Rwanda reaping benefits as EAC member - Rugwabiza

Rwanda’s Minister for East African Affairs, Amb. Valentine Rugwabiza, says the country is already reaping benefits of being part of the East African Community, seven years since becoming a member. She explained how, in an exclusive interview with The New Times Kenneth Agutamba. Excerpts. Since July 2007 when Rwanda joined the East African Community, would you say that we have been able to claim our fair share of the regional cake? I would say that in the past seven years, being part of the community has been beneficial to Rwanda by and large. Our trade has evolved with the other four partner states and by trade I don’t only mean imports and exports but also how the investments have evolved. It’s quite impressive to see that during the past few years since we joined the EAC, the investments coming from the region have consistently increased. In the past few years, businesses from Kenya have invested in Rwanda more than US$450 million which has contributed to the creation of thousands of jobs. Today, our top source of Foreign Direct Investment (FDI) is Kenya and this was not the case before we joined the EAC; even if you looked at it globally, Kenya remains our top source of investment. Of course, we see them mainly in the services sector; we all know KCB, Britam, Equity bank, Nakumatt, and soon we will have Uchumi. So the point I am making is that we have seen a clear difference happening because we have removed those barriers that used to impede our trade with East Africans. But barriers remain for Rwandans wishing to do business in the other partner states, why? On the side of Rwanda, we really believe in leading by example. So, we led the way by removing barriers to free movement of workers and services and that has been beneficial. If you look at our impressive progress regarding doing business, you will notice that we have done quite well on most of the indicators. But you will also notice that we have not made such impressive progress regarding trading across borders, and this doesn’t depend solely on us; it has to do with how long it takes to cross those borders, cost of transport and of course non tariff barriers. However, it’s all those factors that have informed our engagement in regional integration, helping us identify areas to focus our efforts to make it easier for our people, and it’s something we can only achieve by working together with our counterparts. You see, one faces challenges only if they are working and solutions are advanced along the way and we are doing just that. By removing barriers, Rwanda seems to have created a one-way traffic flow, investors from Kenya and elsewhere coming in but few Rwandan firms going out, why? Are we really suggesting that we are complaining about Kenyan investments coming to Rwanda? No, far from it; I am just wondering why Rwanda’s successful indigenous businesses are not branching out like their Kenyan or Ugandan peers? I wouldn’t look at it that way because Kenyan or Ugandan investments coming in is all to our advantage because this is a global competition for investment and all countries are trying to put in place the most attractive business environment in order to attract investments. So the investment flow into Rwanda shows that we indeed have what investors are looking for and countries like Kenya and others are taking advantage of their proximity to Rwanda. However, you have a point when you ask if we are seeing access in the different EAC countries for Rwandans that are interested in expanding. There are some challenges. But we have seen a surge in political will whose results in most cases are economic. There are issues which we learn about through regular engagements with members of our business community, then we negotiate with our partners and, honestly, it is a dynamic process. For instance, last time I had a business breakfast with our business community here, and that was when I heard for the first time that Rwandan truck transporters were being imposed a fine which was not imposed on the Tanzanian transporters. That informed my decision to reach out to my Tanzanian counterparts and we worked on that. In the past five years, we have been able to remove completely more than seventeen non tariff barriers. We still have a few remaining but we are not seated, we are working on that. But it appears non tariff barriers are becoming cancerous; remove two today another crops up tomorrow, isn’t it? True. Nonetheless, we have really made significant progress, though we are not yet there. We, therefore, do not intend to rest on our past achievements, because we know it is not enough. We also know that we are dealing with a dynamic situation where new non-tariff-barriers keep emerging with changing nature of trade. See, it is easy to remove road blocks and to spot regulations that are discriminating against certain countries, but it’s harder to spot standards that are not applied in an even manner to all businesses in the EAC countries. The nature of NTBs is evolving and increasingly becoming of regulatory nature. Amb. Valentine Rugwabiza Let us look at the plight of local manufacturers in the common market. Recently, our own Mount Meru Soyco was forced to cut its product prices by Rwf200 because of pressure from cheaper cooking oil products from the region, how can we help them cope? It’s interesting that you mention this example because I have been following this case closely and I know that one of the issues they’re confronted with has to do with insufficient raw materials, a factor that would have an impact on their cost of production. It is an issue that we are working on, and I know that there are efforts by the Ministry of Agriculture to try and increase their supply of raw material. In