Local bankers in Rwanda predict that the economy might continue to suffer for the next three to five years because of negative effects of the #COVID-19 pandemic.
Taarifa talked to the industry captains Hannington Namara, the Managing Director of Equity Bank Rwanda and Robin Bairstow, CEO of I&M Bank Rwanda.
“The lockdown put a complete stand still to Rwanda’s largest contributor to its GDP which is services specifically tourism and travel”, Namara says.
According to Namara the dire economic situation will hang on with us for more than three years. And that paints a depressing picture that the local business community and the general citizenry should get used to, the so called new normal.
“While looking at events surrounding the #COVID-19 pandemic, we do not know how long the pandemic is going to be with us,” says Namara, whose Bank made about Rwf2billion of profit in the first quarter of 2020, but says the second quarter, even shareholders might have reinvest because there is no money expected.
Rwanda has been deeply reliant on tourism and travel for its large contribution to the country’s GDP. But disruptions of the travel industry supply chain that feeds into Rwanda’s hotel and tourism sector means that arrivals of visitors into the country is expected to drop below expectations.
“Leisure product is something that will take more than 5 years for the major source markets of Western Europe to think about as virtually the entire world has been hit badly by the pandemic”, he explained.
To create a sense of trust that their livelihoods will be safe in far flung markets such as Rwanda, Namara says that this is something that will take a bit of time.
“This means that investments in these sectors will remain largely dormant with negative spillover effects to be felt in several others including banking,” Namara explains.
“This paints a scary image but what investors ought to do is to reinvest in their businesses with a view to hold on to hope for a brighter future.”
Meanwhile, a major player in the tourism sector told Taarifa that they have some relief from the local tourism sector.“Unless a miracle happens, the international segment is dead, let’s not debate that, but we believe the local tourism segment can be revived and made profitable,” he says, and hesitant for his name to be mentioned.He insists that Rwanda Development Board needs to create local tourism products defined in the confines of the […]
