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Trade &Industry

E-newsletter

An insight into Rwanda’s Trade and Industry Vol. 2 Issue 16 MARCH 2019

Minister Soraya Urged Local Business Community to Boost

Cross Border Trade

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2

Inside this issue

Minister Soraya Urged Local

Business Community to Boost

Cross Border Trade

Minister of Trade and Industry

meets Turkish Ambassador

Rwanda Set to Get First

Smartphone Factory

CFTA Agreement edges closer to

realization

Reducing Rwanda’s Trade

Deficit Remains a National

Priority

EAC Reaffirms Plan to

Develop East Africa’s Textile

and Leather Sectors

China’s growth will create

more opportunities for Africa–

envoy

EAC Exhibitions empowering

Jua Kali sector

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Minister Soraya Urged Local Business Community to Boost Cross Border Trade

Minister of Trade and Industry, Soraya Hakuziyaremye visiting Rubavu Cross Border Market.

Minister of Trade and Industry,

Soraya Hakuziyaremye and her

delegation conducted a wide

ranging field visit last week to

Rubavu District Cross-border Market

to assess the progress. As

construction works are completed,

the market will have warehouses,

Bank branches, shops, open market,

parking for trucks, restaurants and

other facilities.

The project is part of a wider

program to boost cross-border trade

as a way of stimulating economic

development. It will reduce the

trade deficit where imports are still

higher than exports.

During this field visit, Minister of Trade

and Industry Soraya Hakuziyaremye

urged relevant institutions to

combine efforts to increase local

productivity for cross-border trade to

blossom, which will lead to increased

exports to neighboring countries

which will significantly reduce

existing trade deficit.

Ministry of Trade and Industry has

learnt a lot from different

perspectives on informal cross-

border trade and what needs to be

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improved to harness its

development potential, including

through the work being done for the

empowerment of women cross-

border traders. Ensuring direct

support to them and improving the

conditions in which they conduct

their cross-border trade activities are

vital, as are promoting access to

finance and loans security and

supporting the creation of more

cross-border trade cooperatives to

ease the process of developing

capacity.

Future efforts should be invested in

ensuring cooperatives meet the

required basic product standards for

national and regional markets.

Advocacy for the simplification of

product standards and licenses

should also be pursued. Continued

advocacy for cooperative members

to access finance is also important,

together with capacity building in

developing business plans and

negotiating with financial institutions

to increase loan repayment periods

and reduce interest rates.

Synergy and effective collaboration

by stakeholders in all their activities

and policy implementation have to

be reinforced if this segment of trade

is to be turned into a meaningful

driver for sustainable development

in the region.

How to tap into cross border

The Extraordinary Summit on the

African Continental Free Trade Area

(AfCTFA) that took place in Kigali,

Rwanda last year brought together

African leaders during which the

agreement for establishing the free

trade area was presented for

signatures.

The agreement was signed by 44 of

the 55 African Union (AU) member

states adding another 5 during the

AU summit in Mauritania in June

bringing the total number of

committed countries to 49 by the

end of July 2018. The Continental

Free Trade Area (CTFA), will unleash

Africa’s potential assembling a

population of 1.2 billion people, with

a GDP of $3.4 trillion as the world’s

largest free trade area since the

inception of the World Trade

Organization (WTO).

To leverage on the CFTA cross

border opportunities, Africa will

require strategic infrastructure; both

physical and financial. Physical

infrastructure includes transportation

networks such as rail, road and

power that underpin the economic

growth potential and financial

infrastructure comprising of

institutions that will enable effective

operations and empower Africa to

unlock and tap into the

opportunities underlined by the

agreement.

Tanzania is known as the trade

gateway for the neighboring land

locked countries through the port in

Dar es Salaam. According to the

Ministry of Trade, the port handles

60% of Rwanda’s exports and

imports. Zambia, Malawi, Uganda,

Burundi and the Eastern region of the

Democratic Republic of Congo

(DRC) all depend on the port of Dar

es Salaam. Tanzania has

commenced review of its policies to

spur cross border trade in

anticipation of the CFTA. In a

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statement issued by the State House

of Tanzania, President Kagame

congratulated President Magufuli for

the notable improvements that

include a reduction in transit time

between Dar to Kigali from 10 days

to between 3-6 days and the

reduced road toll charges from $500

to $152 per truck between Rwanda

and Tanzania to ease cross border

transit. Development and

harmonization of key infrastructure

will catalyse cross border trade and

enable Africa’s economic growth.

Last year, President Paul Kagame

and President John Pombe Magufuli

inaugurated the construction of the

400-kilometre Standard Gauge

Railway (SGR) from Isaka to Kigali

connecting Rwanda to Dar es

Salaam. The railway will enhance

trade activity between the two

countries improving the Cairo to

Cape Town infrastructure that will

support the aspirations of the CFTA.

At the Extraordinary Summit of the

(AU) in March 2018, former Nigerian

President, Olusegun Obasanjo said

“African’s economic salvation lies in

the CFTA”. In addition to developing

the transport networks, responsive

financial solutions catered for Africa

require financial institutions with a

bespoke understanding of the

dynamic continent.

A capable financial partner with the

requisite experience across Africa, a

deep understanding of the

continent and its dynamics, with

tailored products and services is

compulsory for the facilitation of

trade in the region and Africa in

order to make progress real. Stanbic

Bank Tanzania has several financial

instruments and products such as

import & export letters of credit (LCs),

guarantees, bill financing, import &

export financing and many other

tailor-made products as per client

needs with different payment &

collections platforms such as

Business Online banking platforms to

facilitate cross border trade. With a

Pan African presence in 20 countries,

the bank’s Visa card provides a safe

and secure way to transact across

the continent. The digital economy

has simplified the way people

transact – gone are the days when

traders and business people would

carry money for purchases in other

countries. The round the clock

access to the banking online (BOL)

platform with uniformity all across

Africa and multiple African

currencies empowers individuals

and businesses to transact

seamlessly across the continent.

Growth of the SME sector underpins

Tanzania’s industrialization agenda.

For businesses to prosper in Africa’s

evolving and competitive

environment, agile technology that

can be tailored to businesses is

essential. The secure Business Online

platform can be customized to the

needs of a business whereby

company profiles on the platform

can have unlimited access to the

account performing multiple roles

such as initiating and approving

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payments and can capture

accounts in different countries. The

platform is synchronized to the

requirements of the central bank for

overseas transactions requiring

supporting documents and has the

capability of sending the documents

as an attachment further simplifying

cross border trade.

GDP growth of the regional trading

blocs, East African Community

(EAC), Common Market for Eastern

and Southern Africa (COMESA) and

Southern African Development

Community (SADC), has increased

year on year to an aggregate GDP

of $1 trillion in 2016 according to the

Hagan Lovells report and a

combined population of 625 million

people that provide the tremendous

human capital required to position

the continent as the new frontier it

truly is. According to analysts, if the

CFTA vision becomes a reality, intra

Africa trade could increase by at

least 50% over the next 5 years from

the current 15% –this should be

enough motivation for the AU

member states to act with urgency

towards its implementation

Minister of Trade and

Industry meets Turkish

Ambassador

Minister Soraya meeting Turkish Ambassador

in Rwanda

The Minister of Trade and Industry,

Soraya Hakuziyaremye met Turkish

Ambassador in Rwanda last week

(Feb 28th) to discuss prevailing

investment opportunities in the

country and current standing of

bilateral trade between the

countries.

The discussions with the Minister

revolved around the investment

climate in Rwanda and sectors

which can be invested in and

generate high returns to the

Investors. The Turkish Investors are

interested in health, textile and

Construction sectors.

In her remarks, Minister

Hakuziyaremye welcomed the

Ambassador and urged her to

mobilize Turkish Investors to start with

the textile industry and explore

opportunities of making acquisitions

especially of the existing textile

factories. She pointed out that,

Rwanda is well positioned to support

foreign investment and investors’

interests and this is manifested by the

current World Bank ranking, where

Rwanda is ranked 2nd in Africa in

terms of ease of doing business in

the country.

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Turkey's major exports include;

machinery and transport

equipment, of which road vehicles

and electrical machinery,

apparatus and appliances;

manufactured goods, of which

textile yarn, fabrics, made-up articles

iron and steel.

Rwanda Set to Get First

Smartphone Factory

A factory to produce smartphones is

expected to open in Rwanda and

enhance access to digital services,

officials have said.

Paula Ingabire, (right) the Minister for ICT

and Innovation

The plan was unveiled by the

ministry's officials while appearing

before the parliamentary Standing

Committee on Education,

Technology, Culture and Youth to

explain issues related to ICT

observed across the country.

Paula Ingabire, the Minister for ICT

and Innovation, said negotiations

with Mara Corporation, a Pan-

African technology company, to

establish the plant are ongoing and

that by April this year it could have

started activities in the country

although she did not reveal enough

details about it.

She said that smartphones were

important ICT tools since there are

some digital services that only

require smartphones such as access

to land services among others.

