Parliament has summoned the Minister of Trade and Industry and CEO of Rwanda Development Board (RDB) to address critical issues plaguing small and medium enterprises (SMEs) factories and the hospitality sector.
The summons were made in response to concerns raised about the lack of competition among hotels in public tenders, inadequate electricity and internet infrastructure, and the high cost of production affecting SMEs.
On June 29, the Lower Chamber of Deputies unanimously passed a resolution to summon the RDB CEO and the Minister of Trade and Industry for verbal explanations on the challenges faced by the hospitality and tourism industry and SMEs factories, respectively.
This decision came after the plenary session adopted the report of MPs' countrywide tour, conducted between May and June, which assessed the performance of the hospitality industry and SMEs factories established for export promotion.
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Challenges in the Hospitality and Tourism Industry
During the presentation of the MPs' field visits report, Edda Mukabagwiza, the Deputy Speaker in charge of parliamentary affairs, highlighted significant progress in promoting investment, expanding the market for locally made products, and boosting tourism. However, she also pointed out several critical challenges that demand attention.
Among the challenges identified were touristic sites lacking essential infrastructure such as roads, electricity, water, reliable internet, parking facilities, tourism attraction activities, and adequate sanitation facilities.
Moreover, roads surrounding lakes in different parts of the country, including Muhazi, Mugesera, Ruhondo, and Burera, have not been upgraded to support tourism development.
Issues related to poaching in reserves and parks, as well as the damage caused to residents' crops by animals leaving the parks, were also raised. Furthermore, unresolved disagreements regarding the expansion of the Volcanoes National Park have led to frustrations among residents with land in the affected area.
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Concerning the accommodation subsector, Parliament noted that certain regions, such as five sectors in Ngoma District (Eastern Province) and five sectors in Gisagara District (Southern Province), lack adequate accommodation options for visitors and tourists.
Additionally, the insufficient supply of electricity and internet connectivity posed significant challenges for hotels, motels, and lodges operating in these areas.
Parliament further highlighted the issue of five-star and four-star hotels being granted the privilege of providing hotel services to public entities without competition for public tenders.
This selective approval restricts market opportunities for other hotels and undermines the principles of fair competition and equal opportunities for investors in public tenders.
Issues Affecting Small and Medium Factories
While acknowledging progress in supporting the growth of SME factories, MPs identified several challenges during their assessments. Industrial parks designed to foster the development of these factories were found to lack essential infrastructure such as roads, water, electricity, and ICT.
Furthermore, some industrial parks, despite being equipped with necessary facilities, were financially inaccessible to investors due to the high cost of plots.
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Delays in obtaining standard certificates from the Rwanda Standards Board (RSB) and the Rwanda Food and Drugs Authority (Rwanda FDA) were identified as another concern.
Small factory owners also expressed dissatisfaction with the high costs of services offered by the Rwanda FDA, which they deemed disproportionate to the size of their businesses.
For instance, premises licenses costing Rwf200,000 are valid for only one year, product registrations require a fee of Rwf500,000 for five years, and good manufacturing practices certificates cost Rwf200,000 and are valid for five years.
The reliance on imported raw materials by small factories has resulted in non-competitiveness with factories from other countries, even in the local market, due to the high cost of production.
Insufficient electricity supply, particularly during daytime operations, was identified as a significant concern for factories, and many were found to be operating below their capacity due to factors such as raw material shortages.