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Rwanda: Dawn of a New Era for Rwandan ExportersTuesday, December 23, 2014 > 10:41:46
In August, the government signed a bilateral export agreement with institutions and exporters that aimed at supporting the private sector players to increase the country's export volumes in the short to medium-term.
Since then, government has signed similar memoranda of understanding (MOUs) with 38 private sector firms in different sections of the economy, including mining, agro-processing, manufacturing and coffee. It has also signed agreements with 19 tea co-operatives and factories working with the National Agricultural Exports Board (Naeb).
The government, through the Ministry of Trade and Industry identifies firms with the potential to export and helps unlock their export potential. Under the agreements, companies commit to expand the scope and mode of production, as well as improve quality along the value chain to boost export revenues.
The contracts, which will be subjected to reviews every after one year, are geared at enhancing economic growth and increase exports by 28 per cent as per the second Economic Development and Poverty Reduction Strategy (EDPRS II), according to the Ministry of Trade and Industry.
Under the initiative, both the government and private sector are expected to fulfill certain performance targets to ensure it is a success.
"We are working to boost exports in mining and other sectors through public-private partnership... this is a good development that will ensure sustainable export growth," said Jean Malic Kalima, the Rwanda Mining Association chief.
Government is committed is to grow exports and narrow the country's trade deficit as one of the key pillars of EDPRS II, which aims to achieve and sustain export growth at 28 per cent per year.
Under resolution number 22 of this year's eleventh national leadership retreat; government agreed to partner with the private sector to stimulate export sector growth.
"We hope with the MOUs signed, the future of mining sector is bright because some of the challenges are temporary and the government has committed itself to solve them," Kalima said.
He is optimistic that with the partnership and common understanding between the public and private sectors, all issues will be addressed and the sector will be able to achieve the EDPRS II targets of $400 million revenue from mineral exports by 2017 or even surpass it.
Speaking at the signing of other deals with eight more firms, Minister for Trade and Industry, Francois Kanimba, said the objective is to facilitate the companies with the kind of infrastructure required to improve output and ensure quality and also link the companies to markets.
Kanimba said the infrastructure will include construction and rehabilitation of roads linking producers to markets, rural electrification to reduce the cost of production, and logistical infrastructure such as storage facilities for horticultural products.
To ensure the initiative bears fruit, a monitoring committee has been put in place by the Ministry of Trade and Industry composed of experts from the ministry, Private Sector Federation and government institutions, like the standards watchdog, to monitor the process and the different achievements or challenges.
The National Institute of Statistics of Rwanda GDP figures for the third quarter of this year indicate that the mining industry fetched Rwf26 billion, reflecting 2 per cent contribution to the overall GPD. The manufacturing sector declined by 5 per cent due to high cost of imported raw materials, as well as low production of cereals, a major raw material in local manufacturing. Manufactures are therefore optimistic that with these agreements, the sector's contribution to the national growth will increase in the near future.
According to the second national export strategy, major constraints to export sector growth highlighted are categorised in four areas of interventions, supply side capacity, market access, export infrastructure and logistics, and export finance.
Through TradeMark East Africa support, a consultant has been hired to conduct a study on export finance with the objective of increasing access to funding for exporters. It will also provide information on state of export finance in Rwanda.
Though the government-private sector partnership will not be bound to legal penalties, the annual evaluation will involve "name and shame" segment for those parties that would not have lived to their commitment.