Increase people's purchasing power to attract more foreign investors, experts say

Encouraging Rwandans to consume locally-produced goods as well as putting in place strategies that boost people’s purchasing power are crucial in attracting more foreign investors into the country. According to Tatsuya Narahara, the director for Africa, Middle East and Asia at Mayekawa, a Japanese firm that manufactures construction and mining equipment, increasing local consumption is an essential ingredient that serves as an incentive to woo investors in any given country. He, however, said boosting local consumption requires investing in the sectors that would help increase the per capita income and purchasing power. Rwanda has for the past two years been encouraging consumption of locally-produced goods under the Made-in-Rwanda campaign. The initiative aims to help reduce the trade deficit and boost the local manufacturing sector, particularly the small-and-medium enterprises (SMEs). It also seeks to enhance quality, standards, branding and packaging of local products. The country seeks to raise the per capita income to $1,240 by 2020, up from $644. Narahara said increasing people’s purchasing power will assure investors of a ready market. He pointed out that Mayekawa is targeting to increase its presence in Africa, and considers Rwanda as best option. “We are looking at Africa as a potential market and are ready to work with local investors to expand our presence on the continent,” Narahara said. He noted that the decision for many investors to commit to the continent is informed by market availability. According to Japanese experts, low demand and low purchase power on the continent scare away investors, noting that increase in local consumption is what largely developed Japan after the Second World War and trade embargo. “Therefore, what countries like Rwanda are doing in regard to encouraging local consumption is critical for economic sustainability of the continent as it will attract more investments to Africa,” Narahara said in an interview with The New Times in Osaka, Japan. According to Yuuichi Itou, the general manager of Komatsu Limited, which produces refrigerators and air conditioners, low purchasing power partly explains the minimal foreign direct investments in Africa. “Therefore, by championing consumption of locally-make products, Rwanda is helping create a bigger market that will attract more investors to the country,” he said. Meanwhile, at the sixth Tokyo International Conference on Africa Development in Nairobi, Kenya, scheduled to open on August 27, Rwanda will be looking to market its investment potential to more than 300 Japanese firms expected to attend the summit. The summit, which will be co-hosted by JICA and the African Union, is expected to bring together over 6,000 trade experts, investors and policy-makers from across Africa, Japan and elsewhere to deliberate on strategies to promote industrial development for sustainable growth. Many of the investors, according to Noria Maruyama, the director general in charge of African affairs at the Japanese Ministry of Foreign Affairs, will be seeking investment opportunities in countries like Rwanda to widen their presence in Africa.

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Increase people's purchasing power to attract more foreign investors, experts say