Local logistics and public transport sectors have got a huge boost following the operationalisation of a new law legalising importation of Right Hand Drive (RHD) heavy trucks and buses.

The development comes nearly nine months after Cabinet meeting lifted a ban on the importation of right hand drive heavy commercial trucks was issued.

William Musoni, the Rwanda Revenue Authority acting deputy commissioner general for customs, said a new presidential law to the effect was published on February 26 in the Official Gazette and only applies to trucks weighing 20 tonnes and above, cross-border public transport buses and road tractors.

"The trucks are imported duty free and are only subjected to 18 per cent value added tax as per the new law,” Musoni told The New Times. He said so far (by Tuesday March 17) five trucks had been cleared by RRA under the new law.

The government recently signed agreements with investors in the logistics industry committing continued support to the sector.

Analysts say the new law will give Rwanda’s logistics and cross-border public transport some competitive edge over peers in the region.

What the law says

According to Article 3 of the modified law, which covers steering apparatus, reversing gear system and security accessories, all motor vehicles to be registered in Rwanda must have a steering apparatus on the left hand side except trucks having at least 20 tonnes loading capacity, buses used for cross-border public transport and road tractors.

The new law modifies and complements Article 88 of the Presidential Decree n° 85/01 of 2/09/ 2002 regulating general traffic Police and road traffic.

What the development means for the two sectors

Abdoul Ndarubogoye, the vice-president of Rwanda Transporters Association, said: "It gives us a great sense of relief… The move will help reduce the cost of doing business and make the local logistics sector more competitive in the region.

He added that transport firms will now be able to save up to $3,000 (Rwf2.2 million) on each truck bought compared to the cost of a similar left hand drive vehicle.

A recent research by Ministry of Trade and Industry indicated that by lifting the ban on the importation of RHD trucks, an estimated $500 million (Rwf362.6 billion) would be saved on road transport services annually.

Ndarubogoye is one of the transporters whose trucks were denied entry into the country a few months ago.

Over 12 trucks that were imported when the Presidential Order was issued were denied entry at Rusumo border by RRA about six months ago.

Raphael Tugirumuremyi, the RRA deputy commissioner general in charge of customs, had attributed their action then to lack of a law allowing importation of RHD commercial trucks.

Commenting on the development, Antoine Manzi, the director for advocacy at the Private Sector Federation (PSF), said it will strengthen the working relationship between government and the private sector.

"We have already received a message from the Ministry of Infrastructure confirming the instruction. This will strengthen further the way we work with government to realise the economic objectives of the private sector, as well as the country,” Manzi noted.

Theodore Murenzi, the chairman of the Rwanda Long Distance Truck Drivers Association, said it is an opportunity for business people to come and invest into the industry. "It also gives us relief to focus on other challenges that still need to be addressed.”

He added that more transporters have placed orders for RHD trucks, a move that will significantly strengthen the sector.

Fred Seka, the chairman, Association of Clearing and Freight Forwarders Rwanda, said Rwandans will no longer have to depend on foreign trucks to transport their goods across the region.

"This was, not only expensive, but also causing unnecessary delays,” Seka said. It also means that banks can now extend credit to investors to buy more trucks.

According to business experts, Rwanda needs a faster and more robust logistics industry to harness the opportunities presented by the growing regional trade.

Venuste Bigirimana an importer, said to achieve this, more cargo trucks are required to facilitate movement of goods across the region.

Some local cross-border bus firms had started buying left hand drive buses and registering them in neighbouring countries as that was cost-effective.

Since the new law allows importation of RHD buses, this should now change, according to analysts.

business@newtimes.co.rw