The Ministry of Trade and Industry and East African Community Affairs, last week, announced a Made-in-Rwanda policy as it continues its efforts to strengthen the initiative.
According to the ministry, the policy seeks to address key challenges manufacturers face, including low quality, pricing, high cost of production and access to markets. It’s also expected to strengthen collaboration between the public and private sectors to spur industrial growth and economic transformation.
The policy is a welcome boost for local producers as they look to increase market share and consumption of local goods under the Made-in-Rwanda initiative. Interventions by the policy, like improving value chains of various sectors and widening the list of imported raw materials to be VAT exempt, are crucial as they reduce costs and help increase local production.
Manufacturers have long complained about levying VAT on some imported items that are used as raw materials to no avail, so this is a timely development. However, there is need for clear guidelines on how the various sector value chains will be developed to make the intervention all inclusive and more sustainable.
The industrial sector grew by 5.6 per cent last year, contributing 17 per cent to economic growth, and government is targeting to increase this to 20 per cent by 2020. However, this will need more investment in research and training because they are central to industrial growth and sustainability as they help improve production processes and product quality.
Challenges like power supply and quality and affordable packaging need to be addressed, but this will require more than developing a “centre of excellence” for packaging. Efforts to encourage Rwandans to consume local goods should also be strengthened.
In addition, industrialists must invest in local personnel to cut high costs involved in importing expats. Besides, initiatives like where government agencies will be required to prioritise local sourcing of goods and services when the review of the public procurement law is completed and approved, will benefit firms that promote quality.