The minister, however, stressed that

there was need to ensure

affordability of smartphones whose

high cost prevents citizens from

benefitting from various digital

services.

"To ensure smartphones become

affordable, different strategies are

needed to ensure each household

has a smart device and digital

literacy. We hope that the plant to

locally produce smartphones will

boost access," Ingabire said.

"Once the factory starts producing

smartphones, people will be paying

in instalments over a period of 24

months. We also have to work with

telecommunication companies to

seek ways of reducing prices on

internet use, which will boost ICT

penetration and digital services".

She added that in order to further

bridge the digital divide, ICT

graduates, called "Digital

Ambassadors", have been trained

and deployed in all sectors in

partnership with DOT Rwanda in

order to train the population in

digital literacy.

The initiative provides skills based on

solving community problems and

social innovations based on

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technology mobile phones and

computer literacy.

She said that at the sector level,

there are ICT based chambers that

train citizens on digital literacy and

services provided through the

Irembo platform such as paying

Mutuelle de Santé premiums among

over 100 other digital services.

"Each chamber is equipped with

computers and internet to help

enhance digital literacy. We want

this to be extended to the cell level,"

she said.

Innocent Muhizi, the Chief Executive

Officer, Rwanda Information Society

Authority (RISA), said that every year

a certain amount is spent on scaling

up internet access in public

institutions so as to improve service

delivery.

He said, so far, over 1,000 institutions,

among them 266 cells, have been

connected to the internet. The

number is expected to increase to

2,000 institutions by June this year.

"Although 4G LTE technology covers

over 90 per cent of the population,

internet access is still low since

people need smart devices to

access it," he said.

However, Rwanda Utilities

Regulatory Authority recently

reported that internet penetration in

the country had reached 47.7 per

cent by September 2018.

EAC Reaffirms Plan to

Develop East Africa’s Textile

and Leather Sectors

The East African Community (EAC)

has reaffirmed plans to develop a

strong textiles and leather sector in

East Africa. The announcement was

made at the 20th Ordinary Summit of

the EAC Heads of State in Arusha.

This shows the determination of the

member states to offer citizens

competitive options in regional

textiles and footwear in the face of

neoliberal globalisation.

Tanzania’s government also plans to

boost its cotton exports to $150

million by 2020, up from the current

$30 million, according to the

country’s Deputy Minister of

Agriculture, Ms Mary Mwanjelwa.

Meanwhile, Rwanda has already

launched a multi-agency task force

to embark on a training programme

targeting local factories and small

and medium enterprises in leather

processing. The country’s

government wants manufacturers to

adopt cleaner production

technologies.

“Nothing should hold us back from

achieving our regional goals in trade

and other sectors of development,”

explained New EAC Summit, Chair

and Rwandan President, Paul

Kagame. He was speaking at the

Arusha International Conference

Center in Tanzania. Kagame

recently took over as Chair of the

Summit from President Yoweri

Museveni of Uganda.

The Summit received a report of its

Council of Ministers covering the

period from 23rd February 2018 to

31st January 2019 and commended

the council for the progress made in

the implementation of the

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programmes and projects of the

community. Among other things, the

Summit directed the Council to

review relevant policies and

harmonise the framework for the

importation of goods into the EAC

within three months with a view to

supporting the growth of local

industries.

Also speaking at the event, outgoing

EAC Summit Chair, Museveni stated

that business within the East African

Community will grow with a

reduction in the cost of power,

transport, labour and interest rates.

He also expressed confidence in the

EAC’s ability to drive its agenda.

Leaders at the event concluded

that if managed properly, their

ambitious policies will soon take root

and improve the livelihoods of

millions of people across East Africa.

Prior to this time, the EAC members

states had agreed on a phase-out

plan and eventual ban on the

importation of used clothes and

leather products by 2018 to support

industrialisation and job-creation in

the region. Textile industry players in

the region were challenged to start

making garments that require low-

level technology and skills. Regional

sector players and governments

were called to put in place

programmes that will help stimulate

a localised value chain.

Emphasis was laid on the region’s

cotton industry, which was said to be

facing huge challenges including

low yields, low ginning out-turn ratio

and inefficient value addition which

was affecting its competitiveness.

When the EAC resolved to prioritise

the development of a competitive

domestic textile and leather sector

to provide affordable clothes and

leather products in the region, this

was a positive step towards

determining its own development

path. However, the laissez-faire

economic liberalism has impeded

the inward-oriented structure which

hoped to offer domestic protection

and privileges.

Cotton production, processing and

trade were said to be highly

influenced by policies of major

producing countries through price

support, tariff protection, production

subsidies and stockpiling that

destabilise cotton prices. As the

result of liberalisation, policy shifted

towards export-led growth in textile

and garment which has not

developed the sector; instead,

Tanzania’s cotton leaves the country

unprocessed and second-hand

clothing, as well as cheap and illegal

imports, have flooded the country.

The development of the industry

under those trade dispensations

failed to significantly develop full

value chain production in Tanzania

from cotton through spinning,

weaving, knitting, design and

finished goods production

processes.

Kenya has the largest garment

sector amongst the EAC countries

and produces predominantly for the

US. EAC countries including Tanzania

lack a sufficient domestic garment

production base to meet domestic

needs with local or regional

production.

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Certainly, this move aimed at

developing the textile and garment

industry indicates EAC’s desire to

articulate and implement an African

approach for the best utilisation of

African resources within the region,

with a greater focus on domestic

consumption. Producing affordable

clothes and leather products in the

region for local consumption could

assist in the reduction of poverty,

stabilise employment and improve

the social wellbeing and the dignity

of East African communities. It could

also acknowledge and include

informal sector traders in regional

value chain developments.

CFTA Agreement edges

closer to realisation

The countdown to establishing one

of the world’s largest free trade

zones is now closer than ever.

If seven more nations out of the

required 22 ratify the African

Continental Free Trade Area

(AfCFTA), it will make true the dream

of not only launching a single market

for goods and services in Africa but

also instituting the largest free trade

agreement since the creation of the

World Trade Organization 70 years

ago.

The agreement, a flagship project of

Agenda 2063 of the African Union, is

meant to liberalize intra-African

trade, generate jobs, do away with

tariffs, and harmonize the work of

already-existing regional economic

communities.

Once it comes into effect, the deal

will cover a market of 1.2 billion

people in 55 nations with a

combined gross domestic product

of $2.5 trillion. The AU says the

agreement will reduce export tariffs

which currently average 6.1 per

cent, and boost intra-African trade

by more than 52 per cent after

import duties are eliminated. The

pact is focused on diversifying trade

exports away from just extractives

and enhancing the chances of small

and medium enterprises to tap into

more regional destinations.

By opening up borders, there’s also

the chance of increasing

employment opportunities for

Africa’s bulging youth population,

especially women who already

account for 70 per cent of small-

scale, cross-border trade. The United

Nations Economic Commission for

Africa has called for smaller and less

industrialized nations as well as larger

ones to embrace the deal since it will

improve trade facilitation and

customs cooperation.

With this agreement, African

countries could be seen to be

moving in a different direction to the

United States under Donald Trump or

Britain after Brexit next year, where

bilateral trade seems to be their

preferred future.

The move to deepen economic

integration also comes as other

regions globally undertake measures

to improve competitiveness and

step toward closer trade and

investment linkages. In March, for

instance, 11 Asia-Pacific nations

signed the Comprehensive and

Progressive Agreement for Trans-

Pacific

Partnership, a successor to the Trans-

Pacific Partnership. And even in the

face of populist sentiments in the

European Union, the region has

proposed creating a unified finance

minister and a common market to

manage debt.

Page | 11

But for all its benefits, the agreement

kicked off to a shaky start with

nations including Nigeria refusing to

sign it—let alone ratify it. As of Dec.

25, 49 countries have signed the

agreement, with Togo becoming

the 15th nation to fully sanction it. To

attain the requisite votes,

negotiations are underway to

discuss specific provisions on

investment, competition, and

intellectual property rights, besides

enacting policies around e-

commerce.

Given the enormity of the structural

changes, the European Union said it

will allocate €50 million ($57 million)

to develop national implementation

strategies. Public-private enterprises

and figures including Africa’s richest

man Aliko Dangote have also

committed money to canvas

support for the deal.

The AU’s head for trade and industry

Albert Muchanga has said he is

confident the remaining votes

required to enforce AfCFTA will be

secured before the next AU summit

in Feb. 2019.

China’s growth will create

more opportunities for Africa–

envoy

Chinese ambassador to Rwanda, Rao

Hongwei, has said that the Asian

country’s development will create

more opportunities for Rwanda and

Africa in general.

The envoy was speaking on Saturday

at a reception organised to mark the

Chinese New Year at the Chinese

embassy in Kigali.

On the Chinese calendar, the New

Year falls on February 5, but the

Chinese in Rwanda have marked it

much earlier.

