Rwanda has made great strides in social and economic development over the past two decades. The country has climbed international rankings on governance, anti-corruption, gender, competitiveness and doing business. Over the past 5 years, GDP grew on average 7% per year and exports of goods and services increased their share of GDP from 11% to 17%.
As a land locked country, however, Rwanda faces economic challenges including a high trade deficit, high cost of transport and energy and a large population dependent on subsistence agriculture. To address these challenges, the Government of Rwanda’s vision 2020 sets out a strategy for inclusive growth by transforming Rwanda through increased trade, export diversification and deeper regional integration.
Strategy 2 Total Programme Budget Summary
Reducing Barriers to Trade
Enhancing Private Sector Markets for Trade
Total Budget US $63 Million
TMEA in Rwanda
TMEA programme is well aligned with Vision 2020, with a mission to create prosperity through trade. We funded 29 projects for a programme value of USD 65 million in Strategy 1. Some highlights of the key projects are outlined below.
Table: Highlights of key projects and impact in Rwanda – 2010 to 2017
|THEMATIC AREA||DETAILS||EXPECTED RESULTS BY 2017||RESULTS TO DATE|
|Increased Physical Access to Markets||Kagitumba-Mirama Hills OSBP||30% reduction in time taken to cross the border||Kagitumba OSBP completed and operational. 25% reduction in border clearance time achieved as at March 2016|
|Trade and Logistics Hub||Reduction in truck turn-around time from 3 to 1 day||25 year concession agreement signed between Ministry of Trade and Industry (MINICOM) and Dubai Port World, for the Kigali Logistics Platform. An investment of around $40 million has been catalysed for the facility|
|Rwanda Electronic Single Window||Reduction in time to clear goods||• Reduction in time taken to clear goods from 11 days in 2011 to less than 1 day 10 hours in 2015. Cost of clearing and obtaining exemptions reduced from RwF 30,000 to RwF 4,000 generating $15M/annual savings for businesses
• 64 % reduction in export release time from 2 days 19 hours to 1 day and 10 hours
|Rwanda Standards Board||Reduction in time to test export products||Testing time reduced from 60 days to 8 days, testing cost reduced from US$ 500 to US$250 per test|
|Giving a voice to the Private Sector||No. of advocacy initiatives that led to policy changes||• Removal of a road levy on Rwandan Trucks in Tanzania leading to $800,000/annual savings.
• Delays eliminated for VAT reimbursements for coffee exporters
|Company Export Capacity enhancement||Increased export turnover by $5 million/year||Training support to 50 companies on market linkages and food safety|
|Cross-Border Trade (CBT) with DRC, particularly women||Increase CBT trade, particularly women traders||• Increase in trade volumes $70,000 for 9 women co-operatives. Members personal income increased from approx. RwF 25,000 per month to RwF 55,000
• Feasibility study of cross-border market completed
Continuity and Innovation in TMEA Strategy 2:
Rwanda faces structural economic challenges, which inhibit competitiveness and export capability. To address this challenge, Rwanda is expected to improve production in agribusiness; tap into export markets, and support reduction in the prices of goods by an overall growth in trade. There is an opportunity to shift from a low-income, agrarian society to a knowledge- based, service-oriented economy with a well-developed manufacturing sector.
In Strategy 2, TMEA will continue its support to the public sector through reforms focusing on adoption of efficient procedures and systems. It will continue work with business and upscale its transformational work with women. Infrastructure development will also continue to improve Rwanda’s connectivity with its key trading partners in East Africa and beyond.
$ 1.2B net added to total trade
(2.4% increase above trend)
Exports from EAC to the rest of the world
$ 0.4B net added to exports
(4.3% increase above trend)
Intra EAC exports (US$ billion)
$ 0.4B net added to exports
(4.3% increase above trend)
Table: Highlights of TMEA Rwanda Programmes 2017-2023
|THEMATIC AREA||PROGRAMME COMPONENT||DETAILS EXPECTED RESULTS BY 2023|
|OUTCOME 1: REDUCING BARRIERS TO TRADE||Average time to transport goods along key routes and nodes in the EATN||Cross-border Market in Rusizi, OSBP in Cyanika, Harbour facilities to enhance trade on Lake Kivu Trade||Reduction in average time to transport goods along key routes and nodes in the EATN; Reduction in transport costs along key routes and nodes in the EATN|
|Improved trading standards and reduced non-tariff barriers||Quality and standards, Sanitary and PhytoSanitary (SPS) measures, Elimination of NTBs||Number of high priority NTBs removed as a proportion of high priority NTBs; Proportion of high priority standards mutually recognized, adopted, and implemented; Reduction in standards testing times in targeted countries|
|Improved and more transparent trade processes and systems||Trade Community Information Systems (TCIS), Trade Single Windows & Management Information Systems, Customs Efficiency Enhancements||Reduction in cargo clearance times; Reduction in average process time for key non customs trade processes; Increased predictability in cargo clearance and transit time; Improved perception of traders and logistics operators of the transparency of trading processes and systems;|
|Improved regulatory environment for trade||Regional trade integration – policy support, Trade Policy Support||Improvement in partner states’ legislative alignment with EAC commitments; Proportion of high priority regional commitments implemented; Number of national and regional policies implemented and agreements reached that facilitate trade or create access to markets outside the EAC|
|OUTCOME 2: ENHANCING PRIVATE SECTOR MARKETS FOR TRADE||Better private sector-led advocacy for trade||public-private dialogue, sector specific advocacy, cross-cutting themes, institutional capacity development||Number of policies implemented as a result of private sector led advocacy on high priority trade issues|
|Increased efficiency in private sector logistic service||Development and operationalization of logistics hub pilot and local transports,wholesale market in Kigali, capacity development for logistics sector, logistics for cross-border trade||Increased uptake of (TMEA targeted) third party logistics service provision; Increase in the number of innovative logistics solutions provided on the market|
|Increased export capacity of Rwanda businesses||Export growth for export ready businesses, market system upgrading along growth hubs and high potential sectors, market systems support to increase availability of ICT, standards and exports advisers||Increase in export revenue at firm level on TMEA supported interventions; Increase in investment in targeted areas and sectors; Stronger linkages developed between firms and suppliers across the priority sectors|
|Greater inclusion of women and small businesses in trade||Creating a gender responsive trading environment, capacity building, ICT and Innovation||Increased value of trade by women traders and small businesses; Increased number of women and small businesses trading; Improved opportunities to engage in trade for women and small businesses|