Business people, especially industrialists, should study the country’s monetary policy to understand better the market dynamics and contribute positively to the economy, Françoise Kagoyire, the National Bank of Rwanda director for supervision, has said. 

She noted that manufacturers, just like other investors, need to know how the economy is performing and what is expected of them to support sustainable growth. Kagoyire, who was speaking ahead of a planned meeting between manufacturers and the central bank this month, said the central bank wants to sensitise stakeholders about fiscal policy and other strategies that affect the operations.

Monetary policy is the process by which the central bank controls the supply of money and loans a bank can offer, often targeting a rate of interest for the purpose of promoting economic growth and stability.

"We want to meet the manufacturers to discuss areas in the monetary policy that they say are hurting their operations and see how we can come up with remedies,” she told The New Times in an interview.

According to Kagoyire, the meeting is expected to come up with solutions to challenges affecting the sector.

It will also discuss the role industrialists can play to help the country achieve sustainable economic growth, John Rwangombwa, the central bank governor, noted in a statement.

Manufacturers hope to use the opportunity to lobby the central bank to compel commercial banks to review their lending rates, which they say are hurting business growth.

The central bank cut the key repo rate, a rate at which it lends to commercial banks, to 6.5 per cent in June from 7 per cent to encourage banks to lend to the private sector.

"We want to use the opportunity to see how we can address some of challenges the sector is grappling with, including access to credit, high lending rates, and currency fluctuations and inflation,” Anne Rwigara, the Rwanda Manufacturers Association secretary general, said.

She noted that a supportive fiscal policy drives industrial and, therefore, economic growth of a country. We need explanations on what is happening to the local currency as it could hurt our competitiveness, Augustin Mugemangango, who operates a leather tanning industry, noted.

Rwanda’s industrial sector grew by 9 per cent and contributed 1.4 per cent to the Gross Domestic Product (GDP).

Central bank statistics indicate that the country’s total manufacturing sector grew by only 7 per cent during the first quarter of 2014 compared to 5 per cent during the same period 2013. However, the sector’s total turnover declined from 18.8 per cent during first quarter 2014 to 13.1 per cent in the second quarter of the year.