Kigali: The Minister of Trade and Industry has announced that in 2011 work at the Special Economic Zone has progressed well so that the first light industries will start their operations there this year. This is just one of the ministry's achievements of the past year. "Last year achievements were collective efforts streamlined by a number policies and activities which boosted a growth rate of about 10% compared to the 2010; regardless global economic crisis, the country maintained a stable scale of business and trading activities," said Trade and Industry Minister Francois Kanimba.
The Minister pointed out that compared to the year 2010, the private sector performance was very good. Exports increased by 31.7% mainly driven by mining, tea and coffee, even though the trade deficit deteriorated compared to 2010. The main imports were capital goods and energy which supported the economic growth of 8.8%.
Concerning internal trade, the country experienced a general price increase mainly due to the rising cost of fuel. Kanimba nevertheless highlighted control measures on sensitive products implemented throughout the year 2011, including the removal of import duty on sugar from outside EAC and COMESA to contain the sugar crisis; streamlining and regulating rice processing and distribution; and the fuel price which was kept under control on a 3-month basis.
"Though price increases have been observed due to the overall global economic crisis and droughts in the region, they have been kept lower than regional averages, because we have the lowest inflation in the whole region with 6.6%, while it was 28% in Uganda, 17.3% in Kenya, 16.8% in Tanzania and 11.7% in Burundi," the Minister explained.
However, Kanimba acknowledged that trade was still faced with challenges, most notably the non-tariff barriers in the northern and southern corridors where traders lose a lot of time, and the fact that EAC countries haven't yet harmonized their trade policy, fueling bribery and corruption.
On the positive side, the ministry signed new bilateral investment treaties with countries like the USA, the Democratic Republic of Congo, Congo Brazaville and Angola. The American treaty will pave the way to American investors to also access the EAC market.
Emmanuel Hategeka, the permanent secretary at Minicom, for his part pointed to a remarkable growth in industrial infrastructure which recorded a 15% increase mainly from the mining sector. The government, through the Special Economic Zone (SEZ), strategic plan wants to modernize the infrastructure and get it ready for occupation.
"The Gikondo Relocation project was approved by cabinet; some industries will be relocated to Kigali SEZ and others will be expropriated. The first phase of construction of light industries in SEZ will be completed before 2013," Hategeka said.
He added that 10 new industries had emerged during 2011 alongside 5 major laboratories including fuel testing laboratories; construction materials testing laboratories; pre-package verification laboratories; small-volume calibration laboratories and mycotoxins testing laboratories.
On top of the industrialization process, the ministry also boosted SMEs and cooperatives. The second establishment census completed in February 2011 registered 119,158 private enterprises which represents a 63% increase compared to the 2008 census that registered 72,994 enterprises.
Hategeka also pointed out that attention had been given to SME capacity building in which 3,252 SMEs benefited from technical assistance with the support of established government entities including the Business Development Fund (BDF) in the process of offering an SME guarantee fund, crediting lines and advisory services.
Frw 9.3 billion has already been mobilized mainly by guarantee funds and another Private Equity Fund (BPI) was established to offer SMEs equity financing and technical assistance," Hategeka said.
In addition, 139 Umurenge Saccos have been awarded full license for operations by the National Bank after they successfully submitted business plans designed with technical and financial support of the Rwanda Cooperative Authority (RCA). So far, 32 Umurenge Saccos have completed building their offices with their own means, mainly through community work of their members.
- Readers can access the 2011 Establishment Census, here.