COMESA boosts SMEs to foster local sourcing by corporate firms
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Jean de Dieu Nsengimana, a model horticulture farmer in Kirehe District, Western Province has for the past two years been trying to supply vegetables to some of the top supermarkets and hotels to no avail. Nsengimana says his attempts are often turned down with claims that his vegetables are poor quality, and not in large quantities.
He, however, says his vegetables meet all the requirements these firms gave him on his first attempt. He notes that most big supermarkets prefer sourcing goods and produce from their country of origin even when they are readily available locally and in huge quantities.
Nsengimana is one of the many local producers that are finding it hard to supply produce to some of the top brands operating in the country, including telecoms, airlines, supermarkets and hotels.
However, woes of farmers like Nsengimana and local industries may soon become history, thanks to a new COMESA Business Council project that seeks to link local producers with buyers across the country and the region.
The Common Market for Eastern and Southern Africa (COMESA) Business Council local sourcing for partnerships project seeks to re-energise Rwandan corporate markets by encouraging them to buy most of their supplies locally. The project is supported by the Investment Climate Facility for Africa (ICF), USAID-IPAA in collaboration with the public and private sector and Ministry of Trade and Industry.
It is expected to be piloted and implemented in six countries, including Rwanda, Zambia, Uganda, Kenya, Ethiopia and Malawi, before it is rolled out to all COMESA member states. The project mainly focuses on suppliers of fruits and vegetables, dairy and dairy products, apiculture and cassava, among others.
It also involves training SMEs on the Hazard Analysis and Critical Points (HACCP) and the Global Food Safety Initiative (GFSI) management system to improve product quality. Under the project, successful local suppliers will be linked with companies that will buy their produce and in the process increase their share of local sourcing.
Emmanuel Hategeka, the Ministry of Trade and Industry permanent secretary, said the project is timely and will help address the core market gaps between producers and local buyers. “It also provides a critical solution towards improving competitiveness, quality control and consistency of supply of our products to regional and international markets,” he said.
Hategeka is confident Rwanda’s producers in different sectors will benefit from the project, thanks to the training on standards and food safety requirements for enterprises and private sector commitment to support the initiative.
Potential buyers are expected to come from the food and beverages industry, hospitality industry and the retail outlets, such as supermarket chains.
The idea according to COMESA Business Council chief executive officer Sandra Uwera is to help enterprises upgrade their operations to meet the demands of today’s urban African consumers.
“We want to build the capacity of local suppliers, while integrating them into supply chains of larger industries in the region,” she said.
Uwera said local sourcing within the COMESA region remains ‘critically’ low, calling for structural mechanisms that encourage consumption of home-grown products within the COMESA bloc.
Companies often source outside the region due to various reasons, including quality issues and consistency in supply, as well as timely delivery and high cost.
There is also the challenge of limited and credible information from local suppliers, which affects partnership confidence between buyers and suppliers, according to Uwera.
She said the training will help address core challenges faced by enterprises, including the failure of SMEs to meet the international standards, low production capacity, and limited information on local suppliers.
Commenting on the project, Dr Mark Cyubairo Bagabe, the Rwanda Standards Board (RSB) director general, said standards are imperative if local producers are to have a competitive advantage over others.
Private sector welcomes the initiative
Stephen Ruzibiza, the Private Sector Federation (PSF) chief executive officer, said the project will be essential in helping SMEs to create steady and sustainable markets.
“We are talking about SMEs having the capacity to supply and meet the market demand, but also being able to ensure quality and standards along value chain of production,” Ruzibiza noted. Building inclusive growth of SMEs in business processes will help create more jobs and boost SMEs contribution to intra-trade in COMESA, he added.
Wilhelmine Bora, the chairperson of Professional Horticulture Farmers Association in Rwanda, said the project will boost the morale of SMEs and hence increased productivity.
Dr Livingstone Byamungu, the Linking Farmers to Markets (LIFAM) national co-ordinator, said the project gives producers an avenue to improve the operations and become more competitive.
Other initiatives to boost Made in Rwanda goods
In 2014, government launched a campaign to encourage consumption of locally-produced goods. The idea, according to Francois Kanimba, the Minister for Trade and Industry, was to support the country’s SME sector to increase its contribution to the national economy.
In addition, efforts to establish bar-coding for Rwanda’s products by the Ministry of Trade and Industry and the International Trade Centre (ICT) are ongoing. Bar-coding is one of the best practices, and barcodes are used to encode products, serial and batch numbers. Such initiative could play a key role in supply chains and enable retailers and manufacturers to penetrate local and regional markets.
The SME industry constitutes over 98 per cent of Rwanda’s total businesses, making it important to link the sector with buyers to help them grow and become competitive in the region.