The construction of border markets to boost Rwanda’s crossborder trade with neighbouring countries can be undertaken by local businesses and government would only intervene if local entrepreneurs fail, the Minister of Trade and Industry has said. 

François Kanimba said in an interview with The New Times, yesterday, that he has made it his mission to traverse all districts where the government has planned to build the markets to talk to local businesses and pitch the idea of them taking the business opportunity for themselves. 

The targeted borders are those with DR Congo, Burundi and Uganda.

As it implements its cross border trade strategy, government would like to see markets built around border areas to help facilitate border traders. 

The markets include Nemba in Bugesera District and Akanyaru in Nyaruguru District for trade with Burundi; Rusizi I in Rusizi District, Karongi (Karongi District), Rugari (Nyamasheke District), and Petite Barrière (Rubavu District) for trade with DR Congo; while Cyanika in Burera District will facilitate trade with Uganda. 

Feasibility studies

Kanimba said government has completed feasibility studies and designs for the construction of the markets and storage infrastructure in the areas to meet needs of traders such as storing agricultural products, as well as having permanent stands that can accommodate higher volumes of trade. 

The ministry is lobbying local businesses to invest in building the markets, initiatives the minister sees potentially lucrative for the investors who will be charging rent to cross-border traders once the structures are in place. 

The minister said his pitch received positive responses in Bugesera and Rusizi where local businesses seemed interested in the opportunity. 

"They like the idea that the government wants to leave them the opportunity to invest in building the markets,” Kanimba said as he shared local investors’ feedback in the two districts he has toured. 

He is expected in Burera today and Rubavu on Thursday to pitch the investment idea to local investors there. 

Details on how much is needed to build all the markets and storage infrastructure are not yet available because feasibility studies are ongoing for some, but the minister said the one of Nemba would cost around Rwf1.5 billion, while the one of  Rusizi I would cost around Rwf1.2 billion. 

Impact of border markets

The government’s 2012 cross border trade strategy, which recommended the construction of the markets, had also revealed that DR Congo is Rwanda’s largest regional export market, accounting for 70 per cent of formal exports and almost 80 per cent in 2011. 

The construction of modern cross border trade markets would reduce the rate at which informal cross-border trade is being done.

This would help both informal cross-border traders to have places to do their businesses and the government’s revenue collection because more organised trade would also mean easier collection of taxes. 

Official trade data released by the Ministry of Trade in 2012 indicate that Rwanda’s informal exports to neighbouring countries in 2011 were higher than formal exports.

The volume for informal exports was estimated at Rwf33.2billion compared to Rwf 21.9 billion for formal exports. 

But the country’s informal imports over the same period at Rwf 11.5 billion were significantly lower than formal imports at Rwf162.4 billion.