Speaking to the people that turned up

for the event, Amb. Rao presented

some of China’s achievements over

the past decades among which it

realised an average annual GDP

growth rate of 9.5 per cent, became

the second largest economy, and

makes up to 30 per cent of the global

economic growth.

“China’s development will create

more opportunities for Rwanda and

Africa, while Rwanda and Africa’s

growth will add new driving forces to

China,” he said.

Reflecting on President Xi Jinping’s visit

to Rwanda last year, the envoy said

that the leaders of the two countries

reaffirmed the willingness to translate

“our traditional friendship and high

level political trust into concrete

benefits for the two countries.”

Rao also spoke about “the solemn

mission” to promote the peaceful

Page | 12

reunification of mainland China with

Taiwan.

“We (are of the view that) cross-strait

reunification is the trend of history and

a must for the rejuvenation of the

Chinese nation,” he said.

The Minister for Trade and Industry,

Soraya Hakuziyaremye, who

represented the Government of

Rwanda, said that trade and

investment between the two countries

has remained steady as she promised

to continue to work towards

diversifying the economy, promoting

industrialisation and Made-in-Rwanda

products with view to see an increase

of exports to China as well as a large

presence of Chinese companies in

Rwanda.

The Chinese New Year, also known as

the Spring Festival, is an important

traditional festival in China.

This year, according to the 12 animal

zodiac of the Chinese calendar, it is

the year of the pig.

How to create a financial

sector that works for Rwanda’s

SMEs

Earlier this month during the Central

Bank’s launch of the Monetary Policy

and Financial Stability Statement, the

Minister for Trade and Industry, Vincent

Munyeshaka, challenged financial

sector players to introduce innovative

products for Small and Medium

Enterprises (SME’s)

The minister is right to give us such a

challenge, and we in the financial

sector should listen well to how it was

phrased – innovate to serve the needs

of SMEs. He did not challenge us to

extend the reach of existing products

through mere financial inclusion nor to

improve the efficiency of service

delivery. He challenged us to provide

solutions that work for the SME sector.

When thinking about innovation,

established players, such as

commercial banks that dominate the

Rwanda’s financial sector, tend to

focus on improving existing products,

making incremental changes. We

have seen the Rwandan financial

sector do so recently, bringing online

banking and mobile applications to

their clients while their main corporate

product remains the same –term loans

with fixed repayment schedules

collateralized by land titles.

Incremental innovation is not

necessarily a bad place to start, but it

limits our focus to what is already

available on the market. However, as

the Minister pointed out, it should be

clear for everyone that more efficient

iterations of existing products are not

going to solve the structural

challenges surrounding SMEs’ access

to finance.

We cannot entirely blame

commercial banks and Microfinance

Institutions (MFIs) for their lack of

capacity for disruptive innovation.

Indeed, this is not an exclusively a

Rwandan phenomenon. Banking

business models in developed markets

have scarcely changed since the 19th

century, iterating only on their existing

product ranges and improving the

channels they use to reach clients with

those products.

Given their systemic importance and

potential for creating major crises,

traditional banks and other deposit-

taking institutions are (and should be)

also heavily regulated, which further

limits their ability to introduce new

services or make changes to their

business mod-el.

Having already saturated the large-

company segment of the market for

whom the existing products do work

and lacking the ability to come up

with disruptive innovation, Rwandan

banks now focus on retail markets as

their growth markets. MFIs, facing the

Page | 13

same internal innovation capacity

constraints, deploy a similar strategy,

focusing on microenterprises (with 1-3

employees), whose financial needs

are similar to those of retail customers.

SMEs in the meantime struggle with ill-

suited risk assessment technologies

copy/pasted from developed

countries and high transaction costs

and time requirements – or they use

the ubiquitous moneylenders (the

Banque Lamberts), who for all their

flaws, at least understand what is

important for their SMEs clients –

speed, low transaction costs and

flexibility.

Where financial innovation comes

from?

So if not the incumbents, where can

financial innovation for SMEs come

from? It comes from start-ups, the non-

bank financial institutions (NBFIs) and

the fintechs. These are businesses who

do not operate within the limitations of

the fractional reserve banking model

(attract deposits to on-lend at a higher

rate), but can focus freely on the

needs of the customers, asking “What

is your pain point and your goals? As a

business owner, what are your biggest

constraints?”

The financial solution is then designed

according to the stated goal:

expanding business operations,

paying bills and taxes on time, transfer

money quickly and reliably, portray an

image of reliability to new clients and

suppliers and cover the cost of

rebuilding in case of a fire, etc. The

customer is at the centre of financial

innovation, not the activity nor

business model of the financial

institution. Indeed, the main pain point

might not be financial in nature at all,

although in Rwanda access to

appropriate and affordable financial

services is the main constraint.

Financial innovation is different from

other types of innovation in that the

main concern is how to control risks.

When you’re in the business of offering

money, it is after all not hard to find

willing clients. The challenge is rather

how to ensure full recovery with a

percentage fee on top.

Therefore, the additional question a

financial innovator needs to ask is

“Now that I know what our clients

struggle with, and have an idea for

how to solve it, how do I identify which

clients I can trust with my money?

What can I do if I am wrong or the

initial business plan does not work out?

As a result, financial innovation tends

to manifest itself in new ways to screen

applicants, new mechanisms that

encourage repayments or new ways

of automating collections. The

innovation that gave rise to

microfinance is a classic example.

The Minister’s challenge is to come up

with a similar solution for SMEs tailored

to their current characteristics. The

challenge is not to change the SMEs to

fit existing products, but for the

financial sector to change to fit the

SMEs.

Implications for Rwanda’s financial

institutions

Given the more sophisticated needs

of SMEs compared to micro-

enterprises, and their fewer internal

resources compared to large

corporations, the challenge is indeed

complex. An SME client with a goal

such as “expand my business” may

need the following:

1. Investment capital for buying

assets, e.g. term loans or equity

investments;

2. Working capital for covering the

increased operational costs, e.g.

overdrafts, supply chain finance,

supplier credit or buyer advances;

3. Insurance cover to protect from

accidental damage or loss;

Page | 14

4. Payment solutions that are widely

accepted within the business

community, are se-cure and have low

transaction costs;

5. Savings products for future

investments.

It is clear that no one institution can

provide all these services alone.

Financial service providers specialise

due to efficiency gains, as well as

regulatory constraints imposed for sys-

tem stability. However, the SME client

cannot be expected to have the

managerial band-width or time to

research the regulatory nuances or

different requirements, when they just

need financial services for their

operations. Indeed, they should not

have to concern them-selves with how

our plumbing works. From the

perspective of the client, any time

spent obtaining financial services is

time wasted, since it is not spent on

running operations.

SMEs tend to go to a commercial bank

as their first port of call for financial

services due to the trust that they have

in such institutions. However, as the

Minister pointed out, their needs are

not met by the current offerings of

banks which is the cause of much of

the observed frustration.

The banks should therefore leverage

other financial players to provide a

holistic suite of services, tailored to the

needs of the clients and fully

integrated to minimize transaction

costs. The benefits of such

collaboration should be clear. NBFIs

and fintechs can take risks and

structure new business models that the

fractional reserve banking model does

not allow for, while leveraging

technologies that legacy core

banking systems cannot easily deploy.

Banks, on the other hand, bring the

clients’ trust and data as well as

financial muscle and as a result share

in the revenue streams that NBFIs and

fintechs open up for them. From the

client perspective, however, the

service delivery is holistic and

minimises time away from their core

operations.

Indeed, banks in developed markets

now compete on the basis of the

integrated end-to-end solutions they

can offer together with their partners,

rather than on how efficiently they

can deliver their core in-house

products. This is an encouraging trend

for innovation and one we hope to

see more of in Rwanda.

We can understand the Minister’s

challenge as a challenge to

collaborate for innovation and thus

better service the needs of our

brothers and sisters working hard to run

SMEs and create jobs for Rwandans up

and down the country.

Understanding Rwanda,

China bilateral agreements

Rwanda is also in the process of setting

up strategic partnership with China to

promote the human resources

development across different sectors.

Rwanda and China signed 15 bilateral

memorandum of understanding

(MoUs) and agreements during

China’s President Xi Jinping’s state visit

to Rwanda.

The signing ceremony was one of the

major highlights of Xi’s two-day visit.

Here is what some of these

agreements mean to Rwanda:

Bugesera International Airport road

project.

Page | 15

Trade infrastructure is one of Key Pillars in

Rwanda –China Bilateral Agreements.

The Rwandan government signed a

loan agreement to expand the road

leading to Bugesera International

Airport, which is scheduled for

completion by the end of 2019.

Government is borrowing $50 million

from Exim Bank of China to finance the

construction of the 13.8 km

expressway. While government

officials did not reveal the detail of the

loan agreement, such as interest rates

and payment terms, Exim banks

normally charge 1.5 to 2.5 per cent,

according to Caleb Rwamuganza,

the Permanent Secretary in the

Ministry of Finance and Economic

Planning. “We signed MoUs with Exim

Bank of China but we haven’t got into

all details,” he said.

