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Rwanda: Government to Increase Exports By 17 Percent
By Eddie Nsabimana
Rwanda is looking to increase its exports base by 17 per cent annually. The revelation was made Wednesday by Trade and Industry Minister, Vincent Munyeshyaka, during the 3rd National Exporters’ Conference in Kigali.The conference brought together different development stakeholders in trade, including government institutions, private sector and other business partners.
“This is indeed a very interactive platform for discussion from which key constraints that slow down export growth and new opportunities to increase exports are discussed.
Recommendations are formulated to come up with mitigating strategies to ensure that constraints to export promotion are not only alleviated, but also to make sure that the business community is taking advantage of opportunities that are existing in our economy,” Munyeshyaka said.
Statistics on Rwanda’s trade performances on exports in 2017 indicate that Rwanda exported over 7000 tons in 2017, according to Steven Ruzibiza, the CEO of the Private Sector Federation.
The feasibility of the government’s exports’ growth targets will be sustained by reducing the cost of doing business and facilitate trade by implementing different key designed business projects.
“We not only want to increase exports but we also try to see if we can have some import substitutions and the progress of the trend is quite encouraging although more efforts are needed to reach our potential,” he added.
The export performance on goods and services has gone up by 8 per cent in the last seven years, from 10 per cent in 2010 to 18 per cent in 2017, with only services, largely dominated by tourism, contributing 15 per cent comparing to goods’ contribution at 21 per cent.
In 2017 itself, Rwanda’s exports had an impressive growth at 32 per cent from diversification on Meeting, Incentives, Conferences and Events (MICE), flowers, services and favorable commodity prices.
However, the challenges remain in overreliance of traditional exports, and low interregional trade besides lack of proper infrastructure, transport cost, production cost, market access cost and access to finance that need proper and kind attention in solution formulation.
To address these challenges, some of the projects lined up to be implemented in the future include an appropriate railway connection and initiate construction, the construction of 800 km of national asphalt roads, operationalizing Kigali Logistics Platform, bonded warehouses and work with private sector to develop international transport and logistics companies.
Other projects include the construction, rehabilitation and maintenance of 3000 km feeder roads, construction of new modern cross border markets and mini ports in Rusizi, Nyamasheke, Karongi and Rubavu Districts to facilitate cross border trade as well as the construction and development of industrial parks in provinces in addition to the expansion of the Kigali Special Economic Zone with capacity to accomodate 350 companies operating therein by 2024.
The government also plans to scale up and reform export growth fund to increase access to finance for exporters in addition to building potential partnerships with regional exporters to share some business opportunities and draw some lessons from them and share experience with export champions.
While bilateral regional negotiated agreement and African continental Free Trade area are in process.
Minerals and tea and coffee exports are the most exported products on the international market, but PSF’s Ruzibiza said that more efforts were needed to attract investments into agro-processing, construction materials, light manufacturing, meat and dairy, leather, textiles and garments , horticulture, tourism (including MICE tourism), knowledge-based services, logistics and transport.
“We need to make sure that exports in other areas like services are enhanced and we can achieve this as long as we continue to closely work with the government and see how best we can exploit the Export Growth Fund”
To achieve the government’s exports growth targets, the Ministry of Trade and Industry has designed key strategic interventions including the progressive promotion of ‘Made in Rwanda’ brand by working with the private sector to recapture at least USD 400 million of imports by 2024.
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https://allafrica.com/stories/201701050177.html
Rwanda: Is Made-in-Rwanda Campaign Paying Off?ANALYSIS
By Collins Mwai
Rwanda’s trade deficit reduced by 5.1 per cent for the better part of last year, largely due to the ongoing Made- in-Rwanda campaign, an initiative that promotes consumption of locally-produced goods and services.Trade deficit is amount by which the cost of a country’s imports exceeds the value of its exports.
According to the statistics, released by the central bank last week, Rwanda’s trade deficit reduced from $1,602.21 million to $1,519.97 million in the first 11 months of 2016.
The central bank’s Monetary Policy Committee said the drop was due to an increase in formal exports by 6.1 per cent as well as a decrease of formal imports by 2.4 per cent in value.
The Government has for the past two years embarked on a drive to promote Made-in-Rwanda products by encouraging more production and consumption of locally-manufactured goods.
Through the Ministry of Trade, Industry and EAC Affairs, the Government has put up strategies to improve export volume and value in the coming years to tilt the current level of trade imbalance.
On Tuesday, Francois Kanimba, the minister for trade, industry and EAC affairs, told The New Times that the impact of the initiative in reducing the trade deficit had come faster than expected.
“we expected a decrease in trade deficit but to be honest we had not quantified this on annual basis particularly on the first year,” he said.
A study conducted by the ministry estimates that the initiative will have an impact of about $450 million in the medium term.
“We are doing more analysis to understand what products had the biggest roles and which ones were most affected. In itself it’s a good outcome. In our study conducted three years back, we estimated an impact of $450m in the medium term. It takes time but it is coming,” he said.
Cimerwa sets the pace
Among the local firms that contributed to the reduced trade deficit was cement producer Cimerwa, which, Kanimba said, can still perform better as it is currently operating at 56 per cent capacity.
In August 2015, Cimerwa launched a $170 million (about Rwf126 billion) plant in Rusizi District, increasing its production capacity to 600,000 tonnes a year from 100,000 previously.
This can meet the growing local demand that currently stands at about 450,000 tonnes of cement, driven by the increasing demand for cement by the local construction and real estate sectors.
The surplus output is targeted for the export market in the region, especially Burundi and DR Congo.
During the course of 2016, Cimerwa stepped up production capacity compared to previous years. This, coupled with market penetration strategies, saw higher consumption of locally-produced cement, undoing years of high imports in the construction sector.
Kanimba said recent statements from various industries in the country show increased turnover, especially among firms producing consumer goods.
Central bank governor John Rwangombwa said while the development is positive in terms of trade deficit, it can be explained by two factors; Cimerwa starting to produce more than they have done in the past couple of years and reduction in importation of intermediate goods.
Trade deficit reduction can happen as a result of several scenarios; increased consumption of local products or reduced imports due to economic hardships.
In an ideal situation, the reduction of the trade deficit should be characterised by increased exports and consumption of locally-produced goods.
Donatien Mungwarareba, the Private Sector Federation (PSF) director for advocacy, communication and labour relations, said the impact was a result of partnerships and joint efforts between local producers and other industry stakeholders, including the Government.
“We were expecting an impact like that when we started this campaign. We need to continue reducing the trade imbalance. When we met the President last year, PSF outlined plans to reduce trade deficit by between 30 and 50 per cent in the next five years,” Mungwarareba said.
He said they had also collected feedback from clients of the various sectors with most of them happy about the quality of products. However, most clients took issue with shortfall on marketing.
“We will be focusing on marketing and outreach of locally produced products in and out of the country,” he said.
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“According to the statistics, released by the central bank last week, Rwanda’s trade deficit reduced from $1,602.21 million to $1,519.97 million in the first 11 months of 2016.
The central bank’s Monetary Policy Committee said the drop was due to an increase in formal exports by 6.1 per cent as well as a decrease of formal imports by 2.4 per cent in value.
The Government has for the past two years embarked on a drive to promote Made-in-Rwanda products by encouraging more production and consumption of locally-manufactured goods.”
Very impressive!
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100,618
Abibisika (Black Gold) Points
Indeed!
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