Restrict non-essential imports to boost forex reserves - expert

There is need for an aggressive export promotion strategy coupled with restrictions on non-essential imports to help improve Rwanda’s foreign exchange reserves and bolster the local currency. Robert Mathu, the Capital Market Authority executive director, said importation of items, like toothpicks and bleaching jellies, should be discouraged. He argued that such imports drain the country’s foreign exchange reserves but do not help improve the lives of Rwandans. Mathu was reacting to a question on the role of the stock exchange in stabilisation of the local forex market during a one–day training of capital market reporters in Kigali on Monday. The training, which attracted over 30 business and economy journalists, was organised by CMA and the Media High Council. Mathu, however, explained the issue is of a global nature, noting that most countries across the world are affected. He attributed the problem partly to drop in commodity prices on the global market, particularly in China. He said supporting an import substitution programme could also help grow forex reserves, besides reducing spending of hard currency on goods that are produced in the country. He said the Made-in-Rwanda initiative is one of the key interventions that will help reverse the trend. There has been scarcity of hard currency, especially US dollars, on the local market for the past few weeks which prompted the National Bank of Rwanda (BNR) to intervene twice on the supply side to increase dollars on the market last week alone. Chantal Kasangwa, the BNR director general for operations, attributed the scarcity to the current dollar demand driven by an increase in economic activity. Commercial banks and forex bureaus quoted dollar at an average of 795/805, selling and buying yesterday. Meanwhile, stock market reporters have been challenged to improve their skills through personal learning, and participation in the industry’s activities. Mathu said it is only then that reporters will be able to understand the sector, and disseminate right information, particularly on the benefits of investing in firms listed on the capital market. “Journalists need to understand the capital market and how it operates to be able to write and distribute right information about it,” he observed. Commenting on the training, Media High Council (MHC) executive secretary Peacemaker Mbungiramihigo said capacity building is essential in shaping media practitioners’ understanding of issues at hand, besides helping them develop their reporting skills on the financial sector, generally. Dr Margaret Jjuuko, a University of Rwanda journalism lecturer and researcher, called for more training for beat reporters, saying most are not grounded in capital markets, challenging journalists to read more about the industry from established markets. Bonavanture Habimana, a radio journalist in Kigali, said the training will help him report on capital markets from an informed position.

News

Restrict non-essential imports to boost forex reserves - expert