my view, this is not the kind of problem that can be solved by closing borders or imposing very high tariffs on incoming goods, which by the way, we are not allowed to do because we are part of the customs union. Let me add that competition is not a bad thing, because it allows the public to get the best quality products at the most affordable price. So, it is not bad to have competition as long as it’s fair and we are yet to be presented with evidence that there is a situation of unfair competition in EAC. One of the reasons for the creation of the Ministry of EAC affairs was to bring the integration process closer to East African citizens, would you say that Rwandans are familiar with this process? I can say that we have come from somewhere but not yet where we need to be in this regard, that’s why I consider that this is an area where we need to do much more and it is clearly one of our priorities in this ministry. It’s the reason why I spend a bit of time with the media and MPs because I do believe that those are key stakeholders in really bringing integration to the people and making them understand that integration is not a process that will be led exclusively by policymakers We must facilitate our people to embrace the regional integration process so that they can know the opportunities it provides in terms of education, services and so on. This is also the reason why I am spending time with the business community. In addition to that, we have to start moving faster to other freedoms not only the freedom of goods, but freedom of services as well. In the coming weeks, I am planning to engage professional associations in order to understand why our professional associations, for example, engineers, are yet to join a mutual recognition agreement in the EAC that would allow them take up some important tenders in the EAC countries. This is important because when we talk of free movement of goods, we are not as constrained as we are when it comes to services and through our engagements with a number of professional associations, we will hopefully get some solutions. For instance, a mutual recognition agreement for lawyers would enable cross border legal practice which would see our lawyers take up cases in Tanzania, for instance. Rwanda is implementing the single customs territory with Northern Corridor counterparts Kenya and Uganda, 40 per cent of Rwandan imports come through Mombasa but importers who use the port are unhappy with the facilities, is it too early to complain? Again, let me re-emphasise the achievements we have registered thus far; we are coming from a situation where there was no single customs territory to talk about, traders didn’t have an opportunity to easily clear goods at the first point of entry so they had to endure multiple checks and stops while in transit. This is no longer the case. Costs have been reduced too, which is pretty impressive. But, like I said, we still have a lot to improve. For instance, we are in discussions with our partners because traders have told us they would like to have their own space at the port of Mombasa which would ease clearance and goods safety. There are also challenges with the clearance system (Simba) used at Mombasa. Many breakdowns have been reported but as we speak, they are in the process of debunking the system. Things are improving. Travellers cross Kagitumba border. (File) The Northern Corridor integration projects; very ambitious and probably the most expensive undertaking by the partners, now that most of the feasibility studies are complete, are we confident that we shall raise the money needed to implement them? As you have pointed out, these are very ambitious projects and that’s why we have decided to mobilise resources together. At the current stage, the update is that the finance ministers in the three countries of Rwanda, Uganda and Kenya are planning to reach out to China, they are mobilising for the required resources. But we are also positioning these projects in such a way that they’re attractive investment avenues for the private sector and, for the first time, during the last summit, business representatives were present in the room. These are projects that require billions of dollars in funding and none of us (countries involved) can mobilise such amounts solely. Fortunately, the world is not short of money and I am certain that investors today are studying critically to know the best bet for their money. Let me also point out that, currently, growth is rather sluggish in Europe and investors are on the lookout for areas with faster growth and our region happens to be one of them; this factor can’t be ignored. For instance, recently a study was carried out about the fastest growing cities in which Kigali and Mombasa featured among the top cities with great potential; its those details that investors are looking out for. However, we don’t want to peg the success of our projects to external factors only so our governments too still have to mobilise domestic resources. You look around and notice young people from Uganda and Kenya all in Kigali working or seeking employment, are we seeing the same trend involving skilled Rwandans? That is what we would like to see. It would be impressive to make a stop at the bus station and see a large number of young Rwandans going to Uganda or Nairobi to seek employment but what we want to see most is that we are exporting skilled labour. The good news is that, recently, the EAC ministers for education harmonised the curriculum and education qualifications. Now we need to implement that in order to open opportunities for young skilled people seeking employment. editorial@newtimes.co.rw

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Rwanda reaping benefits as EAC member - Rugwabiza