Rwanda central bank pays govt dividends
Rwanda’s central bank — the National Bank of Rwanda (NBR) — has paid the government a dividend of Rwf237 million ($277,300) despite a 62.7 per cent drop in profit.
The bank reported a profit of Rwf677 million ($792,300), down from Rwf1.8 billion ($2.1 million) with the decline attributed to expenditure on software licences and staff costs
“The net profit excluding foreign exchange revaluation gain fell by Rwf1 billion ($1.17 million), largely due to provision for Oracle licences over the past three years and an increase in staff costs due to new staff recruitment,” said NBR in its annual report.
NBR also books unrealised revaluation gains of Rwf21.2 billion ($24.2 million) arising from an increase in its foreign currency reserves as a result of the depreciation of the Rwanda franc against international currencies by six per cent.
NBR becomes the first central bank in the region this year to contribute to government revenues after Kenyan and Ugandan regulators declared nil dividends.
The Central Bank of Kenya has not paid dividends to the Treasury in the past five years, despite making profits in three years during that period.
The law allows CBK to retain 10 per cent of its profits but does not mandate that it pass the surplus to the government.
Bank of Uganda posted a loss in the just concluded financial year and so could not pay dividends
The central bank in Rwanda is mandated to pay the Treasury as dividends all surplus after expenses and allocations to special reserves.
Thirty per cent of the dividend is, however, retained by the bank for settling national debt that was outstanding before 1997.
This year, Rwf203 million ($237,500) from the dividend was used to pay the consolidated national debt, which now stands at Rwf37.5 billion ($43.8 million) down from Rwf43.4 billion ($50.7 million) in 2002, when it was consolidated. NBR also retains 20 per cent of its operational profits in a general reserve account and 15 per cent in a social welfare fund.
Questions on whether banking sector regulators should pay dividends to the government linger, especially in situations where the regulators are deemed to be benefiting from market conditions at the expense of the public.
Critics of the payment of dividends argue that the surplus should be put in reserves to smoothen turbulence in the banking sector.
Rwandan celtral bank reported a profit of $792,300.