According to officials at the Rwanda

Transport Development Agency

(RTDA), the expansion of the road,

Sonatube-Gahanga-Akagera Bridge

Road, is expected to start within the

next six months and the execution

period is estimated at around 24

months.

With Rwanda set to host the next

Commonwealth Heads of

Government Meeting (CHOGM) in

2020, there is a push for early

completion of construction activities

at Bugesera International Airport to

accommodate the highly-anticipated

traffic.

RTDA’s Imena Munyampenda told this

paper that they want the road to be

completed before the airport

construction activities. Infrastructural

projects tend to be capital intensive,

making it hard for a country to foot the

entire cost upfront.

While some experts have cautioned

against increased borrowing,

Rwamuganza said that Rwanda

borrows within its capacity,

highlighting that all the country’s

debts are manageable.

E-commerce

On behalf of the Rwandan

government, the Minister for Trade

and Industry, Vincent Munyeshyaka,

signed a Memorandum of

Understanding on e-commerce

cooperation.

This agreement comes a year after

Jack Ma, founder of China’s e-

commerce giant, Alibaba Group,

visited Rwanda, whereby he made

investment commitments for African

start-ups in e-commerce and other

tech businesses.

The Trade Minister said this agreement

will promote digital trading even as he

did not specify what areas of e-

commerce they will collaborate.

Yet, experts believe this particular

agreement is a step in the right

direction for the development and

promotion of Rwanda’s nascent e-

commerce industry.

According to Norbert Haguma, an

Investment Advisor for Chinese looking

to invest in Africa, China got it right

with e-commerce infrastructure,

which Rwanda can seek to replicate.

“The infrastructure of e-commerce is

really needed in order to develop the

industry in Rwanda. If you want to buy

honey from the Southern Province, or

fruits from the Northern Province, it

Page | 16

should be possible to do that via e-

commerce platforms,” he said.

Haguma also argued that e-

commerce is more about technology,

which China has mastered for the past

few years, and that Rwanda can really

benefit from sharing and learning best

practices.

“E-commerce implies big data, cloud

computing because you cannot ask

for every manufacturer to build their

own website as nobody will easily find

them. That’s why on Alibaba, Taobao,

and Tmall you can easily set up shop

and sell, making e-commerce a tool

to do business,” he noted.

He highlighted that Rwanda can also

learn from how China has financed

the e-commerce industry.

Rwanda’s e-commerce industry is

slowly growing and the industry has

started attracting foreign investors like

DMM Group owned by Japanese

investors.

The group is currently making a strong

push within the e-commerce field in

the country. They have built the first e-

commerce directory, Hehe (hehe.rw).

There are other players like Jumia.

Investment in human resources

development

The country is also in the process of

setting up strategic partnership with

China to promote the human

resources development across

different sectors. This will enable the

country make progress in developing

a critical mass of trained human

resources.

It is widely believed that investments in

people’s capabilities through a focus

on education, nutrition and health as

well as productive skills enhancement

can increase access to decent work

and provide opportunities for

sustained progress.

It is not yet clear what areas of

collaboration the two countries will

take, but China’s human resources

industry is diverse.

By the end of 2020, China expects

revenue from the human resource

industry to reach 2 trillion yuan (about

$303.7 billion), according to statistics

by the Chinese government.

Haguma, who is also the Secretary of

Rwanda-China Alumni Organisation,

said that there is currently an increase

in the number of Rwandans going to

study in China in a number of fields

including vocational training.

“But what is lacking is the pursuit of

more technology acquisition, and this

is something we want to do as an

organisation as part of our

contribution,” he said.

EAC Exhibitions empowering

Jua Kali sector

The EAC has been undertaking SMEs

Development through the East Africa

Jua Kali/ Nguvu Kazi exhibition. The

exhibition is an annual event that

exposes the products manufactured

in the region. Organized jointly on a

rotational basis by the EAC

Secretariat, the East African

Confederation of Informal Sector

Organisation (EACISO) in

collaboration with EAC Partner States,

the event brings together artisans from

the six (6) EAC Partner States

comprising Burundi, Kenya, Rwanda,

South Sudan, Tanzania and Uganda.

Last year’s exhibition was hosted in

Bujumbura, Burundi and attracted 830

Page | 17

artisans from five Partner States –

Uganda, Kenya, Tanzania, South

Sudan and the host country Burundi –

ended with a call by the government

of Burundi government to the other

EAC Partner States to strongly support

the private and informal sector in the

bloc.

Speaking during the event’s closing

ceremony last year, Burundi’s Assistant

Minister of Trade, Industry and Tourism,

Mr. Nkunzumwami Aimable, said there

was need to deliberately support the

growth of Jua Kali (informal sector) by

giving the necessary and enabling

policies that are conducive to

enhance opportunities and returns on

investment in the informal sector.

Mr. Aimable, who was representing

the Minister of Trade, Industry and

Tourism, challenged the artisans not to

wait for another Jua Kali exhibition

opportunity in Burundi but to use this

opportunity to network and open up

stalls in Bujumbura and other parts of

the country so that their products can

be easily accessed in the country.

“Don’t just sit and wait for the annual

exhibitions, venture out and explore

opportunities available in all the

Partner States”, the governments are

ready to support you,” said the

Minister to the participants.

This year’s annual exhibition brings

together artisans from the East African

region for purposes of opening up new

market frontiers for their products while

bridging the knowledge and

technological gaps between them.

According to the Director General

Customs and Trade at the EAC

Secretariat, Mr. Kenneth

Bagamuhunda, the theme portrays

the role MSEs are expected to play in

the growth and development of the

region’s economies. Mr.

Bagamuhunda disclosed that so far

1,100 artisans have registered and

confirmed their participation at the

event.

The 19th EAC Jua Kali/Nguvu Exhibition

will be officially opened on 4th

December, 2018.

To participate in the Exhibition,

exhibitors from Partner States

(Tanzania, Burundi, Rwanda, Uganda

and South Sudan) are required to

register with their respective

Confederation of Informal Sector

Organizations and Ministries of Trade

and Industry, while those in Kenya

should register with the Small and

Medium Enterprises Authority.

The exhibitions have proved to be

strategic avenues for promoting the

Small and Micro Enterprises sector’s

products, transfer of technologies,

and promotion of the regional

integration process.

Rwanda to launch Made-in-

Rwanda Heineken beer

Rwanda Stock Exchange (RSE) listed

company Brasseries et Limonaderies

du Rwanda (Bralirwa) is set to launch

its local operation of brewing

Heineken beer, a product the country

was importing from the parent

organization in the Netherlands.

Last year, Rwanda’s ambassador to

The Netherlands Jean Pierre

Karabaranga revealed on social

media that Rwanda would start

producing the Heineken beer,

catalyzed by the attractive business

climate and the prominence of the

drink in the Rwandan market. Rwanda

will as well export the beer in the

Page | 18

region with Burundi and DR Congo

being the target market.

Commenting on the move by the

company which owns 75 percent

shares of the Rwandan firm, Victor

Madiela, the Managing Director of

Bralirwa said, “We believe that this

innovation will create additional

business opportunities for Bralirwa Plc

and for our business partners in

Rwanda as well as through export to

neighboring countries. Additionally,

this is another contribution by Bralirwa

plc to the Made-in-Rwanda

programme. By switching from

importing to local production, Bralirwa

Plc will contribute to the development

of the local economy.”

Bralirwa brews the country’s flagship

beer Primus, alongside other

beverages including Mutzig, Turbo,

Amstel, and Legend.

Heineken extended its 23-year

sponsorship deal of the Union of

European Football Association (UEFA)

Champions League and Europa

League by three years for an

undisclosed fee. The Dutch company

continues to be a crucial partner in the

annual soccer tournament viewed by

millions around the globe, harvesting a

significant amount of revenue from

the sporting activity and source of

entertainment.

The African beer market continues to

grow, and with the potential of

untapped business opportunities still,

high companies continue to jostle for

space in the market. Authorities

continue to advocate for foreign

investments to drive economic growth

and development which businesses

are taking advantage as they spread

print in the African continent

Rwanda Targets $10M Export

Revenue from Essential Oils A local perfume produced from Patchouli

Rwanda plans an upward shift on its

annual export revenues from Essential

oils to $10 million by 2021 up from

$500,000 this year, National

Agricultural Export Development

Board (NAEB) has said.

Essential oils produced in Rwanda

include; Geranium, Eucalyptus,

Pyrethrum and Patchouli oils as well as

aromatic substances extracted from

plants used mainly in flavour, perfume

and pharmaceutical industries.

Page | 19

Participants at the conference on essential oils

According to NAEB, the government

of Rwanda exports EOs in countries

including; United States of America,

France and South Africa.

Among the plan to expand essential

oils farming is establishing contracting

farming, a system that brings investors

and farmers on negotiations of

growing EOs.

