The Independent Uganda: You get the Truth we Pay the Price
One of the stumbling blocks for the manufacturing sector is Rwanda’s relatively small population. But manufacturers can access a much larger market for their products by exporting to neighbouring countries, namely Burundi, the Democratic Republic of Congo, Tanzania and Uganda. Rwanda is also part of the East African Community (EAC) economic bloc, which gives it preferential trade access to a market of 170 million people.
The government has adopted a glass-half-full approach to the fact that Rwanda doesn’t have direct access to the sea. Instead of complaining about being landlocked, “we normally consider ourselves landlinked because we form the centre of this continent”, said Opirah.
Rwanda wants to take advantage of its central location by becoming a regional logistics hub. Last year, Dubai-based DP World was granted a concession to build and manage a new inland container logistics centre in Kigali. The completed depot will provide warehousing, truck parking, a container yard and other auxiliary services, and is expected to improve the flow of goods to both regional and international markets.
“Rwanda aims to enhance the country’s logistics industry to support the export of products for regional and international markets. The DP World Kigali Logistics Centre will contribute to this,” said Sultan Ahmed Bin Sulayem, chairman of DP World, in an interview.
But while the EAC’s cross-border trade potential might look attractive on paper, in reality there are big impediments to intra-regional commerce.
According to Opirah, there are non-tariff barriers – defined as laws, regulations, and administrative and technical requirements (other than tariffs) – holding back trade.
“Non-tariff barriers are like 65% of what impedes the growth in intra-EAC trade… You find it is easier to export to the EU and US than to a neighbouring country or another African country,” he said, adding that issues around double taxation and the harmonisation of standards (for both goods and professional qualifications) needed to be ironed out.
Conclusion: Focusing on the opportunities
Rwanda’s slick PR machine often glosses over the fact that a large portion of the population still live in extreme poverty and that the country remains dependent on foreign aid. However, after visiting the genocide memorial, which has an excellent view of the Kigali CBD’s modern skyline, I couldn’t help but admire all that has been accomplished since those dark days in 1994.
During the panel discussion’s question-and-answer session, I asked the panelists to identify one untapped business opportunity in Rwanda that investors can take advantage of.
Soft Packaging’s Kagabo responded by identifying a simple but widely-used product: matches. He said virtually every household – whether lower or upper class – used matches. Yet, the product was still imported instead of being manufactured locally.
“It is very easy to produce, but no one has thought about doing it – it is a big opportunity. So that’s like one [idea] I can name, I’ve got more than a hundred in my mind,” he added.
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This article is a summary report of a panel discussion that took place during the Afreximbank annual general meeting, held in Kigali, Rwanda from 28 June to 1 July 2017. Produced by Maritz Africa Intelligence specifically for the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation.
