Government, exporters pledge to revitalise exports
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The Government and exporters have committed to build a strong partnership in a bid to widen exports base.
The pledge was made, yesterday, during the second National Exporters Conference to promote exports and exporters, in Kigali.
The meeting was organised by the Ministry of Trade, Industry and EAC Affairs (MINEACOM) in collaboration with the Private Sector Federation (PSF).
Under the second Economic Development and Poverty Reduction Strategy (EDPRS II), the government targets to grow exports by 28 per cent.
But achieving the goal has been threatened by the decline in exports since 2014 mainly due to the falling of prices on international markets resulting in some companies reducing the amount of exports, said the Minister for Trade, Industry and EAC Affairs, François Kanimba.
From 2010 to 2013, the minister said, Rwanda’s exports were growing at a rate of 20 per cent that there was hope to attain the 28 per cent target by 2018.
But Rwanda’s export sector registered a slow growth of 1 per cent in 2015. This year, Kanimba said, exports went up by 10 per cent, explaining that even that growth was registered through re-exports.
“Rwanda’s products, such as minerals, coffee and tea, did not perform well as prices on the international market went down,” he said, noting that focus will be on value-addition to maximise benefits.
During the conference, 19 export companies in various areas such as textiles, mining, tea and coffee signed a memorandum of understanding with MINEACOM on targets the companies need to achieve in line with stimulating exports.
“We have hope that we will achieve the targets and make improvements where necessary,” said Félicien Mutalikanwa, chairperson of Rwanda Association of Manufacturers.
Kanimba said there were officials at institutions in charge of promoting exports who would monitor the implementation of the agreement for better results.
Tapping into Exports Growth Fund
The Exports Growth Fund (EGF) has so far got about Rwf10 billion, according to Dr Livingston Byamungu, the chief investment officer at Development Bank of Rwanda (BRD).
BRD is the manager of the Fund, which also works with other banks on the facility project so as to benefit more business people.
The facility has three interventions in line with promoting exports, including interest subsidy whereby it covers 6.5 per cent of the interest required by a given bank on a given loan.
Before the move, businesses would get loans at interest rates ranging from 17 per cent to 19 per cent, and 16 per cent in the case of BRD.
The second intervention is a matching grant that goes up to $100,000 (about Rwf82 million). This, according to Byamungu, is intended to help exporters penetrate the market through products marketing and addressing difficulties to finding market for their products.
The third support is the guarantee facility whereby EGF will guarantee the bank to give the beneficiary exporter between 65 and 70 per cent of their goods’ worth as they wait for the payment of their goods.
This facility covers pre-shipment and post-shipment and is aimed at enabling exporters carry on their business even when they have not yet been paid for their goods.
Kanimba noted that this guarantee covers a period of nine months, adding that the Government was ready to channel more money into the Fund as there was a lot of interest from development partners.
However, he expressed disappointment with the performance of the Fund because it had low demand, noting that business people should take advantage of the opportunities it brings to boost the country’s exports.
Sina Gerald, the proprietor of Entreprise Urwibutso, that processes agricultural produce, said EGF was a big boost to growing exports.
“Having an interest rate subsidy, the grant to ease market access and covering between 65 per cent and 70 per cent of the shipment cost for us to continue business is a great support. Before, we had been struggling to cover all the costs,” Gerald said.