Jean Marie Vianney Munyaneza, the

Head of Diversification Division at

NAEB, told KT Press; “the government

has established contracting farming

system where investors negotiate with

farmers to grow EOs with assurance of

ready market.”

The plan was revealed during a 2-day

conference held at Hill Top Hotel in the

capital Kigali on November 15 to

increase quality and quantity of EOs in

the country.

In a bid to meet revenue targets NAEB

has organized trainings and workshops

at least every 4 months conducted by

foreign experts on how to grow and

harvest Eos.

“The trainings on how to grow EOs is

underway to farmers and we are

optimistic to get the market,”

Munyaneza told the Press.

Rwanda's trade deficit on

downward trend: Central

Bank

Rwanda's trade deficit decreased by

two percent in the first half of 2018

compared to the same period last

year, the central bank announced

earlier this month.

Central bank governor John

Rwangombwa attributed the

reduction in the trade deficit to the

increase in formal export receipts,

which rose by 23.2 percent in the first

half of 2018.

"The trade deficit reduction was due

to good performance in exports in the

period. There was an increase in

export volumes such as minerals, tea,

and coffee and as well as made-in-

Page | 20

Rwanda products," said

Rwangombwa.

According to him, re-exports

increased by 22.2 percent in the first

half of 2018, while non-traditional

exports increased by 19.1 percent in

the same period.

The reduction of the trade deficit has

seen the Rwandan Franc remain

stable against the dollar with the

central bank saying that by end June

this year, the Rwandan currency

depreciated by 1.7 percent against

the United Sates dollar.

Rwangombwa said Rwanda's

economy continues to register strong

performance after registering 10.6

percent growth in the first quarter of

2018, up from 10.5 recorded in the

previous quarter.

Speaking at the monetary policy and

financial stability statement 2018

event, Vincent Munyeshyaka,

Rwandan minister of trade and

industry said that Rwanda targets to

increase its exports base by 17 per

cent annually.

"We are planning to scale up and

reform export growth fund to increase

access to finance for exporters and

building potential partnerships with

regional exporters as part of efforts to

increase Rwandan exports on the

international markets," he said.

The small central African country

targets to double the current average

annual GDP from the current 5.4

percent growth rate to more than 10

percent to be able to reach upper

middle income status by 2035,

according to ministry of finance and

economic planning.

Rwanda's economic pillars that

include tourism, manufacturing, retail

and wholesale and mining are also

projected to deliver above 10 per

cent of GDP growth under the 2035

blueprint.

According to the 2017 World Bank

report, Rwanda has the potential to

be one of Africa's great success stories

given it's a dynamic social and

economic transformation.

Central Bank Holds Key

Lending Rate At 5.5%

The National Bank of Rwanda (BNR)

has maintained the key repo rate at

5.5 per cent, the benchmark rate at

which it lends money to commercial

banks, citing a positive economic

outlook.

The Governor of BNR, John

Rwangombwa, said the decision to

maintain the same rate was guided

primarily by the expected inflation

movement and its underlying factors.

"The first half of this year we saw

[headline] inflation at 2.5 per cent on

average and eased to 2.1 per cent in

August, while core inflation was at 1.7

per cent in the last six months, it had

reduced to 1.1 per cent by August," he

said.

The Rwandan Franc depreciated by

2.5 per cent against the US dollar at

the end of August this year compared

to 1.8 per cent and 8 per cent which

was observed during the same period

of 2017 and 2016, respectively.

The Bank projects stability in the

currency markets while the inflation

rate is expected not to exceed 5 per

cent at the end of the year.

"Based on these good economic

conditions and on the need to

continue supporting the financing of

the economy, the monetary policy

committee has taken the decision to

maintain the key repo rate at 5.5 per

cent as it has been over the past eight

months," Rwangombwa noted.

The last time the central bank revised

the repo rate was in December 2017,

when the MPC reduced the rate by 5

Page | 21

basis points from 6 per cent to 5.5 per

cent.

BNR uses repo rate to regulate the

level of inflation, money supply and

liquidity in the country. This rate does

not only have an impact on the

borrowing for banks but also the

impact on the borrowing of clients

from commercial banks.

When the central bank lowered the

key repo rate in December last year,

the hope was to encourage banks to

enable businesses and industry to

borrow money for different investment

purposes.

However, recent statistics indicate

that there has been a reduction in

demand for credit. The overall loan

rejection rate was estimated at 20.4

per cent in the first half of 2018.

The central bank has been reducing

the key repo rate for the past few

years.

Transforming Rwanda’s

economy through urbanizing

and promoting Secondary

Cities

According to the 2012 population

census results, Rwanda has the highest

population density in Africa with 416

people per square km with Kigali

being the most densely populated

region with 1,556 people living per

square km, almost 4 times that of the

entire country.

Roads being developed in secondary cities.

Over the last 5 years, the

implementation of the Economic

Development and Poverty Reduction

Strategy (EDPRS) 2013/14 – 2017/18

hinged on four thematic areas,

namely; Economic Transformation,

Rural Development, Productivity and

Youth Employment, and Accountable

Governance.

Specifically, under “Economic

Transformation”, the Government of

Rwanda envisaged accelerated

economic growth and restructuring of

the economy towards more services

and industry as we move towards

middle income country status.

It is because of this great demand on

service delivery for citizens within Kigali

that challenged the government to

search for solutions on how this will be

managed with future population

growth.

This is why the Government, as laid out

in EDPRS II, looked at developing

secondary cities in order to “off-load”

the pressure on Kigali, and as a way to

manage the needs of a growing

population while still delivering quality

service to all Rwandans.

In order to avoid undesirable

imbalance and provide a better living

to all people, Rwanda focused on

transformation of the economic

geography of Rwanda by facilitating

urbanisation and promoting six

secondary cities that are serving as

poles of growth and investment::

Rubavu, Huye, Rusizi, Muhanga,

Musanze and Nyagatare.

In implementing this priority, World

Bank has financially supported the

GoR in upgrading unplanned six (6)

secondary cities mentioned above,

which were identified as pilots to be

developed as regional centres of

growth and investment.

Today, the development of these

cities is ensuring more balanced

regional growth and opportunities for

increased access to off-farm

Page | 22

employment for a larger proportion of

the population.

The Government of Rwanda has

increased attractiveness of these cities

by putting in place strategic

investments and economic projects

including investment in

interconnectivity of the road network

linking urban areas, secondary cities

and affordable housing.

Many public services that were easily

available in Kigali, such as inner-city

public transport, business registration

services, specialised healthcare

services, and multiple schooling

options, are now available in other

cities.

This has made opportunities for

investment and potential for a viable

social life which attractive people to

the capital also available outside of

the capital.

While Kigali City needs continuous

support to improve management of

service provision to an exponentially

growing population becoming a

regional hub, the Government has

simultaneously supported the

development of a network of

secondary cities.

Over the last year, these secondary

cities have gained capacity to

generate finances from local

revenues to support their

development in line with the local

development plans.

The plan to develop secondary cities

was spearheaded by the Ministry of

Infrastructure (MININFRA) and is

anchored on prioritizing a hierarchical

network of urban and urbanizing

centres, providing services and

attracting economic activities

countrywide.

So with financial support from the

World Bank, the implementation of

“Rwanda Urbanization Development

Project (RUDP)” arose from the GoR’s

target of getting the urban population

up 35% as stipulated in its Vision 2020,

and EDPRS2 to prioritize secondary

cities as poles of economic and urban

population growth that will promote

sustainable development.

According to sources[TH1] from the

Ministry of Infrastructure, in next year’s

national budget, a lot of new roads will

be constructed in all the secondary

cities and focus will be directed on

industrial zones.

This program of constructing these

roads and drainage system under the

Rwanda Urban Development Project

(RUDP) will be done in the second

phase to help in the creating more job

opportunities in these cities.

As journalists toured the six secondary

cities towards the end the first phase of

the project, sources from the Ministry

of Infrastructure revealed that 29

kilometers of tarmac roads have been

already constructed under the

funding of the World Bank worth 28

million Us dollars which is equivalent to

25 billion Rwandan francs.

According to Eng. Uwihanganye Jean

de Dieu, Minister of State in Charge of

Transport, the second phase will see

over 40 kilometers of tarmac roads

constructed in industrial areas.

“Without basing on agriculture, over

80 million francs will be invested in

infrastructure projects aimed at

developing these six secondary and

over 44,000 new jobs will be created

by the end of the project” said

Uwihanganye.

In order to change and give it a new

look to the city, construction of 3

kilometers and 894 meters of roads

and drainage system of 1kilometer

and 175 meters have been

completed in Rubavu funded by the

World Bank through Local

Page | 23

Administrative Development Authority

(LODA).

Rubavu has great potential for

domestic tourism. Unlike other lake

side towns, it is livelier and on average

45,000 tourists pass through Petite

Barrière on a daily basis and over

80,000 cross through Grande Barrière

on a daily basis.

Along the trail, a modern state of the

art market has been built worth 2

billion francs that will be used by

traders crossing the border.

