Following the reopening of the Rwanda-Uganda border, trade between the two countries is picking up. However, global shocks like the pandemic and the Russia-Ukraine crisis still hinder economic recovery. In an interview with The New Times’ journalist Edwin Musoni, the Minister for Trade and Industry, Jean-Chrysostome Ngabitsinze, spoke about Rwanda’s economic recovery from global shocks and trade with neighbouring countries. Below are the excerpts: Following several global shocks, how is trade picking up? We have been passing through serious shocks in terms of business, mainly from Covid-19. Of course, Covid-19 has not totally ended but at least people move as well as goods. In Rwanda, the business community suffered but the good news is that, today business is improving in terms of volumes and value. However, we have a challenge regarding the Ukraine and Russia crisis; some products are affected because of logistics with importation since some products are coming from those countries. But that cannot be compared to Covid-19. Even in the region, Rwanda is receiving good volumes both for exports and imports. We hope to have more requests and more value in terms of money. We are currently doing well in trade and expect to be more efficient in the coming years. How is Rwanda now trading with the international community and precisely with neighbouring countries? We have some formal trade in many European countries where we send horticulture and agricultural products. However, we have other formal markets with our neighbouring countries except for Burundi whose border is still closed. For instance, in our trade with DR Congo, people have been conducting trade even during the pandemic. To date, around 60 to 70 per cent of our total export revenues are from DR Congo. We recently had issues at the DR Congo border but people continued to trade. If you go to Rubavu District on the Rwandan side or Bukavu in DR Congo, you will see movement. What we do as a government is to continue providing support to the business community by putting up structures at the border to help traders with the storage of their products. In the Northern part, our border with Uganda is now open too after some years of difficulties. If you look at the numbers in terms of products, people continue to request trade permits and products like cooking oil, juice, agricultural products, and roofing nails keep entering the country every week. There are those that have also asked for trade licences for cement as well. Generally, business is going well but not on the same level as it was before, but we hope in one year we shall be able to catch up totally. Take us through the process of licensing and who is required to acquire it. Licensing is a tool required by trade agreements to make sure the products you intend to import have all the required quality standards to avoid importation of substandard products. It’s a process meant to ensure that products have internationally required standards. It is however applied worldwide not only to East African countries. Even people exporting to Europe, China, name it, have to look for licensing permits. Rwandan exporters also have to seek a trade licensing permit. You mentioned trade with Uganda is likely to catch up in a space of one year, why? Politically as you know, we are enjoying the fruitful collaboration. Economically, when the border was opened, people around the border were very happy. The good news is that the business community began to work together again. So we have Ugandans who are exporting goods to Rwanda and also Rwandans exporting goods to Uganda. Covid-19 impacted not only Rwanda but even other countries in terms of businesses and I believe the shocks from the pandemic were felt by both sides. For that reason, we have not been able to catch up quickly. But after Covid-19 and the war in Ukraine, we will catch up because we enjoy trading with Uganda and even from the historical background we had a strong relationship in terms of trade. So we hope to continue that way. During the recent visit of Uganda’s foreign affairs minister, he signed an agreement with his Rwandan counterpart on the resumption of the Joint Permanent Commission after 10 years. How is it going to be beneficial? When you put in place a commission, it is there not only to analyse issues or problems but even to create opportunities. I think the Permanent Commission will help to unlock in all sense the relationship between Rwandans and Ugandans in terms of trade, among others. So it is a good tool to work together and it also means that in case of any problem or any opportunity, people can sit and work it out together. So, the commission will be beneficial to both communities. Rwanda is among the countries piloting the AfCFTA. How is East Africa going to benefit from Rwanda being among the piloting countries? We are piloting among other seven countries. For sure East African countries will benefit in terms of having a chance to trade directly with 54 other African countries. And secondly, the East African community is working together to see how they can put efforts together so that they can have a common market. Meaning that they can form a group and join efforts to make sure that they trade together without going outside the terms of AfCFTA and support what African countries want in terms of trading and enjoying the benefits of the agreement. Rwanda will be a promoter of implementation, so for that reason, we even have a strategy that is not only on the Rwandan side but also started implementing AfCFTA so that other countries can have a chance to learn from us and work with us. We believe it is a great opportunity to have Rwanda in this piloting phase. Rwanda is a landlocked country, and among the many countries being affected by rising food prices. What is being done to ensure that this is at least contained or reduced? When you are a landlocked country and even small in size, there are some opportunities you can’t have because you can’t access them directly. But the good thing is you learn how to do things differently. We are a landlocked country; we know it and can’t change it. So, for that reason, we put in place strategies in order to work with others. First, is having relationships with others in terms of transport. For that reason, today we have a strong airline – RwandAir – because we know we can’t have access to the sea. The second is to have bilateral agreements that are preferential with other countries which are the ways you can unlock the problems and have them resolved. Rising food prices is a global issue, of course we have been affected because the transaction cost, logistics, is somehow high and we have an import gap in our economy. We even import inflation because when you buy goods from countries affected by inflation, then you are importing inflation. The good thing is we can increase the purchasing power of our community through some subsidies of course. We put subsidies on some factors of production and even some products for consumers like fuel to make sure that we reduce the impact of the high cost of products to our community. Those are the strategies put in place of course, we can’t say we will always have the subsidies for everything but you calculate very well in order to make sure that the purchasing power of people can somehow be stable. Indeed, it’s a challenge like you said, not to access the logistics hub directly. But the good news is, we create that chance to make sure that we connect with all people and for that reason, if you see how we are building infrastructure in terms of transport; we are going to have a new airport in terms of capacity, we have a project on warehouses to make sure that we can have enough stock because the fluctuation of prices is fast so when you have enough stock you contain some prices. Those are some of the strategies we put in place. You want development and quality in trade, yet some argue that for development to happen you have to let everything in irrespective of the quality. How are you going to achieve the ambition of fast growth and quality moving together? When you have good quality, you have good money and reputation. When it comes to quality, the focus is on technical efficiency and that’s how quality becomes premium to us. Of course, some countries say that it is better to have quantity more than quality. It is their strategy but for us, we must have quality and work on quantities to increase both sides. Honestly speaking, if you see where we came from in the last ten years in terms of trade, be it volumes, value, diversification, or any sector, you will realise that we have invested too much effort in quality and this is why, we may be small in size, but honestly, we are big on the international community. How will Rwanda be trading in the next ten years? In the next ten years, we will be trading differently because we have now enough infrastructures. We will be a place where people go to and trade. We want to make sure that Rwanda will be the centre of the business community. We want to make sure that by then, people will be coming here to do business; people can come here to buy things for export, but the big part of it will be digitalisation to reduce the problems we have of being a landlocked country. We are now developing e-commerce platforms so that people can go online and trade. We already have a centre for e-commerce financed by GIZ which will soon be launched, so people can go online, and have a chance to trade. Do you apply any exceptional tax, let’s say an additional tax, on a particular EAC member country? Usually taxation is part of treaties and agreements that the countries have. They are either bilateral or multilateral. If I take an example of the East African Community, the tariffs we apply are agreed upon in the treaty of the East African Community and are harmonised across countries. How we treat Uganda, Kenya, Tanzania, Burundi or DR Congo is the same. The levels of tariffs we apply are in the agreement we all have, which is within the framework of customs tariffs. Rwanda doesn’t have a particular tax for a particular country because we belong to multilateral agreements. We apply what we agreed with other countries.
