Trade between Rwanda and Germany could be strengthened further following the signing of a memorandum of understanding between the two countries over the weekend.

The agreement between German Association for Small-and-Medium-sized Businesses (BVMW) and the Rwanda Private Sector Federation (PSF) seeks to enhance partnership, especially in areas of information exchange, capacity building and trade facilitation.

According to Benjamin Gasamagera, the PSF chairman, the agreement will also assist in technology transfer that will benefit the manufacturing sector.

"We are optimistic about the mutual benefits involved...we will be able to tap into German advanced skills in manufacturing and technology. It is through such partnerships that we can improve performance of critical areas of the economy,” Gasamagera told Business Times.

We are also looking to partner with them so that they promote local products in Germany and the EU, he added.

Frank-Walter Steinmeier, the German Foreign Affairs Minister, urged Rwanda to continue creating a more business-friendly environment to attract more foreign direct investments from Germany and other Europen countries.

"You have a very good economic outlook, and your country’s economic policy is impressive. However, you have to be aware that market size is an important issue with regards to attracting investors into your country,” he told The New Times in an earlier interview.

Francis Gatare, the Rwanda Development Board chief, said the agreement provides local businesses an opportunity to seek deeper business partnerships with their German counterparts.

 Gatare said Rwanda is looking to improve the business and investment climate even beyond the World Bank indicators to attract more investors.

Last week, a German delegation composed of 21 business people from various sectors was in the country to assess investment opportunities.

The investors explored opportunities in the energy, infrastructure, mining, construction and agro-processing sectors.

They also held high level meetings with investment promotion board and Rwandan business operators from various sectors.

There are already a number of Germany companies in the country doing business, including the recently-launched Strawtec Group.

The latest EY’s attractiveness Survey Africa report 2014, indicated that Foreign direct investment (FDI) inflows into Rwanda increased by 6.3 per cent in 2013, making the country one of the top 10 nations favoured by investors on the continent.

Recently, Rwanda and Germany signed a bilateral financing agreement worth Euros7 million (about Rwf5.5 billion) to support decentralisation programme and good governance.