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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Rwanda: Trade Minister Pinpoints Cause of Dwindling Exports

Wednesday, February 24, 2016 > 10:32:20
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(All Africa By Moses K Gahigi)

Persistent low agricultural production, insufficient power and a declining trend of commodity prices have been blamed for the country's dwindling exports revenues.

Over the past few years, the country's trade deficit has been widening despite regional and international markets opening up for Rwandan products.

In 2015, formal exports performed poorly, decreasing by 6.8 per cent in value to $558.8 million from $599.8 million after an increase of 4.7 per cent in the same period in 2014, according to figures released by the National Bank of Rwanda (BNR). This was mainly a result of poor performance recorded by the mining sector, which saw a decline of 42.1 per cent.

"The declining trend of exports and the widening trade deficit we are experiencing in the economy is a problem," Senate President Bernard Makuza said at a recent session including the line ministries as well as private sector aimed at improving the country's exports.

He said that, looking at the country's development frameworks in place, vision 2020, EDPRS and the seven-year plan ending next year, they are clear on what the country wants to achieve.

However, total formal exports increased in volume by 20.5 per cent, attributed mainly to re-exports which increased by 50.5 per cent, coffee exports by 17.7 per cent, tea exports by 8.9 per cent as well as non-traditional exports by 8.0 per cent.

Responding to the senate, Minister for Trade and Commerce Francois Kanimba noted that there has been a declining trend in export.

"Before 2013 there was relative growth in exports, but between 2013 and 2015 this didn't continue; in fact, it went far below the EDPRS2 and Vision 2020 targets" he said.

Political instability

Mr Kanimba attributed the declaiming trend of exports over the past few years to political instability in countries which have been key destinations to Rwanda's exports, such as Burundi and Democratic Republic of Congo.

The minister also noted that insufficient energy, which has caused persistent power outages, has greatly affected industrial production, which slowed down production in quantity and quality.

"The problems with energy are not only with power outages, but also with power costs, as it stands our companies are not competitive due to this factor," said Mr Kanimba.

"Leaving alone our manufacturers competing unfavourably against regional manufactures in their countries, they are also easily out-competed by those companies in the Rwandan market."


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