Farmers and suppliers are set to reap big, thanks to a new deal between the Common Market for East and Southern African States (COMESA) Business Council, local companies and hotels to facilitate local sourcing for partnerships (LSP) project.

Sandra Uwera, the COMESA business council chief executive, said yesterday that the council is partnering with Kigali Serena Hotel to fast-track the project and boost market linkages between suppliers and buyers.

According to Uwera, Kigali Serena Hotel becomes the first buyer to sign an agreement on promoting local sourcing in Rwanda.

The council is also working with the management of Nakumatt Holdings Rwanda and Inyange Industries to offer suppliers with best practices especially on food safety and quality management processes, she added.

"They will also be offering suppliers with technical expertise on the major requirements they must meet for sustainable business partnerships,” Uwera said.

She was speaking during the launch of the first COMESA business council LSP training workshop in Kigali, yesterday.

The four-day training project brought together more than 200 SMEs, policy-makers and business experts to deliberate on how best local producers can be linked to markets.

It is part of the one year COMESA business council project being implemented in six countries of Rwanda, Zambia, Uganda, Kenya, Ethiopia and Malawi.

The training focuses on building the technical capacity of selected enterprises, while brokering partnerships with the buyers to be able to establish sustainable integration of SMEs into the supply chains of corporate companies in Rwanda and the larger region.

According to Uwera, sourcing for products locally will enhance efficiency in service delivery through reduced transportation cost, customs levies.

It also allows companies to control quality along the supply chain, as well as greater flexibility in placing orders, she added.

This approach, therefore, offers opportunities in leveraging investments measured in hundreds of millions of dollars, Uwera noted.

It also helps integrate thousands of small farmers into local and regional supply chains, and create better livelihoods and more employment right down the value chain.

"Today, more experienced international businesses have a fast mover advantage and often seize the opportunities that come with being a part of a supply chain business processes of larger companies,” Uwera noted.

It is more cost-effective to outsource products from the market- than controlling the entire value chain, she explained.

Embracing quality, standards

Meanwhile, local producers were urged to embrace standards and quality along value chain as a tool of building sustainable relationship with buyers and market integration.

Martha Byanyima, COMESA’s country representative, said promoting market linkages for Rwandan producers requires total adherence to standards and capacity building along value chain of supply.

"The competitiveness of COMESA and EAC in an increasingly globalised multilateral economy depends very much on the private sector and SMEs to develop appropriate capacity to address supply side constraints,” Byanyima said.

This particular training, according to Byanyima, is an opportunity for Rwandan producers and processors to position themselves better in regional markets taking advantage of the knowledge and market linkages.

She said the low level of intra –COMESA trade (currently at only 10 per cent) is largely a reflection of low levels of industrialisation, diversification and production of competitive products across countries, in a complimentary manner.

Byanyima, called on producers to upgrade systems, technologies and ensure total compliance to build trust with buyers.

Emmanuel Hategeka, the permanent secretary at the Ministry of Trade and Industry, said developing sustainable local value chains will help SMEs become true entrepreneurs thus play a key role in promoting the country’s position -as a source of quality products.

Challenges

Rwanda’s SME industry still faces a number setbacks, including poor packaging, quality assurance challenges, traceability, and inconsistency in delivery and supply.

It is, therefore, in this regard that corporate companies have resorted to taking a more expensive but albeit sustainable route of working with companies that have a long standing reputation of timely and quality delivery of product and service.

However, the question of time, quality, cost and risk control still remains top most on the checklist thus defining the corporate reputation of companies.

It, perhaps, explains why many large enterprises hesitate to build relationships with smaller enterprises, Gerald Mukubu, the chief advocacy at the Private Sector Federation (PSF), said.

Unless SMEs meet the standard requirements necessary for these partnerships then they will find it difficult to harness from the increasing regional market, he added.

Therefore, we must ensure a total quality process management approach that ensures that every actor in a supply chain ties right into the efficiency and delivery of companies.

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