The Branch Manager of Davis &Shirtliff

in Rubavu, Niyonsaba Thacien, said

that they have decided to open up

branches where the new

infrastructures like roads and

electricity have mushroomed and the

company has invested over 100 million

francs since 2016.

“We found out that we have markets

in Goma, Rusizi and Bukavu because

of the economic activities on the lake

and because of the frequent power

cuts in Goma, we sell many engines

and it no longer requires one to go to

Kigali for such equipment” said

Niyonsaba.

The mayor of Rubavu, Habyarimana

Gilbert says that they want Rubavu to

be the center of tourism attraction.

“After the new infrastructure, many

new commercial buildings have

sprung up following the district master

plan and many companies want to set

factories in Rubavu. Also through RDB,

plans are under way to construct a

five star hotel and to construct a port

that will enhance cargo business” he

added.

Investors that have started businesses

in Rubavu and other secondary cities

are saying that the business is has

improved after the construction of

these tarmac roads and that many

other will come to these cities in future.

Nikuze Anne Marie, who represents

the Private Sector Federation at

Nyagatare District thanked the

Rwandan Government for the plan to

develop secondary cities and said

that the district is developing at a first

rate.

“Considering the speed at which the

new infrastructures are rapidly

increasing, it is a sign that the future is

ours and we as PSF are ready to use

these facilities to bring economic

development to our District” said

Nikuze

“There is going to be a change in the

trend of people leaving villages to

seek work in Kigali. These cities have

the necessary infrastructure and

people should come from Kigali and

come to invest here because there is

less competition” said Kamali John

who runs a retail shop in Rusizi.

David Muvunyi a trader in Muhanga

says that the town already has the

needed new roads and lal that is left is

to construct new builds and proper

infrastructure.

“We have the good roads now and all

that is remaining is removing the old

fake buildings and also reducing the

congestion in the town center. After

that, we should have no reason to

think of Kigali as the only option when

it comes to doing business” said

Muvunyi

The assistant for economic

development at Nyarugenge District

Nsabimana Vedaste says the Agatare

project’s purpose is to rehabilitate

residences in the area.

“The 10$ million project plan is to

construct 5and half kilometers of

tarmac roads and 2 and half

kilometers of pedestrian walk ways

plus infrastructures like street lights and

water trenches for better drainage

system” says Nsabimana

Page | 24

He added that after these

infrastructures are put in place,

Agatare residents will benefit a lot

from the project.

“We want to avoid dirty places and

after these roads are constructed,

residents will have access to a clean

environment with less congestion and

better security because of the street

lights” he added

In Huye, residents said the

transformation of the town is changing

and they are sure that if they demolish

the old building and build new sky

scrapers, development is coming their

way.

The new mayor of Huye Ange

Sebutega said that putting in place

new roads is the first step of

development and the rest will follow.

“It is good that we are having the new

roads constructed in the city and this is

the most important step. The

construction of new buildings and

other infrastructure will definitely be

achieved” said Sebutege.

She added that the district is in talks

with land lord of commercial buildings

to see how they can rehabilitate them

in a short time.

Musanze has become one of

Rwanda’s most vibrant cities. This

tourism city is abuzz with business

activity. Arguably Rwanda’s second

largest city, Musanze operates twenty-

four hours a day with people trying to

make the most of its strategic location.

With these new roads and

infrastructures in Musanze, there is

going to be a lot of development says

John Hills a tourist visiting Virunga for

the second time.

“The town is looking much better and

cleaner with the new roads and the

street lights make all more lively” said

Hills

The area is home to most of the last

mountain gorillas on earth. The city is

teeming with tourists, both local and

international, as well as people en

route to or from neighboring countries.

Made-in-Rwanda Products

Available Online

A Rwandan entrepreneur has

introduced a platform that will enable

clients to purchase locally made

products online. The online portal -

‘Made in Rwanda Online (MIRO)’ will

also ensure delivery of goods once

purchased according to developer

by Alain Pacifique Nkazamurego.

Nkazamurego said that the app brings

Rwandan products to more

consumers across the world and open

more opportunities for Rwandans

producers and also saves time for

both sellers and buyers.

“Anyone can use the application at

any time and be assured that the

product will be delivered,

Nkazamurego said, even people living

abroad can easily access it since

payments are done online”.

Made in Rwanda Online operates with

different shipping companies for

delivery to clients living outside

Rwanda.

For the last four months since the

establishment of the platform, 50

companies have joined and they

have been easily connected to the

market.

“It takes zero free to join the platform

however you are charged service free

on every purchased product,”

Nkazamurego said.

‘Made in Rwanda Online’ is among

the technologies that are being

showcased at the Made in Rwanda

Page | 25

Expo that is happening for its 2nd

edition.

Uwamariya Assumpta, a seller on the

platform told the media that since she

joined, her products have been

known and she is able to connect with

other sellers in different countries.

“I live in Rubavu where I make and sell

wines, since I joined the Made in

Rwanda Online platform I have

received many calls from people

abroad asking me send more wines to

them,” she said adding that “My

products are now known than ever

before and the number of my clients is

growing too.

Uwamariya urged fellow Rwandans in

diaspora to continue to buying

products made from their country.

“Our products meet both quality and

quantity standards,” she said.

New e-Market Place for Made-in-Rwanda Products.

There are various products sold on

‘Made in Rwanda Online’

(http://www.madeinrwanda.online/ )

among them are beauty products,

books, drinks, beverages, fashion

products, handcraft products among

others.

Today, Nkazamurego, 27, has 11

permanent employees who work with

him on a daily basis. Before this year

ends, he plans to launch a mobile

application that will be more

accessible for people to purchase

‘Made in Rwanda’ products.

In 2014, the government of Rwanda

launched the Made in Rwanda

campaign to boost consumption of

locally made products; enhance

quality standards, branding and

packaging along the value chain.

How the application works

Carlène Segonde Umutoni, web

content manager at Made-in-

Rwanda Online, said that they

welcome all products including

beverages, fashion, handcrafts,

health, and home decoration.

There is also wholesale category

whereby a customer can order

products in large quantities and get

discounts. The payment system

includes mobile money, Visa or

Master card debit and credit cards.

Habineza said that people in East

African countries can pay using their

local mobile money companies.

According to Umutoni, customers visit

the website,

www.madeinrwanda.online then

choose a product they want to buy.

They will provide their details and

shipping address after which they will

be directed to a link to execute their

payment.

If the customer uses mobile money as

the payment system, they will have to

add their mobile money phone

number. The customer will get

notification telling them that they

were purchasing something from the

marketplace. The marketplace works

with DHL and Rwanda Post Office for

shipping abroad.

For local delivery, the marketplace

has been doing it internally, but

Habineza disclosed that they are

negotiating with local transport

agencies to help with distribution.

Page | 26

Delivery within Kigali is charged at

Rwf1000 and for upcountry the cost

can go up to Rwf 2,500 for districts like

Rusizi District.

CFTA to benefit entire

continent

AfCFTA is a framework between

African Union member states, aimed

at creating a single market with

seamless cross-border trade and at

increasing intra-Africa trade.

The Economic Commission for Africa

has said that the entire continent

stands to gain much more from

AfCFTA than it benefits from other

trading arrangements with regions

outside the continent.

A processing plant in Kigali

The statements were made during a

policy dialogue to discuss the African

Continental Free Trade Area (AfCFTA)

and assess the country’s readiness to

tap into the agreement’s potential.

The Economic Policy Research

Network (EPRN) of Rwanda in

partnership with UN Economic

Commission for Africa (ECA) and

Rwanda Ministry of Trade and Industry

were part of the stakeholders at the

dialogue.

Andrew Mold, Officer-in-Charge of

ECA in Eastern Africa said that Africa

stands to gain much more from

AfCFTA than it benefits from other

trading arrangements with regions

outside the continent.

He noted that the ECA has estimated

that if fully implemented, the AfCFTA

could double the amount of intra-

African trade.

Mr Mold explained that despite

having been granted preferential

market access to high-income

markets for many decades now most

countries on the continent are still

import-dependent and export

excessive amounts of unprocessed

commodities, and, as a

consequence, run up large trade

deficits.

“Large trade deficits slow down the

pace of economic growth and

development”, he said. “We clearly

need a new approach to tackle these

problems – the implementation of the

AfCFTA is that approach,” Mold said.

“We are talking about 1.2 billion

people with a combined GDP of $2.2

trillion, so it’s a huge market”, said

Michel Sebera, Permanent Secretary

in Rwanda’s Ministry of Trade and

Industry.

Sebera added that in order to tap into

AfCFTA, Rwanda has first to enhance

its industrial development, add value

to its primary commodities and boost

its service sector.

Experts at the meeting were pleased

that Rwanda was among the first

countries to ratify the agreement,

which means that the country has

undertaken all required legislative

measures in readiness to implement

the agreement.

The continental-wide agreement will

enter into force after 22 ratifications.

