Trade Minister Sebahizi on boosting local manufacturing, addressing market mismatch

Last week, President Paul Kagame appointed Prudence Sebahizi as the new Minister of Trade and Industry under his five-year term. A seasonal trade expert, Sebahizi is expected to steer the trade and industry docket and play a key role in promoting Rwanda’s industrialisation goals. Until his appointment, he was the Director for Institutional Matters and Programmes Coordination at the AfCFTA Secretariat in the capital Accra, Ghana. The New Times’ Alice Kagina spoke exclusively to Sebahizi on a wide-ranging issues, including his top priorities, Rwanda’s trade ambitions, boosting domestic manufacturing capacity, and the role of the private sector in narrowing trade deficit, among others. Below are excerpts; Congratulations on your appointment as a trade minister. Did you see this coming? I already had a job and I never expected this kind of appointment, which is exciting of course. I got a hint about the appointment five days before the announcement. It’s not a matter of acceptance but a commitment to serve the country. I have been serving in different capacities and worked with the Rwandan government in different ministries including this one, I was in the African Union system for 10 years and it’s always a pleasure coming back to serve the country. What are your key priority areas as you take on this new role? First of all, there are a number of projects in the pipeline that I will build on. Second is tackling the current mismatch between production and market. We are facing a challenge where the harvest is not predictable because it depends on the season and weather; sometimes there is a surplus and other times a shortage. The third priority is driving a shift in a way the private sector supports trade. This is because most traders invest their skills, time and money more into imports, and for us to support local manufacturing, we must look at ways of taking our production to both local and international markets. What actionable steps are you going to take to address the production-market mismatch? This is mainly for agricultural produce, we have been told about rice and maize but there could be many others and there are a number of solutions we can work on including the involvement of all stakeholders to put in place necessary infrastructure. ALSO READ: Govt to buy 26,000 tonnes of rice to cushion farmers from losses These are post-harvest handling facilities that should be established and strengthened where they are available. Another thing is to monitor what and when we produce and efficient management that will help to avoid price volatility because when there is a surplus, there should be a mechanism to manage it, and when there is a shortage, a mechanism to feed the people. This can only be possible with the right infrastructure and companies specialized in commodity exchange. Additionally, a reserve fund at the Ministry of Finance could help in bridging the gap when it occurs. Agricultural production is seasonal and unpredictable. You might plan, anticipate but find a different reality, that’s why you need a flexible fund that can be used on a need basis. Rwanda has been experiencing a high trade deficit for a long time. How do you see this being addressed? While this is not something you can completely tackle overnight, there has to be measures in place to gradually reduce it. There is an industrial policy in the pipeline that I want to fast-track its adoption and it will help boost the local manufacturing sector and encourage business people and investors to put their money in manufacturing. Import business is more speculative because for instance, importing a container from China may take about five months and many things could change within that period including prices. Trade imbalance is a long-term problem and increasing imports can only exacerbate it. Importing for investments is good but direct consumption is not sustainable, you would rather put much effort into producing what you consume. Given the geopolitical tensions and global shocks. How best can Rwanda navigate these challenges and position itself for continued international trade relations? I am not worried about Rwanda’s trade destination because the market is wide. The country is part of EAC [East African Community], ECCAS [Economic Community of Central African States], COMESA [Common Market for Eastern and Southern Africa], and now AfCFTA, in addition to European markets. A producer should not be worried about the market regardless of the tensions because political tensions will not happen at the same time with all countries. It’s just a matter of being dynamic and identifying a sustainable market. The challenge is what we produce and how consistent we can be. Has the ban on second-hand clothes yielded any results? Most imported products on the Rwandan market are substandard, some wouldn’t even be allowed on markets where they are coming from but they end up here. There are two challenges with trade remedies. The first is investigation and the second is inspection capacity. If you were to ensure that every product that comes into the Rwandan market meets the standard, you would have to conduct a legitimate investigation where they are produced. We do not have the capacity to investigate that whatever product with an internationally recognized brand produced from a country is actually not fake. Within the country, we do not yet have enough capacity to inspect where those products have been dumped through smuggling. The best way to deal with second-hand cloth was to introduce high tariffs, and the policy of banning them was right if we want to deal with this in a sustainable manner.

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Trade Minister Sebahizi on boosting local manufacturing, addressing market mismatch