Govt, businesses discuss ways to boost manufacturing, exports

Manufacturers and business experts have called on the government and the private sector to do more to boost Small and Medium Enterprises to significantly bridge the country’s trade deficit. They made the call yesterday during a Made-in-Rwanda Symposium organised by the Private Sector Federation (PSF) in partnership with the Ministry of Trade, Industry and EAC Affairs (MINEACOM). They contended that effective economies of scale coupled with quality assurance in the manufacturing industry would result in low production costs and affordable products, hence recapturing the local market and promoting the country’s exports. Rwanda’s imports are four times its exports in value, according to information from Rwanda Development Board (RDB). Janvier Ndayirata, the managing director of Real Packaging Manufactures Ltd, said proper packaging was important in the promotion of exports as it contributes to the competitiveness of a product. He, however, expressed concerns over lack of sufficient means to meet the demand. “Setting up a packaging factory is expensive. We have had over 10,000 demands from various sectors, including construction and agro-processing, but we cannot satisfy such demand because our production capacity falls short,” Ndayirata said “We need to produce at least nine tonnes of processed paper bags per day, translating into 342,000 paper bags, but our production capacity is only three tonnes daily.” He added that financial institutions were not doing enough to finance SMEs to acquire advanced manufacturing technologies. Michel Makolo, the managing director of Ruliba Clays Ltd that manufactures tiles and bricks, said: “If we could produce at a large scale, we can sell and export more. We will bring down our production costs and our clients will be able to get more affordable products.” Ruliba Clays Ltd Managing Director Michel Kayihura Makolo speaks at the symposium as Busi Legodi CEO CEMERWA looks on. (Timothy Kisambira) Cephas Nshimyumuremyi, the founder of Uburanga Products Ltd that manufactures cosmetics, said most Rwandans setting up factories are university graduates who have acquired skills but have no means to ensure sustainability of their enterprises. “Young startups are forced to get loans from banks. In reality, it is difficult for a small factory to begin with bank loans and expect it to be successful because they will be asked to pay interest even before breaking even,” he said. “Because you start while you need machinery, workplace personnel and marketing for your products, it constitutes a large investment.” The Chief Executive of Rwanda Development Board, Francis Gatare, noted that as regards institutional support, some industries had been identified as having opportunities, but they were scattered. “We are going to work with National Industrial Research and Development Agency (NIRDA) to consider how we put ideas together to see if it can be possible to put SME industries into clusters based on their similarities,” Gatare said “We can borrow the concept of an incubation centre because it has turned out to be helpful. After a company has got support and has met the requirements, it can move to its own working place, but after being supported together with others in terms of technology and quality [of products].” The Minister for Industry, Trade, and East African Community affairs, François Kanimba, said that aside from the usual traditional exports such as tea, coffee and minerals, new products have not yet gained the needed momentum, yet they exist. “There are many Rwandan entrepreneurs who are making creative and innovative products. This is proof that the Made in Rwanda products can develop. We are discussing what we have to do to further support Rwandan entrepreneurs and give them more privileges than their foreign counterparts,” he said. Minister of Trade, Industry and EAC affairs, François Kanimba gives his keynote address during the symposium. (Timothy Kisambira) During the last 12 months of the Made-in Rwanda campaign, the government made numerous decisions to enable Rwandan entrepreneurs become competitive including the recent waiver of Value added Tax (VAT) on imported raw materials for clothes and shoe manufacturing and the machinery used to boost local entrepreneurs’ competitiveness. According to a report by the National Institute of Statistics of Rwanda for the first quarter of 2016 on Formal External Trade in Goods, Rwanda’s total trade was $ 589.75 million, higher by 3.27 percent over the first quarter of 2015. Exports fetched $91.79 million, imports accounted for $456.93 million and re-exports were $41.03 million. PSF CEO Stephen Ruzibiza gives his remarks at the symposium (Timothy Kisambira) editorial@newtimes.co.rw

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Govt, businesses discuss ways to boost manufacturing, exports