“The African Continental Free Trade

Area (AfCFTA) is a framework

between African Union member

states, aimed at creating a single

market with seamless cross-border

trade and at increasing intra-Africa

Page | 27

trade” said Charles Ruhara, Legal

Representative of EPRN-Rwanda

BRICS unity against

protectionism motivates East

Africa

Leaders of Brazil, Russia, India, China

and South Africa met in

Johannesburg, South Africa to

deliberate on their role as emerging

economies in the world in what is

referred by their acronym BRICS.

BRICS leaders together with selected

African leaders

One of the major points of discussion

and agreement was sending a strong

voice against protectionism, a new

global trend spearheaded by US

President Donald Trump.

The leaders present included China’s

President Xi Jinping, Russian President

Vladimir Putin, India’s Prime Minister

Narendra Mondi, Brazilian President

Michel Temer, and South Africa

President Cyril Ramaphosa.

BRICS countries accounted for more

than 25 per cent of the world’s GDP in

2017 – a figure that is to grow to nearly

27 per cent in the next few years, the

IMF predicts. Equally, these countries

account for 40 per cent of the world’s

population and more than 25 per cent

of the party’s landmass.

When lauding the effort of the BRICS

to protect free trade, South Africa

President Cyril Ramaphosa noted the

benefits of such movement will be felt

by countries out of the BRICS club. This

was discussed in a side BRICS-Africa

outreach meeting attended by

leaders from East Africa and was

addressed by among others Indian

Prime Minister Narendra Mondi.

President Ramaphosa said the BRICS

grouping took a fairly firm stance

against protectionism and “felt the

need to do everything to protect the

multilateral system which is now under

attack.” “We confirmed our

commitment to the World Trade

Organisation, as the most effective

mechanism available to ensure that a

rules based transparent, non-

discriminatory, open and inclusive

multilateral trading system,” said

President Ramaphosa.

African Union (AU) Chair and

Rwandan President Paul Kagame,

Togo President and Chair of the

Economic Community of West Africa

States (ECOWAS) Faure Gnassingbe,

Angolan President Joao Lourenco,

Ugandan President and Chair of the

East African Community, Yoweri

Museveni and Namibia as incoming

chair of the Southern African

Development Community (SADC)

participated in the BRICS-Africa

outreach session.

Rwanda President Paul Kagame

observed that Africa and BRICS

shared common interests. ” First, we

have a common interest in an open

and fair international system. Second,

strengthening cooperation with BRICS

contributes to medium and long-term

human security and wider benefits,

especially employment, for Africa’s

young population,” observed

Kagame.

He said AU would want to collaborate

with BRICS on key sectors, including

industrialization, infrastructure, as well

as peace and security, which are at

the heart of the African Union’s

Agenda 2063.

Page | 28

Uganda President and current chair of

East Africa community presented a

strong case for the region. “The East

African Community (EAC) is

comprised of: Kenya, Tanzania,

Rwanda, Burundi, South Sudan and

Uganda. Our population is now 168

million people and our combined

GDP (PPP) is now US$ 440 billion. By

2050, the population of East Africa will

be 878,236,244 people.”

He said BRICS Countries could easily

find investment opportunities in East

Africa in value addition to cereals,

fruits, milk products, fish products,

forest products, beverages, minerals

such as iron ore, copper, nickel,

tungsten, cobalt, and coltan . These

minerals produce steel and copper

those are needed in all basic industries

and are also alloys for metal products

for specialized purposes such as heat

resistance.

“The advantages of 1.3 billion Chinese

in a land area of 3 million Square miles,

1.25 billion Indians in a land area of 1

million square miles, 150 million

Russians in a land of 5.3 million square

miles of land and 200 million Brazilians

in a land area of 3.29 million square

miles are not lost and have never

been lost on the Pan Africanists in

Africa. Therefore, our partners in BRICS

should be aware of the sustained

integration efforts in Africa that will, in

the end, rationalize the interactions

between us and the BRICS powers,”

noted President Museveni.

E-Trade measures to help

COMESA gain US$17.5B

Trade researchers have pointed out

those African countries having been

losing huge sums of money due to

their failure to embrace paperless

trade systems

An ongoing COMESA annual research

forum in Nairobi has been informed

that the trade block stands to gain

monumental growth and saving if only

it implemented electronic measures

to promote trade.

According to trade researchers, the

region would annually gain US$17.5

billion in intra-COMESA exports if all the

member States fully implemented the

digital trade facilitation reforms that

involve the use of paperless trade

facilitation measures.

According to research findings, five

countries have the greatest intra-

COMESA export trade potential for

the region. These are Eritrea, Egypt,

Sudan, Libya and Ethiopia.

The researcher, Mr Adam Willie,

Principal Economist, Ministry of

Commerce, Industry and Enterprise

Development of Zimbabwe, said this

was based on their low baseline

implementation score of the six digital

trade facilitation measures in the

study.

“The implementation scores used in

the study only captured the paperless

trade facilitation measures that

enable efficient coordination and

exchange of data and documents

among government border agencies

and business community within a

country,” Mr Adam explained.

Top scorers under the assessment

criteria are Kenya, Madagascar,

Mauritius and Rwanda. According to

the researcher the top scorers have

exhausted their potential to generate

additional intra-COMESA exports with

respect to scaling up implementation

of the six e-trade facilitation measures

considered in this study.

Comoros, D R Congo, Djibouti,

Malawi, Swaziland, Seychelles,

Uganda, Zambia and Zimbabwe had

medium implementation scores thus

presenting significant potential to

increase intra-COMESA trade by

implementing the DFTA.

Page | 29

The study sought to investigate intra-

COMESA exports gains resulting from

full implementation of e-trade by

Member States. In particular, the study

sought to assess the impact of the

current implementation level of e-

trade facilitation on intra-COMESA

exports and secondly, to estimate the

regional gain in intra-COMESA exports

when all Member States fully

implement digital trade facilitation.

Arising from these findings, the study

recommended policy change by

countries with low to medium baseline

implementation scores to scale up

implementation of e-trade facilitation

to realise the demonstrated potential

benefits for the region.

“Efforts should be made to

understand country specific

circumstance on why they have not

been able to scale up

implementation,” Mr Adam

cautioned noting that ‘one size fit all

policies’ may not work as there is

greater variability in baseline

implementation levels.

The five days Forum is reviewing the

best 11 out 88 research papers

submitted by researchers from

COMESA members States. The policy

implications from the papers will be

presented to the COMESA policy

organs for consideration as a basis for

the policy making for Member States.

Over sixty regional experts drawn from

the academia, policy think tanks,

government and private sector

institutions and international

organizations are participating in the

Forum.

Ease of doing business in

Rwanda attracts Swiss firm

Fracht Group has been attracted by

the good business climate in Rwanda,

and will offer logistic services to its

client.

Rwanda’s favourable business climate

has caught the eye of Fracht Group;

a Swiss freight forwarder planning to

kick off its operations in the East

African soil. The company picked out

the country to be its headquarters in

the East African region and will

establish its logistics services to serve

the people of Rwanda. Rwanda’s

efforts to better the business

environment to lure more investments

are surely paying off.

The firm has a train of successful

operations in North and South

America, Australia, Asia and Europe.

The objective to enter the African

market has been backed by the stellar

records it has recorded in its previous

endeavors in other continents. There

have been similarities drawn between

South America and Africa in terms of

opportunities as well as challenges

that have prompted the move to

venture into Africa.

President Paul Kagame emphasized

the need for improving the business

environment to gain competitive

grounds in the region. The importance

of Foreign Direct Investments (FDI) has

developed a number of sectors in the

country and created employment

opportunities for the youth. They have

eased the financial burden on the

Government shoulders’, providing

finances to support projects.

The Swiss firm boasts of a wealth of

experience in its worldwide featured

services including airfreight and sea

freight. Its entrance in the landlocked

country will bring quality services to

Rwandans and help Rwanda

Revenue Authority deliver effectively

and efficiently. Fracht Group will be

helping with logistics services, as

Rwanda continues to increase trade

activities with imports and exports.

Page | 30

Long-term Investment in

Renewable Energy to Trade

Rwanda's energy rollout efforts

received a boost following the

operationalization of $50 million to

catalyze private sector's investment in

off-grid energy solutions.

The fund, managed by the World Bank

and rolled out through Development

Bank of Rwanda, is expected to

facilitate the electrification of about

445,000 households in the next seven

years.

This, when achieved, will increase

electricity access in the country by

about 19 per cent. The current energy

access rate stands at about 40 per

cent.

A section of the funds will also be used

to avail credit facilities to mini-grids

and developers in the sector.

The intervention comes barely a

month after local players in the

renewable energy sector under their

umbrella body, Energy Private

Developers, had come out seeking

financing to help meet national

targets.

The fund will allow a section of

SACCOs, commercial and micro-

finance institutions provide affordable

loans to their clients to purchase

certified solar systems.

Dr Livingstone Byamungu, the chief

investment officer at BRD, said the

main objective of the fund is to

increase affordability and reduce

access to finance challenges.

