NAEB's new mandate a game changer for agro exports sector

The restructuring of National Agricultural Export Development Board (NAEB) mandate to include support and facilitation of investors in the agricultural sector means that NAEB will be a wholly-owned state enterprise with powers to provide export development services to the private sector, as well as undertake investments to boost agro export revenues, according to Amb George Kayonga, the chief executive officer. Kayonga told Business Times that the development is a response to calls by investors for a responsive, reliable, and cost-effective structures and infrastructure for Rwanda to attract investments into the agriculture sector, as well as produce competitively for the international market. The restructuring of NAEB responsibilities, which expanded its mandate to include responsibilities of supporting and facilitating agricultural private operators, was approved by the Cabinet on January 18, 2016. The organisation has hitherto been mainly responsible for promoting and facilitating agro-exports, as well as carrying out capacity building across the sector to ensure quality produce and increase volumes. The new mandate could therefore increase export-focused production in the sector. “This gives NAEB the power to provide private sector-oriented (development) services. We will be able to invest in the required soft and hard infrastructure that supports our production, post-harvest and export logistics processes that will guarantee the quality of agricultural exports,” Kayonga explained in an online interview last week. “We also envisage joint ventures in areas, where initial capital investments are necessary to de-risk the sector and grow the necessary skills, among others, to attract private sector.” Stakeholders say the development will play a central role in attracting more agro export-oriented investors. Government has over the past years been trying to lure the private sector to invest in agriculture to spur the sector’s exports. The Gishari Flower Park project in Rwamagana District that was started by NAEB with the aim of interesting private investors is yet to start export of cut rose years after it was launched. There are other horticulture projects, including vegetable and fruit production, that are yet to kick off, which is why private involvement is key, and NAEB’s new mandate could help attract investors under the public-private partnership model. According to Vainney Kabera, the managing director of Freshpak, exporters and distributors of fresh products, the development is a key milestone towards growing the country’s agro exports. Rwanda targets to increase exports by 28 per cent per year in the medium-term under the second Economic Development and Poverty Reduction Strategy (EDPRS II). Wilhelmine Bora, the chairperson of Professional Horticulture Farmers Association in Rwanda, said NAEB could now be able to facilitate right partnerships between exporters and buyers, besides promoting value addition to boost the competitiveness of local agricultural produce in global markets. For Patrick Nzasingizimana, an exporter, the move will promote more partnerships between the public and private sectors which will translate into increased agro productivity. “It is through partnerships that we will be able to expand the exports base and increase revenue from agricultural produce,” Nzasingizimana said. Meanwhile, NAEB has already drafted a five-year strategic plan that will guide production along the value chain, as well as value-addition processes, according to Kayonga. Under the strategy, NAEB target an average annual growth rate of 24 per cent in tea exports worth $94.9 million per annum by 2018, while coffee exports are expected to grow by 29 per cent annually, increasing to $ 104.3 million by 2018, from $60.9 million in 2013. Earnings from the horticulture sector are tipped to increase to $129.6 million by 2018 from $10.7 million in 2013. Therefore, with the new mandate to invest in soft and hard infrastructure that supports production, exporters could get easy access to farm inputs and credit to help realise these ambitious targets. Rwanda recorded a 0.3 per cent trade deficit over the third quarter of last year, spending $481.1 million (Rwf370.4 billion) on imports compared to $96.14million (Rwf74 billion) from exports. Overall, total exports decreased by 26.07 per cent during the period. Government increased support to the private sector over the past two years to enable them increase production. It has signed contracts with exporters, started initiatives to enhance the capacity of small-and-medium enterprises (SMEs), and has been working to ensure that producers have access to affordable credit. business@newtimes.co.rw

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NAEB's new mandate a game changer for agro exports sector