Agri-exporters to benefit from Export Growth Fund

Donatilla Nibagwire acquired a $100,000 (about Rwf80 million) grant from Export Growth Fund in 2016 to further her market penetration. She doubled her export volumes from two tonnes of fruits and vegetables. Nibagwire exports bananas and eggplants, among other produce, mainly to Belgium, Gabon and India. She has been engaged in the business since 2001. “The airline that used to charge me $1.6 a kiliogramme has since reduced the charges to $1.25 because the trade volume increased,” she said. Nibagwire was speaking on Wednesday during a local producers and exporters’ breakfast meeting in Kigali, which intended to find solutions to financial, production and market related issues. The Export Growth Fund (EGF) was initiated by the Government in November 2015 to help spur the country’s export mainly through supporting small and medium enterprises engaged in exporting local products, which had difficulties accessing financial services. The Fund was started with Rwf1.5 billion from the Government and, in 2016, KFW, a German development bank, bankrolled the facility with Euro 8.5 million, bringing the total amount in the Fund to about Rwf10 billion. Farmers and exporters who attended the meeting said that they used to get bank loans at interest rates of between 16 to 20 per cent. But due to the intervention, interest rates now stand at between 10 to 14 per cent, thanks to a 6.5 per cent subsidy. However, Dr Livingstone Byamungu, the chief investment officer at the Development Bank of Rwanda (BRD), said there is a low uptake for the facility’s support as only eight projects have been financed at a tune of Rwf1.35 billion. Dr. Livingstone Byamungu, the Chief Investment Officer at the Development Bank of Rwanda speaks to exporters during the forum in Kigali Yesterday. / Timothy Kisambira He said there was little interest to use EGF’s services due to lack of awareness about the facility and how it works. “We want the agri-business sector to use the money to scale up exports,” Byamungu said, pointing out that the Government will be injecting Rwf1 billion annually into the Fund. Kinazi Cassava Plant managing director Emile Nsanzabaganwa said EGF can support farmers to solve the issue of lack of raw materials. The Rwf10 billion plant, which processes cassava for both the local and export markets, has been operating at about 30 per cent of its daily capacity. How the facility works The president of the Chamber of Rwanda Farmers at the Rwanda Private Sector Federation (PSF), Christine Murebwayire, said, thanks to the Fund, farmers will help ensure sustainable produce and market and lessen the country’s import bill. “As farmers, we have to change our mindset and improve operations. We should use this facility and other government financial opportunities to increase both the quality and quantity of our produce,” she said. Christine Murebwayire, the chairperson of the Chamber of chats with Stephen Ruzibiza, CEO of the Private Sector Federation during the Exporters meeting yesterday in Kigali. / Timothy Kisambira Epimaque Nsanzabaganwa, the horticulture division manager at National Agriculture Exports Development Board (NAEB), said they have been negotiating with airlines such as RwandAir and KLM to reduce transport charges for agro-exports. EGF is designed as a single facility with three separate interventions. The first is an investment catalyst fund which provides a 6.5 per cent subsidy on the interest rate of loans targeted toward private sector investments in export oriented production. The loan currently does not exceed Rw900 million, according to Byamungu, who revealed that the government wants to go beyond such limits to further support exporters. Stephen Ruzibiza, CEO of the Private Sector Federation speaks during the Exporters meeting yesterday in Kigali. / Timothy Kisambira The second support is a matching grant for market entry or penetration related costs. This grant covers 50 per cent of the cost of the exporter’s needed promotional activities for their product and does not go beyond $100,000. The beneficiary should prove that they covered the required 50 per cent before being given such a facility. The third assistance is an Export Guarantee Facility, which provides transaction-related guarantees to commercial banks to secure export finance transactions up to 80 per cent of the value. This facility is intended to help an exporter carry on their business when they have not yet been paid for their products. The beneficiary has to settle the dues after being paid for their exported commodities. The facility is valid for nine months. Byamungu said that about three weeks ago, BRD signed a memorandum of understanding with Bank of Kigali and BPR to offer financial services under EGF, adding that it seeks to work with more banks. Rwanda’s agricultural exports generated $272.46 million in the Financial Year 2014/15 up from $217.62 million in 2013/14, according to NAEB’s 2015 report. editorial@newtimes.co.rw

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Agri-exporters to benefit from Export Growth Fund