"The main objective is to increase

affordability and reduce access to

finance challenges in partnership with

SACCOS, commercial and micro-

finance banks and mini-grid

developers," he said.

The financial institutions will be able to

access direct credit as well as credit

lines that they will, in turn, avail to

households, micro-enterprises and

small and medium enterprises.

"The target beneficiaries are

households and businesses with an

objective to replace the use of

Kerosine, diesel and dry cell batteries,"

he said.

The fund will support Tier 1 off-grid

solutions that provide a basic service

level such as lighting, radio and cell

phone charging.

"Mini-grid developers can also get

resources directly from BRD,"

Byamungu noted.

Robert Nyamvumba, the energy

division nanager at the Ministry of

Infrastructure, said the fund will go a

long way in increasing the role of off-

grid solution in national electricity roll-

out.

In the current national strategy, off-

grid solutions are meant to account

for about 48 per cent of national

energy provision while on-grid

solutions account for the rest 52 per

cent.

Off-grid solutions will particularly target

rural areas that have the least access

to energy.

"Off-grid solutions will be through mini-

grids, solar energy solutions and small

power plants. The idea behind on-grid

solutions is to focus on productive

users and users living within 37 meters

of low voltage lines to lower the

distribution losses," Nyamvumba

explained.

He noted that access to energy and

electricity remains a priority for

government in a bid to continuously

improve Rwanda's investment

climate.

In the recent World Bank Doing

Business report, the getting electricity

Page | 31

Indicator ranked lowest at 119 position

globally largely due to challenges of

reliable power for productive uses.

World Bank country manager Yasser El

Gammal said the intervention is

meant to boost rural electrification

efforts to expand off-grid connections

to benefit about 1.8 million citizens.

"It is expected to stimulate demand by

providing financing to households and

small businesses through financial

institutions near them that they

already have relationships with.

There is also a window to support

private sector and providers of mini-

grids to further boost capacity, thus

impacting both the supply and

demand side," Gammal said.

The intervention particularly targets

rural areas which have very low

energy access rates. Some districts

such as Nyaruguru, Nyamagabe,

Gakenke, Gisagara and Gicumbi

have less that 10 per cent energy

access and are expected to benefit

most from the latest initiative.

In a recent interview with this paper,

Dr Ivan Twagirashema, the

chairperson of Energy Private

Developers, said there are over 100

private sector players in the local

renewable energy sector with limited

impact largely due to financing

challenges.

In the solar energy sub-sector, there

are three major operators, Mobisol,

BBoxx and Ignite power, which have

so far contributed about 11 per cent

of national penetration. The

government has a strategy to extend

electricity to the entire country by

2024.

The new plan 7-5-2 aims at

connecting all the households in next

seven years, by 2024, connecting all

the productive users by 2022, and

ensuring that the entire capital is

connected in the next two years by,

2019.

A Rwandan entrepreneur

nominated for international

export awards contest

The entrepreneur exports fresh and dry

chili pepper to European countries,

including Belgium, the Netherlands

and France.

Twahirwa is the founder and

managing director of Gashora Farms,

the country’s leading chili export firm

based in Bugesera District.

The company has contracts with more

than 1000 farmers.

The firm addresses challenges of post-

harvest losses by producing chili oil

(branded Didi's Chilli Oil) and is

exploring the expansion of its value-

added product line with the

production of pulp and chili powder.

He exports fresh and dry chili pepper

to European countries, including

Belgium, the Netherlands and France

and the chili oil (Didi’s chilli) to Geneva

UK and US.

In an interview with Business Times,

Twahirwa said that he is honoured to

be nominated for the awards as it will

boost his business venture.

“It is expected that the winner will walk

with USD 5, 000 but I’m looking at more

opportunities than just the actual

price. Such platforms present an

opportunity to meet with giant

investors. Therefore, I hope to make

relationships aiming at expanding my

business in terms of export capacity,”

he said.

Twahirwa is competing with other

seven African finalists from The

Gambia, Ghana, Zambia and Mali

who were also selected by the

International Trade Center (ITC).

The ITC 2018 Export Development

Forum will be held in Lusaka, Zambia.

Page | 32

At the forum, the finalists will present

their business projects to a jury with the

aim of receiving start-up funds to

develop and expand their projects.

The seven pre-selected social

entrepreneurs are Alan Chanda, from

Dytech of Zambia; Chisepo Chirwa,

from Out Source of Zambia; Diego

Dieudonné Twahirwa of Gashora

Farm Ltd, Rwanda; Omar Jallow of

Green Hectares Farm of The Gambia;

Victoria Muzumara, from Zambia's

Shopzed; Hamadoum Niangado, of

KoolFarmer, Mali; and Charles Ofori, of

Dext Technology of Ghana.

The panel of judges will, among other

things consider; the value of the

proposed business ideas, the social

impact of the project, the market

potential, the strength of the team,

and the financial model.

The Global Forum for Export

Development 2018 will take place on

11th and 12th of September.

The summit will also look into how

young people can contribute to the

implementation of the Continental

Free Trade Agreement (CFTA).

RSB intervenes amidst rising

funds mismanagement in

coops

Rwanda Standard Board has signed

an agreement with the African

Academy of Sciences to promote

transparency in use of funding among

local organizations and curb

instances of fraud and malpractice.

The development comes at a time

when reported cases of financial

malpractice such as embezzlement

and mismanagement in institutions

such as cooperatives have become

increasingly common.

For instance, the government recently

revealed that they were investigating

cases whereby over Rwf 900M had

been embezzled or stolen from

cooperatives in the last two years.

The initiative dubbed “Global Funding

Standards – Good Financing and

Grant Practice (GFGP), is a digitally-

supported system where donors and

grantees can jointly access and share

assessment data about the

development assistance provided to

organisations.

Effective December this year, the

system will enable all involved parties

to jointly access data online, share

financial expertise on management of

funds and exchange experiences

through regular assessment.

According to Jean Bosco Harelimana,

Director General of Rwanda

Cooperative Agency (RCA), the

move will contribute a lot to

harmonise funds and grants

management within financial and

non-financial cooperatives.

“For long, cooperatives would apply

for grants and loans but could not

clearly explain how the finances were

used up which also saw instances of

mismanagement and fraud,”

Harelimana said.

He added that such standards will

help to ensure that the loan and

grants are well managed.

Raymond Murenzi, Director General of

Rwanda Standards Board, said that

Rwandan cooperatives, SMEs and

institutions of any size could benefit

from the use of the new standards as

it promotes transparency as well as

proper management of funds.

“We have been facing management

related issues in the financial sector.

We will be sharing information online

going forward to avoid interactions

Page | 33

that can lead to corruption,” Murenzi

said.

RSB Director General Raymond Murenzi (right)

and Prof. Nelson Torto

RSB welcomes the move saying that

the implementation of the standards

will enable the Board to strengthen

collaboration with regulators,

stakeholders and partners in financial

sector towards the improvement of

the governance of organisations that

receive funding from the government

such as cooperatives among others.

Prof. Nelson Torto, the Executive

Secretary of the Africa Academy of

Sciences said that they expected that

the system will allow the parties to

harness their capabilities to promote

the implementation of quality

standards for the efficient, transparent

and accountable delivery of products

and services.

Africa Academy of Sciences links

academicians, researchers and

experts with work places.

Rwanda inks deal to access

Italian skies

It was Rwanda’s 78th air service

agreement as it seeks to gain

competitive space in the aviation

sector.

East African country Rwanda penned

down a bilateral air transport

agreement with European nation

Italy, giving the two countries access

to each other’s skies. It was Rwanda’s

78th air service agreement as it seeks

to gain competitive space in the

aviation sector. 59 per cent of the air

service agreements signed by the

African country involves fellow African

nations.

Open skies agreements have been

encouraged especially in the African

continent for the development of the

industry and robust growth of

economies. It enhances effective

transportation of goods and people to

and from designated destinations with

limited inconvenience. The aviation

sector in Africa is still lagging behind in

the global market due to poor

infrastructure and poor connectivity.

High ticket prices and low passenger

volumes have hindered its growth but

necessary changes are being made

to make it better.

RwandAir will carry out its commercial

flights to Italy as it seeks to increase its

footprint in Europe. Cross-continental

flights are essential for the tourism

sector as well that has fattened the

Government’s pocket. It will improve

the level of operations for RwandAir

who has not made a major impact

regionally with Kenya Airways and

Ethiopian Airlines competing for the

major share in the industry.

Page | 34

Quality Services. Better Solutions

Horizon Logistic’s primary business is the support of peace keeping

forces in mission areas. Currently we support the maintenance of

equipment for over 3,500 troops in Darfur under the United Nations

African Mission in Darfur (UNAMID) and Khartoum areas under the

United Nations Mission In the Sudan (UNAMIS). The company is also involved in clearing and forwarding services

including Import / Export Clearing & Forwarding

Page | 35

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ACCESSING FINANCIAL SERVICES

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