Automation of key trade processes, reduction of non-tariff barriers, improved standards testing and border infrastructure upgrades spur trade in Rwanda
- US $65 million invested in the six year programme that kicked off in 2010
- Interventions have contributed to reducing the cost of transporting containers from Mombasa to Kigali from $6500 in 2011 to $4800 in 2016 saving the country approximately $7 million
- Interventions have had a net return of $100Million.
- Rwanda ranking in trading across borders improved 44 places (from 131 to 87) contributed mostly by investments made by TMEA that have reduced time it takes to export and import and exit borders.
Kigali, November 21, 2016: The cost and time of doing business in Rwanda has reduced significantly as a result of elimination of Non-Tariff Barriers (NTB’s), automation of key trading processes, improvement in standards testing and capacity building to build export capability, says a TradeMark East Africa (TMEA) 2016 Independent Evaluation report.
The report by consulting firm MarketShare says the organisation is on track to achieve its target of reducing by 15% the time it takes to transit a cargo container through East Africa’s main transport corridors. TMEA made the announcement while launching the report in Kigali in the presence of Minister of Finance and Economic Planning, Hon. Ambassador Claver Gatete.
The interventions funded by TMEA between 2010 and 2016 at a cost of $65 million and implemented in partnership with the Government of Rwanda (GOR) have contributed to a reduction in cost for transporting containers from Mombasa to Kigali from $6500 in 2011 to $4800 in 2016 saving the country approximately $7 million. A return on investment assessment (ROI) indicates that, the impacts of four key projects result in a total net return of $100 million (28%).
Rwanda has made great strides in social and economic development over the past two decades. The country’s international rankings on governance, corruption, gender, competitiveness and doing business has improved. Over the past 5 years, GDP grew on average 7 percent per year and exports of goods and services increased their share of GDP from 11% to 17%. Further, Rwanda ranking in the trading across borders indicator by the World Bank Ease of Doing Business Report, improved by 44 places from last year’s position of 131 to position 87 now. This indicator is measured via time it takes to export and import as related to border and documentary compliance. TMEA investments in infrastructure at the country entry points and automation of key trading agencies have greatly contributed to this improvement. For example at Kagitumba; border clearance time has reduced by 25%.
Rwanda’s trade environment has been enhanced through some of TMEA’s key support programmes to the GOR focusing among others on improving national and regional trade policies and advocating for the removal of non-tariff barriers in the EAC. One of the key successes of this collaboration with the GOR is the resultant reduction in road tolls of Rwanda trucks entering Tanzania from $500 in 2014 to the current $152. Estimates show this has saved the country businesses approx. $800,000 per annum. Following interventions, which included modernization of the laboratories and training of key staff, the Rwanda Standards Board has reduced cost of testing products from $500 to $250 with testing time reducing from 60 days to only 7 days. Rwanda Electronic Single Window (ReSW) system, reduced the average time to clear goods through customs from 11 days in 2012 to 1 day 10 hours. Export time reduced from about 2 days 19 hours in 2012 to about a 70 per cent reduction.
Through support to Profemmes-Twese Hamwe, over 3,000 women through the support offered to 25 cooperatives have secured $100,000 in loans enabling them to expand their businesses. Further Profemmes participants have increased their incomes.
While speaking at the launch Hon. Ambassador Claver Gatete noted, “The government of Rwanda is indeed pleased TradeMark East Africa contribution towards improving the ease of doing business in Rwanda. We especially acknowledge TMEA for its flexibility and willingness to listen to us and adopt our priorities as its priorities. We note the investments at Kagitumba/Mirama Hills One Stop Border Post and the linking Ntungamo Road which TMEA is aiding our neighbour Uganda to build. Once the road is completed, it will open up the Kagitumba, Mirama, Ntungamo route, which as you know is more convenient for cargo transporters going to Kampala. The government is committed to collaborating with TMEA and the private sector players as we retain our commitment of cost of doing business reduces in order to boost competitiveness of Rwandan products, attract investment, create more jobs and secure futures.”
TradeMark East Africa, CEO, Frank Matsaert said, “These results demonstrate our commitment to reducing the cost and time it takes to do business in Rwanda so as to open up Rwanda to more investments that will generate more jobs and increase government revenue. We are committed to building partnerships with both the government and private sector to scale up some of the best practices to the next phase, where our main aim will be creating jobs and securing livelihoods.”
Patience Mutesi Rwanda Country Director, said, “TMEA is committed to ensuring that the gains of Phase 1 are long term and cemented during phase 2. We are already building strategic partnerships with investors and the government. This will bring to life various exciting interventions like entrenching standards work to reach more SME’s so Rwanda goods meet international standards and thus access markets; supporting a Cross-border Market in Rusizi, enhancing transport on Lake Kivu to facilitate cross border trade and other infrastructural development along the borders as will be agreed with the government.”
Other key stakeholders present during the launch of the evaluation report include TMEA board members led by East African businessman and TMEA board Chair Ali Mufuruki.
TradeMark East Africa (TMEA) is an aid-for-trade organisation that was established with the aim of growing prosperity in East Africa through increased trade. TradeMark East Africa (TMEA) operates on a not-for-profit basis and is funded by the development agencies of the following countries: Belgium, Canada, Denmark, Finland, the Netherlands, UK, and USA. TradeMark East Africa (TMEA) works closely with East African Community (EAC) institutions, national governments, the private sector and civil society organisations.