PM in Parliament to clarify on economy

Prime Minister, Bernard Makuza, yesterday, appeared before a joint parliamentary session where he presented a detailed report on the status of the nation’s economy. In his presentation, the Premier mainly highlighted the performance of core products in the market, including, rice, sugar, fuel, and cement, among others. “Generally, the market trend is positive although there are challenges on the ground, but there are plans and strategies in place to deal with the problems,” said Makuza. He added that the amount of sugar required in the country kept increasing over the past years while production failed to match the trend. Part of the reasons for the continued increase of sugar prices is that Kabuye Sugar Works that produces only a third of the required sugar intake in the country, closed down for sometime between May and June, which highly impacted on the prices. “Also, sugar manufacturing companies in Uganda and Tanzania closed down for sometime due to floods and when they opened, they were selling at a slightly higher price,” added the Premier. According to him, Rwanda partly relied on imported sugar from Egypt and that during the revolution there, the prices went up. This happened at the same time when factories in Zambia opted to export their sugar to Europe since factories in Brazil and India were facing problems. Prime Minister Makuza told the lawmakers that currently, measures are in place to control the prices. “The government is finalising a study to make Kabuye factory more effective and productive. We are also in talks with traders to encourage them on bulk purchase of sugar which would reduce the prices, and the EAC is in negotiations to lift taxes on sugar imported out of the bloc,” he said. He said that so far, businessmen are happy with the decision and the policy may be in place in a month’s time. The current cost of a 50-kg sack of sugar at Kabuye sugar works is about Rwf 31,000 and retail traders have agreed not to exceed Rwf 37,000. “These commitments have to be enforced and harmonised in the region as we come up with ways of increasing the production at Kabuye sugar factory,” said the Premier. Makuza also told lawmakers that rice production has increased despite several malpractices on the market, which have since been dealt with. “Several measures were put in place and now there is a clear separation between, importers, processors, wholesalers and retailers and this has clearly had a significant impact on how rice is sold,” he said. The Prime Minister also justified the intermittent cost of cement. He said that at one point, prices shot up to Rwf 14,000 a bag because the cement processing factory was undergoing renovation. “After the renovation, towards the end of 2010, cement prices went down to about Rwf 8,000,” he said. Fuel prices have lately been on the rise due to reasons beyond Rwanda’s control; some of them include Rwanda’s landlocked status and the Arab uprisings. According to the Prime Minister, although the prices of oil products were going up globally, the government took measures to contain the pump price, mainly by engaging importers who reduced the prices but remained with a reasonable profit. “This was done in an agreement which is not the same case in others countries. We also decided to cut down taxes on fuel by Frw50 per litre and we intend to introduce another cut of Frw50 per litre by January next year,” said Makuza. He added that; “We also intend to construct fuel reserves that have a capacity of storing 80 million litres; but if we compare ourselves with other countries in the region, we are performing better than all neighbouring countries.” Meanwhile, a general overview of the Premier’s presentation to Parliament indicates that production of various foodstuffs has gone up from three million metric tons in 2006 to 5.6million metric tons in 2010 which constitutes an 87 percent increase. Makuza’s presentation left the entire parliament satisfied. However, lawmakers requested the government to fast track the implementation of policies in pipeline. According to the amended constitution, the premier is required to present quarterly reports to parliament on various matters of state. This was his second appearance before the house under a similar arrangement. Ends

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PM in Parliament to clarify on economy