John Rwangombwa, Governor of the National Bank of Rwanda, tells us about the country’s strong monetary policy, ambitious targets for growth and Rwanda’s potential to become a regional financial centre.
European Times: How would you assess current monetary policy and its impact on growth?
John Rwangombwa: Price stability is well maintained with Inflation currently at 0.5% from 3.7% end June 2013. The environment is stable with an accommodative monetary policy, supportive of economic growth which has been at 7.5% in Q1, 6.1 in Q2 and we expect to achieve or even surpass the 6% target for the country by end this year. The financial sector has continued growing stronger and stable. Banking assets have grown by almost 28% in one year with 31% growth in deposits and two new financial institutions have entered the market. Three new investors have also come into the insurance sector bringing more capital technical knowhow. Non-performing loans have reduced from 9.2 to 6.2% currently.
European Times: The major target audience of our publication is large banking firms. Why should a bank like ING or Barclays gauge potential here in Rwanda?
John Rwangombwa: It depends on what they are focusing on; if they are looking at retail banking, there is potential because as I speak we have access to finance at 42% and our objective is to grow it to 70% by 2017 and minimum by 80% by 2020. For corporate, we have created an environment that is very conducive tor private investment. The potential of having more big firms investing with us is big since most of these are investing targeting the entire East African region.
European Times: What are the key challenges for the bank to ensure growth and stability moving forward?
John Rwangombwa: The financial services sector has been growing, but the big question is how you make this a source of promoting growth. We are trying to attract foreign investors to the capital market and are working with the World Bank to promote this institution. We want to create an environment where funds feel confident in working with us, so we can tackle issues like funding for start-ups.
Rwanda’s economy is ripe for investment and investors should not look at the country as a single market, but as a centre for the East African region.
