Industry is the only sector in Rwanda that achieved constant growth over the last decade, according to data from the National Institute of Statistics of Rwanda (NISR). The sector contributed 22 per cent of Rwanda’s GDP in 2023, while the target is 24 per cent in 2035, and 33 per cent in 2050, as per Vision 2050. ALSO READ: Rwanda’s industrial output up by 4.8% in August In this interview, Alexis Kabayiza, the Chief Technical Adviser at the Ministry of Trade and Industry (MINICOM), talked about the drivers of the sector’s growth and ways to sustain it. The excerpts: The industry sector has been registering growth, at least over the last decade. What led to that? The growth of the industrial sector in Rwanda over the years was attributed to several key factors, including, government policies and vision. The Rwandan government has implemented strategic policies aimed at promoting industrialization, such as the National Strategy for Transformation (NST) and the Vision 2050 plan. ALSO READ: Nine priority sectors for new industrial policy in Rwanda Pro-business policies that encourage industrial growth, such as tax incentives and improved ease of doing business have been implemented. Infrastructure development, significant investment in infrastructure, particularly energy (hydropower, renewable sources), transport, industrial parks, and Special Economic Zones, facilitated industrial expansion. Concerning support for Small and Medium Enterprises (SMEs), the government prioritized support for small and medium-sized enterprises (SMEs) through access to finance, training, and capacity building, fostering innovation and entrepreneurship in the industrial sector. Under Foreign Direct Investment (FDI), Rwanda has attracted increasing levels of FDI, thanks to political stability and reforms aimed at creating a conducive investment climate. Regional Trade Integration, Rwanda's membership in the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA) has boosted trade and industrialization opportunities. Trade agreements and partnerships have enhanced access to international markets, allowing Rwandan industries to export goods and attract foreign investment. Investment in education and vocational training has improved the skill set of the workforce, equipping individuals with the necessary skills for industrial jobs. A stable political climate has fostered an environment conducive to business operations and investment, contributing to overall economic growth. How does the sector contribute to the employment of Rwanda’s population? In Rwanda, various sectors have contributed to job creation and employment opportunities in recent years. In the manufacturing sector, the employed population was 217,799 in 2023 and 187,297 in 2022, where the new jobs created were 30,502 according to the labor force survey annual report 2023. What is the industry sector contribution to Rwanda's economy? Over the past seven years, the industrial sector has seen a steady increase in its share of GDP. This rise reflects a structural shift towards a knowledge-based and private sector-driven economy. Specifically, the industry’s share of GDP increased from 17 percent in 2017 and 2018 to19 percent in 2019 and 2020 to 20 percent in 2021, to 21 percent in 2022 reaching 22 percent in 2023 even in the second quarter of 2024. Which actions are being undertaken to sustain the sector growth under NST2 (covering 2024-2029), and even exceed it? Under Rwanda’s National Strategy for Transformation (NST2), several measures have been undertaken to sustain and accelerate industry growth. The industrialization and export promotion strategy includes promoting value-added industries, export-oriented manufacturing, and developing Special Economic Zones (SEZs). In skills development and innovation, there is a focus on strengthening Technical and Vocational Education and Training (TVET) institutions to equip Rwandans with the skills needed for industrial jobs. Under energy infrastructure expansion, the government is expanding access to affordable and reliable electricity to support industry and manufacturing. Public-Private Partnerships (PPPs) are being used to fund large-scale industrial projects and create sustainable industries. As regards, sustainable industrial development, focus is being placed on environmentally friendly industries, particularly in renewable energy and green technologies. What is being done to attract more investors to the industry sector? The government and industry players are actively working to attract investors through investment incentives, offering tax holidays, tax exemptions on imported industrial equipment and raw materials, and repatriation of profits. In terms of ease of doing business, Rwanda has streamlined its business registration processes and improved the regulatory framework, making it easier for investors to set up businesses. Regarding strategic trade partnerships, Rwanda's active participation in regional and international trade blocs provides access to larger markets, which is appealing to investors. For political stability, Rwanda’s reputation for political stability and transparency encourages foreign investment. As regards infrastructure support, industrial parks and Special Economic Zones provide ready-to-use infrastructure and services for investors.
