Trademark East Africa plays cupid between Rwandan firms and Ugandan markets

June 26, 2014

Trademark East Africa plays cupid between Rwandan firms and Ugandan markets

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It’s the same formula that dating agencies use: bring suitors in search of partners together with partners thinking about suitors.

Contrive series of intensive get-togethers and exchanges of information. Sprinkle lightly with expectation and good wishes. Stand back and wait to see what happens.

But in this version of the story the suitors are Rwandan companies looking for markets in Uganda. And the Matchmaker is the Rwandan Development Board (RDB) with help from TradeMark East Africa (TMEA) and the Irish government NGO Traidlinks.

Rwanda imports three times as much as it exports. Its private sector, government and backers fear that the country might get economically swamped by the more modernized Partner States like Kenya when all tariff barriers eventually come down in the creation of an economically integrated zone.

“Imports don’t make us rich! We have to look at new products and new markets. We need to diversify. We need to look beyond traditional markets. And most of all, we need to think differently,” says Kaliza Karuetwa, Director-General of Trade at the Rwandan Ministry of Commerce.

The RDB, Traidlinks and TradeMark East Africa (TMEA) all wanted to help Rwandan companies think differently and put together an intensive programme for a small group of Rwandan CEOs or top management officials to go to Kampala to try to find customers.

Why Uganda? Why not a less economically daunting prospect than its oil-rich neighbour? Why not Burundi, or the Democratic Republic of Congo?

“We already do sell to both countries but it’s more re-sale of imports than selling stuff that is made in Rwanda. We wanted to tackle Uganda first of all because if we can sell into Uganda, then we can sell anywhere, and that includes Kenya,” says Karuetwa.

Before the delegation went to Kampala first there was an intensive week of grooming in Kigali. There were presentation workshops, discussions, briefings and preparations. In Kampala the programme’s backers did basic market research to identify customers and put together appointment schedules for the nine or ten Rwandan companies taking part.

What followed next was the commercial equivalent of speed dating. “We went around meeting people and talking business. It was extremely busy, exhausting even, but very encouraging. We are following up the contacts now and I can see us getting a lot more business from the trip,” said David Rusirare, of the steel foundry Chillington.

Like many participants – and they ranged from Chillington to cosmetics manufacturers, drinks companies and macadamia nut producers – Rusirare saw that there was potential to sell to their richer neighbour Uganda, but that pricing, packaging and marketing were key.

“It was a learning experience,” says TradeMark East Africa (TMEA) trade consultant Andrew Thorburn. “A whole range of issues have to be addressed from putting on bar codes to packaging, pricing and delivery. But it was encouraging. Feedback from Uganda shows very strong demand – we just need to get the marketing issues right.”

There were learning points from the trip. Chillington’s Rusirare has developed a tough, heavy-duty wheelbarrow to use in the construction boom reshaping East Africa.

“But we realized after the trip that it’s expensive, and it’s ugly. We need to buy a press to make it look more modern but we know there is potential there. There is huge potential, but Chillington needs to get its marketing act together.”

The mathematical challenges are significant but not unbeatable, says Andrew Thorburn. Out of 123,000 registered companies, only 13,000 are big enough to pay any VAT. Energy costs are three times higher than its neighbours and transport costs are also high.

But Rwanda’s Bureau of Standards (RBS) has a regionally sound reputation, so bottled water and other goods with the RBS sign of approval carry automatic appeal on the shelves in Uganda’s shops and kiosks, and are already doing well.

“The RBS stamp gets a lot of respect in this region,” says Kaliza Karuetwa, Director-General of Trade at the Rwandan Ministry of Commerce. Her thinking is that a reputation for quality will help increase the quantity of Rwandan goods crossing the border, first into Uganda and then into other areas of the EAC and Africa in general.

She was part of a delegation that took Rwanda’s produce to Congo (Brazzaville). It included Banana wine. “We were blown away. It was such a hit. Our honey too was a big hit and we have been exporting to Brazzaville ever since.”

But the EA Partner States, she acknowledges, will be harder to crack. “We are net importers from Kenya and Uganda, which is why we welcome this move to help us put Rwandan producers together with Ugandan buyers..” It’s a nearby market with similar people and a very close centre in Kabale – we are closer to Kabale than Kampala is.

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