New pacts to boost exports

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Coffee is one of Rwanda’s major exports

Coffee is one of Rwanda’s major exports

With the new agreements  signed , there is optimism  that the  country’s  trade deficit  that has been  widened  further  14.9 percent  in the   second  half of the year  is  likely  to be  lessened  with   a  boost to exports.

The agreements are between government andthe investors-Africa Smart Investments, Pan African Logistics Limited (PAL) and Kwetu Film Institutions and the government will boost the service sector exports.

According to   the agreements, investors will provide investment and trucks to facilitate the service export to the outside markets, while the government   will commit logistical support, infrastructure andother necessary facilitation.

“We expect these agreements to scale up our exports to balance our trade receipts,” Francois Kanimba, Minister of Trade and Industry said during the   signing ceremony on Tuesday.

According to the understanding, Pan African Logistics Limited will obligate a $10 million investment capital and 150 trucks while Africa Smart Investments will also commit about $15 million, something that will ease   transportation of the country’s exports.

“Transport costs are challenges to land locked countries like Rwanda. Addressing this challenge will mean   increasing the country’s competitiveness,” said Jain Sugu, Director of Pan African Logistics Limited

With  now  cargo trucks    transiting business  between Kigali and the sea ports  at  no cost, experts  say that  Non Tariffs  Barriers-NTBs such as unnecessary delays and  other  additional costs that  bring the  transport   contributing  over 40 percent of the  actual  price of the product.

Kanimba says that the agreements will also be part of several   other pacts signed to scale up  exports mainly in  mining  and  manufacturing    sector, while  more  other agreements   will be signed for horticulture sector.

The government stepped up efforts    to boost the export sector with the implementation of the export promotion strategy as well as the export guarantee scheme that will help exporting SMEs access credit.

“Access to Finance has been a challenge for exporting SMEs especially when meeting deadlines and volumes for their clients,” he said adding that such a scheme will help   address the challenge.

The service sector exports are main contributor to the country’s total exports as well as contributing bigger proportion to   GDP that accounts for 48 percent, something the government now is banking on to leapfrog the economy to knowledge based.

 

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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.

More posts by | Visit the site of Ndaka

 

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