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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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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.
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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
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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
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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;
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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.
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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
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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
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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
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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.
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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-
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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
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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
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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
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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
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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
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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.
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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
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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.
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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.
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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.
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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
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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.
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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
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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.
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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
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FACILITATING SMEs
ACCESSING FINANCIAL SERVICES
www.bdf.rw