Experts discuss Rwanda export sector

Minister Francois Kanimba addressing Rwandan Exporters

Minister Francois Kanimba addressing Rwandan Exporters

The ministry of Commerce and Industry on Tuesday, held a meeting with Rwandan exporters to come up with an Action Plan for Exports 2014-2015.

The meeting analyzed Rwanda’s Export Sector and proposed export interventions to spur the sectors performance as a part economic development strategies.

The Exporters’ Meeting was opened by Minister François Kanimba and is being attended by all exporters operating in the country and several experts in the exporting field.

Kanimba reminded exporters that regional markets are an important entry points for the local firms and that increasing Exporting Firm Numbers and Firm Survival rates will lead to higher Aggregated Exports and more competitive firms.

He said that mineral Exports continue to show large annual variance in output and export revenue. Services Sector is growing in some sub sectors but rapid growth is much anticipated in the next two years.

During the meeting it was also highlighted that manufacturing & agro-processing is most likely to deliver export impact through higher export orientation.

Rwanda exports grew by a much faster rate than imports in 2013 leading to a 4 percent reduction in Rwandan’s merchandise deficit. Improving export environment and strategically focused support mechanisms can increase home grown exporters.

The government also commissioned a study on Trade Logistics which will ease the trade logistics for local and regional exporters and Minister said that it’s important for exporters to consult Rwanda Revenue Authority on issue of VAT for exports and reach a consensus on the issue.

In spite of the government’s efforts to diversify the economy, Rwanda is still heavily dependent on natural resources and commodities.

Agriculture continues to be the largest source of employment, providing jobs to 73 percent of the workforce, yet only accounts for 36 percent of output. Commodities make up 77 percentof Rwanda’s exports.

Although their contribution to GDP remains marginal, minerals (notably, cassiterite, coltan – columbite- tantalite – and wolfram or tungsten) accounted for 28 percent of total export earnings in 2012, the remainder being primarily agricultural commodities.

Rwanda’s structural transformation faces three significant challenges:

Productivity remains too low, particularly in agriculture, to support the development of employment in other sectors; lower food prices; and to ensure that farming is profitable.

Others include high population density (now estimated at 12 million) continue to strain available natural resources and the environment, while both domestic and external financing have hampered efforts to diversify the economy.

World Bank listed Rwanda among top performers in Doing Business in 2013 and Rwanda’s economy has sustained growth despite the negative effects of external shocks brought on by the effects of the global economic downturn five years ago.

This, however, has not stopped Rwanda from generating income and, despite challenges, was able to increase exports to $489 million which is a 27.2 percent increase by the end of November 2013 compared to 2012.

In his State of the Nation 2013 speech, President Paul Kagame highlighted that security and stability, had enabled the country to grow at 6.6 percent.

“Rwandans are able to work freely throughout the country, because of the prevailing security and again people who visit the country, that is the investors, tourists, among others, are safe when they come here which promotes business in the country,” President Kagame said.











About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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