The Government has stepped up efforts to link local traders to regional markets to boost exports.
Amb. Valentine Rugwabiza, the minister for East African Community affairs, said government seeks to facilitate traders to get a fair market share of the growing trade in the region.
This, according to the minister, would be achieved through facilitating easy access of traders to the sea ports and ensuring more traders are linked to the regional markets to allow them to optimise on the increasing regional trade and contribute to a more sustained economic growth.
“Reducing the time and costs to exporters and importers is not only of paramount importance to Rwanda’s increased regional integration and trade facilitation, but also critical for a more sustained economic growth,” Rugwabiza said.
The minister was speaking during the fifth breakfast meeting between the Ministry of East African Community Affairs and the private sector in Kigali yesterday.
Currently, government is working with its partners in the region to further reduce the cost of doing business and ensure all non-tariff barriers (NTBs) are eliminated.
This is necessary to balance the country’s external trade books.
For example, Rwanda recorded a 0.3 per cent trade deficit over the third quarter of last year, spending $481.1 million (about Rwf370 billion) on imports compared to $96.14 million (about Rwf74 billion) earned from exports.
Overall, total exports decreased by 26.07 per cent during the period.
In this regard, linking more traders to regional markets makes sense as it would help boost the country’s exports and narrow the trade deficit gap.
Amb. Rugwabiza called on the the private sector to seize the opportunity to increase trade linkages.
Rwanda’s trade with other EAC partner states is still low, the minister added.
Amb. Rugwabiza reaffirmed government commitment to linking the Rwandan private sector with the rest of the region’s private sector to create and promote strong business partnerships.
Rwanda exported goods worth $19.65 million to EAC partner states in the third quarter of 2015, with Kenya being the major market destination at only $16 million.
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Jack Kayonga, the Crystal Ventures chair, said partner states must expedite the implementation of Common Market Protocol to facilitate local firms to export more to the regional markets.
“We are trying to find out the market appetite for our products within the region; however, to consolidate the market in 2016, we need to have the Common Market Protocol implemented by all member states,” he said.
Benjamin Gasamagera, the chairperson of Private Sector Federation, urged governments to do more to eliminate the remaining trade barriers and promote fair trade in the region.
The cost of transport in the region is still high and must be reduced to make regional trade more competitive and profitable.
For example, it still costs a Rwandan trader, on average, $4,990 to import a 20ft container through the Central Corridor, higher than the rest of sub-Saharan Africa, which costs only $2,504.
Compared to other landlocked countries from other regional economic blocs such as COMESA and SADC, EAC landlocked states are still behind in trading across borders.
Gasamagera said Rwandan traders still face challenges, including delays in issauance of work permits, especially for those at Port of Dar es Salaam, Tanzania.
Meanwhile, Innocent Safari, the permanent secretary at the Ministry of East African Community Affairs, said Police check-points on the Central Corridor (Rwandan side) have decreased significantly to only four (Rugende, Rwamagana, Kabarondo and Nyakarambi) and efforts to have them reduced further are ongoing.
He said partner states have put in place National Monitoring Committees to facilitate reporting and monitoring of the non-tariff barriers.
So far, more than 95 non-tariff barriers have been reported as eliminated, 22 unresolved and only one was reported along the Northern Corridor.
Safari said bilateral talks are going on to get Rusumo border post operational before the end of the first quarter of 2016.
“All infrastructure is in place including water and electricity on the Tanzanian side and we will have the border post operational very soon,” he added.