Tourism stakeholders move to curb revenue leakages

The growth of the tourism industry in the country has been characterised by an increase in foreign players and heavy reliance on imports of associated products and services. This has necessitated the introduction of measures to subsequent financial leakages, as well as ways to enhance local participation to increase the sector’s impact in the economy. It is against this backdrop that the Rwanda Development Board (RDB) and United Nations Economic Commission for Africa (UNECA) have set out to intervene to enhance local participation. The two bodies began by commissioning a study of the value chain where it emerged that there are numerous opportunities that are not being exploited by local suppliers and producers. Speaking on the sidelines of a forum convened to analyse the findings of the report in Kigali, yesterday, Antonio Pedro, UNECA’s Director for the Eastern Region, said the study had revealed that there were certain areas in the consumption pattern of the industry where there was an opportunity for local products to be increased. Pedro said, the trends observed and identified, such as the importation of fruits and vegetables, bring about questions on what needs to be done to increase the percentage in use that is produced locally. “The good news is that there are strategies to address that; some of them involve improving the capacity of local suppliers to meet the standards of the sector, while others have to do with improving and addressing the challenges in the supply chain,” Pedro said. Participants follow proceedings during the meeting. Experts say that among the interventions to address the leakages is well-crafted local content policies designed in close collaboration with all the stakeholders to make sure they are realistic and context specific so that it is not a one sided approach. “The study also provided the foundation for further analysis for better and informed decision making and recommendations which, together with RDB, we will be looking out to implement,” said the UNECA official. In the coming days, another study with a broader scope will be commissioned to involve multiple enterprises. Pedro recommended an integrated policy mix that addresses not only the specific concerns of the tourism sector, but all other aspects of the supporting sectors with a view to maximise the current potential. “You cannot have a local content policy if you do not have a well capacitated local supplier which has to do with increasing the skills level which involves the Ministry of Education. You cannot have local content when you do not address infrastructure issues through the Ministry of Infrastructure,” he said. However, he noted that some of the interventions have already been articulated in the second Economic Development and Poverty Reduction Strategy (EDPRS2) where tourism is one of the priority sectors. “It is a matter of operationalising it, going into the details to have evidence to support the approach to tourism development,” he said. The government says that though there is no crisis in regard to leakages, they are trying to capitalise on the inflows in the country given that tourism is leading in terms of exports. Faustin Karasira, the acting Head of Tourism Department at RDB, said one way of achieving that is by reducing imports used in the industry. “That was one of the purposes of the value chain study, which gave a focus on substitute products which are available locally. Why can’t they be given priority by the operators, why should we get vegetables outside Rwanda when they can be produced locally?” Karasira wondered. For products not readily available today, Karasira said that focus should be on how to engage other stakeholders and development partners so that in the near future there will be less reliance on imports. A greengrocer in Kicukiro market. (All photos by Timothy Kisambira) He added that the intervention would also make strides in making the economy more sustainable given the high cost of foreign currency. “This is also an opportunity for other business and support sectors, other players within the economy should also consider the tourism sector as one of their priorities, failure to do so will cause the statusquo to persist,” Karasira noted. Experts say that other considerations in the intervention should be around cost effectiveness and quality and should also include the Private Sector Federation. RDB’s Chief Tourism Officer, Yamina Karitanyi, said the interventions were also in the operators’ best interest as it is cheaper for them to do business in the country. Recent statistics from the RDB indicate that the tourism sector continued to grow in the past one year cementing its position as one of the top foreign exchange earners. In the year 2014, the sector registered a 9 percentage increase in the number of visitors to Rwanda, growing from 1.14 million visitors to 1.2 million, while revenue from the sector grew from USD296.4 million to USD 303million. editorial@newtimes.co.rw

News

Tourism stakeholders move to curb revenue leakages