Rwanda launched a campaign to promote consumption of locally-made products over a year ago. The Made-in-Rwanda campaign also focuses on improving product quality, especially among small-and-medium enterprises (SMEs), to spur export volumes and receipts. The SME sector makes up over 98 per cent of the total businesses in Rwanda, making it a significant player in the economy.
However, according to trade experts, poor packaging, branding and lack of competitive marketing strategies, could cripple the sector’s contribution to national economy if not addressed.
According to the experts, there is need to boost institutional capacity building and innovation to enhance the sector’s competitiveness and sustainability.
The experts were speaking during a training workshop on how to strengthen SMEs to compete in regional and global markets.
The workshop brought together more than 100 market players, policy makers and development partners.
Oabona Kgengwenyane, the managing director of Innolead Consulting firm based in Botswana, said, lack of branding, packaging and marketing skills have continued to hurt small and medium businesses, affecting their profit margins and service delivery.
“The challenges have curtailed their potential to become key players in the global market. So how can the local SME industry overcome the challenges that are constraining it from realising its full potential,” Kgengwenyane, told Business Times adding that entrepreneurs ought to invest in packaging to become profitable.
Kgengwenyane added that if SMEs desist from dependence on government tenders for provision of goods and services, and become more innovative, they could move to the next level where they will be able to enter new markets.
The expert argues that Africa and Rwandan businesses, in particular, suffer from the ‘mentality of scarcity’ and narrow thinking, which cripple their creativity.
Alex Ruzibukira, the Director General for industries and SME development at the Ministry of Trade and Industry, said most entrepreneurs are not taking the concept of packaging and branding seriously, which affects capacity to grow.
Ruzibukira, said poor branding and packaging have hampered the marketability of locally-made goods “This has affected the competitiveness of local products in the local and regional markets thus the need for SMEs and industrialists to embrace quality and value addition along value chain for easy marketing.”
Despite calls on government to lift the ban on polythene bags by some sections of the private sector, Ruzibukira says the harmful plastic bags will not be allowed into the country.
Rwanda banned use of non-degradable plastic bags in 2008 to safeguard the environment and agriculture production.
SME operators say they import most packaging materials they use from the region or in the United Arab Emirates, which they say is increasing the cost of production and making them less competitive.
Plans to establish marketing companies revealed
Meanwhile, Ruzibukira revealed that government is planning to construct a factory to produce packaging material to help address the problem.
“Equally, we have plans of establishing a media company that will help in marketing Rwanda’s products, regionally and globally,” he said.
The two firms will be operating from the Kigali Special Economic Zone, Ruzibukira added.
Private sector speaks out
Meanwhile, Diogene Ngendahayo, the quality control and production manager at Sosoma Industries in Kicukiro District, said product packaging is an essential ingredient towards boosting market penetration of Made in Rwanda products.
“Packaging is an additional value. Therefore, SMEs should strive to brand and package their goods in an appealing way.”
According to Ngendahayo, investing in packaging will help trigger the demand of locally made products and increase productivity of SMEs.
Donatien Mungu’arareba, the Private Sector Federation Director for advocacy and labour relations, called for continuous sensitisation of SMEs on the role of product packaging and branding.
He urged SMEs to avoid the old mentality, where businesses never minded about issues like product packaging.
Egide Birinda, the Managing director of Harvest Media Consult, said most SMEs do not understand the importance of packaging and ignore the role of media advertising.