: The flight took off about twenty minutes late and there were several apologies made during P/A announcements to passengers.  In addition to the entertainment system, there is a Wi-Fi service on board though I was not able to connect. But @LucyMbabazi did on the very next RwandAir Airbus A330 flight and she happily reported on that, and other niceties  like a  massage chair. lucya330biz

 FOOD: There was a chicken or beef option with lunch about an hour into the flight.  The crew had two meal services sessions, one with the meal, a beverage before touchdown from which they did not deviate . They were rather stingy and would not add an extra beer, unlike the crew on the earlier RwandAir 737 flight. They also serve Rwandan coffee or tea. The meal serving trays are rather small, and you find yourself placing wrappers and utensils in your lap as you peel and eat.

ONE MORE THING: On landing in Kigali, RwandAir ground staff knew that there were late passengers connecting on  to other flight and they gave them priority with simultaneous  immigration and check-in e.g. for Entebbe, Johannesburg and Nairobi They had even pre-printed boarding passes for some passengers, and called them up by name to rush them through to the next flights –  nice attention to detail!

rwanda-a330-3

Some facilities are different about the  plane and that may mean they may have some breakages e.g with the bathroom doors that fold in the middle to open, rather than swing out (many passengers pushed and pulled them) and the headphones have a jack you fold in half to insert and use) .

THE VERDICT: Nice RwandAir flight on the new aircraft. The crew was probably testing out the new A330 and wanted to be efficient with a minister on board.

Reading the Tea Leaves at Crane Bank

On October 20, the Bank of Uganda (BoU  – the country’s banking regulator) took over (PDF) the management of  Crane Bank and stated that:

  • (Crane was( significantly undercapitalised (and) poses a systemic risk to the stability of the financial system (and) ..  in its current form detrimental to the interests of its depositors.
  • BoU  appointed a statutory manager and suspended the Board of Directors of Crane Bank
  • Crane Bank will remain open and its operations will continue normally, but under the management and control of BoU.

Tweets about Crane Bank Crane Bank was started in 1995 and was said to be the fourth largest bank in Uganda. It had 46 branches in Uganda and 2 in Rwanda, where the bank regulator has said that the Crane Rwanda subsidiary licensed in 2014 is solid and will remain unaffected by the closure of the parent in Uganda.

In its 2015 supervision report, the Bank of Uganda made reference to the performance of domestic systemically important banks – Stanbic bank, Standard Chartered bank and Crane bank which accounted for 36% of total banking sector assets. ..there was a decline in asset quality among D-SIBS with NPL ratio rising from 3.5%  percent in December 2014 to 7.6% (and) while this reflected the general performance of the banking sector, the decline in quality among DSIBs was also on account of the performance of one bank with a significant exposure to one borrower. All the DSIBs have adequate capital to absorb losses.

Crane Bank is an award-winning indigenous bank in Uganda, and was audited by KPMG. Like Chase Bank in Kenya it was said to be a fast growing, darling of entrepreneurs, paid higher interest rates to depositors, and progressive in its outlook to entrepreneurs and business people – with lot’s of referrals by word of mouth and repeat business from customers.

But one difference from Chase Bank is that while there was the bank was very inactive on social media , Crane had posted only 2 tweets this year even as there was a storm of social media posts leading to the take over last week.

The 2015 annual report of Crane notes that:

  • The Bank’s loans & advances reached  UGX 1,010.9 Billion against UGX 836.9 Billion in 2014  
  • Customer Deposits grew from UGX 1,267.5 Billion in 2014 to UGX 1,336.6 Billion in 2015 indicating the growing confidence of our patrons and customers.
  • The bank added about 75,000 accounts during the year, pushing the total number of accounts to 499,133 as of December 2015.
  • The bank is controlled by Dr Sudhir Ruparelia who controls 48.67% of the voting rights in the bank.. at 31 December 2015 advances to companies controlled by directors or their families amounted to Shs. 1,003 million (2014: Shs 4,639 million). All the above loans were issued at interest rates of 16% (2014: 16%) and were all performing as at 31 December 2015 and 2014.
  • The aggregate amount of non performing loans and advances was Ushs 142,358 million (2014 – Ushs 19,362 million).
  • As at 31 December 2015, the bank had no exposures to a single borrower or group of borrowers exceeding 25% of its total capital
  • (importance in tax collection) The bank maintained its position among top collection agents for UMEME / NWSC and (is) in Ppartnership with URA to do all URA PIN generation and KCCA COIN registration and all URA & KCCA payments. Bill payment is currently enabled through Internet banking.

Other news stories:

  • A few months ago, the bank’s principal shareholder spoke with Red Pepper about the impending sale of a stake in the bank.
  • The East African has a story on how employee tipoff may have led, government, large and foreign depositors to withdraw huge sums from the bank as talks with suitors like Atlas Mara got more complicated.

$1 = ~UGX 3,414. 

ALU: Africa’s University of the Future

The African Leadership University (ALU) is a pan-African university, which  aims to prepare students for jobs that don’t exist today. Their programs aim to equip students  with necessary skills including entrepreneurship, leadership, critical thinking, and project management – right from their first term. They have an intense online engagement process to monitor student performance that starts right from the time students apply and  through admissions, assignments, courses, exams and assignments.

Their current degrees on offer at their Mauritius campus are Computing (Bsc), Business Management (BA), Social Sciences (BA) and Psychology (Bsc) . It opened in September 2015, and has over 200 students from over 30 African countries.  Every year, students can get up to 4  months of internship at one of the ALU partner organizations which include Cellulant, Coca Cola, McKinsey, Tiger, IBM, PWC, Thomson Reuters,  Pernod Ricard and Swiss Re. The partners also help subsidize the cost of education at ALU where year of tuition and accommodation is about $,7000 – a modest amount compared to the cost of university education in many countries.

They also have a study abroad program that takes 4-12 months and ALU will have an MBA program at a new campus that will soon open in Rwanda, and for which they are already accepting applications. ALU is part of the Africa Leadership Group, and has founders including Fred Swaniker, Graca Machel and Donald Kaberuka. Eventually, they plan to have  25 campuses across Africa that can host 10,000 students a year.

ALU teams are currently on road shows to promote the university in Accra, Nairobi, Johannesburg, and Lagos. They have a workshops, schools visits, and other events this month as they promote the university, and they are accepting applications up to a deadline on June 5.