Rwanda’s push to more than double its industrial output in the next two to three years has gained shape with the outing of a grand plan to drive the country’s manufacturing sector. 

According to the National Industrial Research and Development Agency (NIRDA), the strategy is anchored on district industrial projects dealing in various aspects of industrial production.

NIRDA director general, Dr Joseph Mungarulire, says the industrial projects, commonly known as Community Processing Centres (CPCs), will be developed across the country by the agency on the ‘design, build and pass on’ model.

Under this model, he explains, government will set up the industrial centres as pilot projects, and then pass them on to the private sector after they have matured and proven to be viable and profitable.

Mungarulire says work has already started on some of the projects, including ceramics, milk processing, agro-processing, fashion and design, potato processing, as well as woodworks, making of essential oils, medicines and honey processing, among others.

The strategy aims at creating import substitution industries that will produce some of the goods that are currently being imported to help reduce the widening trade imbalance and boost Rwanda’s forex reserves, explains Mungarulire.

He says, under this programme referred to as the "domestic market recapturing strategy” NIRDA looks to start producing organic fertilisers, medicines and insecticide treated mosquito nets next year.

He says the government retreat that took place in March tasked them to start producing insecticide treated mosquito nets right away. The Ministry of Health was on the spot early this year for importing fake nets that exposed Rwandans to risk of catching malaria, besides loss of billions of francs in the procurement of the nets, which are a big component in the fight to eradicate malaria.

Mungarulire says this project will help minimise dominance of foreign firms that have been selling mosquito nets to Rwanda. He says they are now working on ensuring the right personnel and expertise are in place to kick-start the project. Production of organic fertilisers and making of tablets (medicines) are some of the other priority projects that will be undertkaen in the short-term.

"We are saying we don’t want to continue importing some of the medicines that can be made by our factory in Huye, which is currently idle. All we need to do is establish right practices and right standards and put in place mechanisms that will allow us sell the medicines at right prices visa vis imported drugs,” Mungarulire says.

"The domestic market recapturing strategy will enable Rwanda to produce locally many of the products that are presently being imported,” he points out.

He says that the projects will be developed on a semi-industrial basis. Mungarulire notes that the processing centres will be developed keeping in mind that the private sector will be called in at a later stage to operate.

"Like any of the other pilot industrial undertakings by NIRDA, they will be operated by government initially, but we will put in place an exit strategy where the private sector will be called in to expand them and undertake mass production,” he says.

Guarding against failure

"Whatever we do during the pilot phase will follow due procedure to achieve targeted industrial growth without exposing ourselves to the previous mistakes that hurt earlier efforts toward industrial development,” Mungarulire explains.

He says previous attempts to promote industrialisation have failed because of inherent loopholes in their design.

He cites instances where plants to produce milk and its products would be set up without considering waste handling and management, among other shortfalls. He says before the projects are implemented they will be examined by various experts to plug any loopholes and ensure that when they are handed over to the private sector, they continue running smoothly on a sustainable manner and profitably.

"After the products been tested and certified by Rwanda Standards Board, we shall then invite the private sector to take over for mass production,” Mungarulire says.

He points out that the agency is targeting industrial growth of 14 per cent next year and subsequent years, which is one of the goals of Vision 2020. This compares to about 6 per cent this year, he adds.

"We have to work towards achieving that target…we have to ensure sustainability of these projects, that’s the reason why we are going to follow all due procedures and ensure that project designs are reviewed by different experts to avoid past mistakes,” he says.

He notes that though the private sector will be invited to take over the plants later for mass production, they will always be consulted at all earlier stages of development to ensure that projects make business sense and serve the country’s development objectives. 

The law that operationalised NIRDA gives the agency the mandate to create a company that can operate at an industrial level. Therefore, these processing centres will operate under this mandate.

Mungarulire points out that NIRDA is already involved in a number projects under the Community Processing Centres, including a banana wine making plant in Rwamagana District and the Nyabihu Irish potato processing plant, as well as the dairy project in Burera District that was launched about two months back. There is also leather CPC in Gatsibo in Kabarole, which NIRDA is supporting to increase its production by equipping and training staff. "This CPS is important because Rwanda exports hides and imports leather to make shoes. This doesn’t make business sense. Therefore, NIRDA and trade and industry ministry will do all it take to have finished products made here,” he says.

He notes that currently the country make wet blue leather (semi-processed hides) that it exports only to buy leather from Ethiopia to make shoes. "We have to empower local firms like that in Gatsibo to process hides and stop these leather imports from Ethiopia.”

He says Rwanda’s industrial growth is slow because of the weak private sector, "but with right interventions we can go much faster than presently, especially by empowering incorporating the co-operatives in all these strategies. Once they see there is demand, they will come in…”

"We have to show the private sector that the businesses are sustainable and they can make money. And with regularly communication interactions, it shouldn’t be hard to achieve,” Mungarulire says.

Mungarulire is optimistic that with strong co-operation between RDB, BDF, trade and industry ministry and NIRDA, things can go much quicker in the field of the country’s industrialisation programme. "If something is wrong with any industry, we need to work together to be sure that the wanted growth in the sector is going to be achieved,” he points out.

Creating partnerships

"NIRDA will take over all the aspects of the activities at these projects with Business Development Fund, Ministry of Trade and Industry and Rwanda Development Board. The dairy plant in Burera is already producing cheese, yoghurt, etc; to diversify soon to make other products,” he says. He says the dairy project has even attracted interest from Spain, adding that government has started discussions with Spanish investors who were impressed by the cheese produced at the plant.

Under research development department division based in Huye, which handles issues of oil gas, waste management, bio-diversity, climate change, green urbanisation, etc, NIRDA is already working on geothermal energy. "We are in touch with people from Colorado University in the US who are interested in working with Rwanda on a programme called "Smart Village Micro-grid” to integrate all kinds of renewable energy. They will be coming into the country in a month or so to discussion the cooperation arrangement in areas of research on renewable energy and fertilisers,” he says. "The project is also quite ambitious as they also want to assemble some of the renewable energy products in Rwanda for the regional market because they think Rwanda could be the first carbon neutral country in Africa… It is something we looking forward to development with the team from US.”

Resume pharmaceutical production mainly for plant-based medicines from local medicinal plants especially those specific to Rwanda and sub-region; as well as those already discovered and using international pharmacopy copyrighted. He says NIRDA looks to start making pesticides against some potato diseases and hot pepper that was previously produced in the country.

Mungarulire said NIRDA will be recognising people that contributed to the development or discovery of new products, say drugs, to encourage innovation and support their rights to the innovation.

The Economic Development and Poverty Reduction Strategy (EDPRS II) launched in 2013 seeks to improve the quality of life for Rwandans and move the country from low income to a middle income economy by 2018.

Industrial development is one the key components of EDPRS II, as government targets creation of 200,000 off-farm jobs for the youth annualy. .business@newtimes.co.rw