By James Karuhanga Published : March 03, 2020
Employees of C&H Garments, a Chinese garment manufacturing firm that operates at the Kigali Special Economic Zone, sewing clothes recently. The Government is set to amend policies to foster collective investment schemes, especially in high value-added industries and service sectors. / Photo: File.
The Government plans to adjust policies to foster collective investment schemes, especially in high value-added industries and service sectors.
The plan is part of the resolutions of last month’s National Leadership Retreat.
The recent annual leaders’ retreat, the 17th of its kind, had 16 resolutions. Four of them, including the last, were private sector-specific.
Three others are to: develop a concrete plan to facilitate the strengthening of private sector skills, review mining sector strategies to improve diversification and value addition and support access to private equity funds as an alternative to loans.
Regarding resolution 16, the Director-General of Trade and Investment in the Ministry of Trade and Industry, Tony Kajangwe, said the government plans to continue working with various stakeholders to adjust relevant policies and put in place mechanisms to support the private sector to achieve this.
Among the proposals is to review policies related to the regulation of private equity funds and other joint management funds, with the support of institutions which will directly support in mobilizing and facilitating access to credit between foreign and domestic collective investment vehicles.
“The private sector has a significant role to play in setting up these schemes, and has already begun with tangible examples of collective investments in real estate, manufacturing and the construction sub-sectors,” he said.
Theoneste Ntagengerwa, the Private Sector Federation (PSF) Spokesperson, explained that the latter used to have collective investment schemes mainly focused on building houses for the market and there were few or limited such schemes focused on productive industries or processing or value addition to products.
Ntagengerwa said: “Our understanding now is that we have to focus on adding value. The challenge we used to have is that people engaged in Made in Rwanda used to do things as sole investors. Their capital was very limited and, in order to produce large and quality products, another related resolution was made [in the national leader’s retreat] on equity financing.”
Ntagengerwa explained that the PSF started in the garments industry and “brought all of them together” and formed a company – Apparel Manufacturing Group (AMG) so that they can leverage on the knowledge and capital they have so that they can boost production.
Members of AGM are mostly small and medium enterprises who were brought together under the same Company.
Mid last year, they signed a deal with one of China’s biggest textile companies, to start producing fabrics and finished clothes in Rwanda.
“With the recent resolution , and others [related to PSF], I hope we are going to see acceleration of what we are already doing.”
According to Ntagengerwa, to make things work especially in bringing the business community together, the PSF is collaborating with other entities supporting industry development in Rwanda, such as the Ministry of Trade and Industry as well as the National Industrial Research and Development Agency (NIRDA) “mainly because majority of those in collective investment schemes are members of PSF.”
By and large, the collective investment scheme business started with the RNIT Iterambere Fund; an open-ended balanced unit trust managed by a Rwanda National Investment Trust (RNIT), a licensed fund management company. The fund was launched in 2016.
The government has, since then, urged entrepreneurs to embrace collective investment schemes.
Previously, Ntagengerwa explained, the missing link was the orientation.
He said: “We mainly focused on bringing people together. Now we are focusing on value addition. People used to think they could go it alone in investment but most often they had money but lacked information on how they could partner with others who have money and make their investments more profitable.”
“What we are going to do is get information, gather people, try to connect or network in their respective sectors and also provide them with requisite information. We realized that people may be in the same area or sector and compete with each other but fail to improve their businesses because everyone is doing the same thing yet they could leverage their capacity and build a better value chain.”
The PSF, he stressed, aims to help business leaders network properly so that they can identify gaps and ably sort them out.
“We are now also, as PSF, trying to figure out how we can implement each of the resolutions that concern us. We need to have a specific roadmap for each PSF-specific resolution.”
This was discussed recently at management-level and they hope to have a clear roadmap “very soon” whereby everyone will know what they are supposed to do.
“The good thing is that there are some activities which we had already started before these resolutions.” Asked which activities exactly, he listed capacity building, which he said is ongoing “and will be enhanced, continuously.”