The Rwandan private sector through its umbrella body, the Private Sector Federation (PSF) has re-affirmed commitment to compete as Rwanda implements the East African Community (EAC) Customs Union.

Emmanuel Hategeka the body’s CEO said that having applied the region’s lower common external tariff and elimination of internal tariffs, stakeholders of the federation look forward to the competition in the Customs Union. 

Hategeka was speaking at the official launch of the Customs Union on Monday and said: "Yes we are! But if we’re not, is there an option?”

He pointed out that Rwanda’s private sector has already "tasted” the competition under the Common Market for Eastern and Southern Africa (COMEASA) Free Trade Area’s (FTA) competitive regime. 

Under the COMESA FTA, Kenya has been exporting goods to Rwanda under a duty free regime since 2004 while Uganda originated goods have been attracting six percent import duty. Kenya and Uganda are Rwanda’s major trading partners in EAC.

"These two countries contribute close to 90 percent of our imports from EAC. We have to be innovative, build win -win partnerships with our counterparts in EAC for synergies and efficiency,” Hategeka explained.

He underscored the growing partnerships within the private sector pointing out the emergence of insurance brokers and clearing agents as business is brokered at the first port of entry.  

"This is also true for manufacturing entities if we have to survive in the long run,” he said, referring to the development of cross border clusters in agribusiness, tourism, transport and logistics.

"Business services is a strategy we continue to encourage in our private sector forums in EAC,” 

"An attractive business environment with lower costs of production coupled with innovative cooperative engagement of productive entities in EAC will also help us to move away from the net importer position we are today with regard to EAC.” 

It is expected that the Customs Union will provide substantial increase in intra EAC trade, investment flows and revenue.

Hategeka said weaker firms may in the medium term overcome lack of competitiveness, through additional investment in newer production technologies, specialisation in activities where they have a competitive advantage, re-training of human resources and mergers with strategic partners.  

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