NAEB set to become a fully fledged public enterprise

The National Agricultural Export Development Board (NAEB) could become fully business-oriented while maintaining its regulatory instrument once a new proposal presented to the Lower House of Parliament is adopted. The new draft legislation governing NAEB’s establishment and functions was presented to parliament last Thursday. Should the bill, which has now gone for more scrutiny at the Parliamentary Commission level, be passed, it will help the export agricultural body to design strategic business models that would allow it venture into business areas which investors have shunned. The move comes shortly after Cabinet endorsed a proposal to redesign the function of the body to allow it be extensively a public enterprise other than the regulator in the export of local products, to help address the burdening trade deficit. The move additionally will help the body become financially independent after some time, a bold move still questioned by lawmakers. Explaining the relevance of the bill, the state minister for Agriculture, Tony Nsanganira stated that the focus of the body will be about strategic investment, where the government will identify potential areas seeking finances that can boost both production and export base for investments. “As a profit making government institution, it is going to specifically invest in key projects which are production related, the most important thing is that farmers maintain the productive arm and NAEB ensures proper monitoring of the activities in progress at the same time ensuring quality of products,” he said. According to the bill, NAEB among other things, will, through its strategic investment, lead investments in sectors facing more challenges in order to stimulate private sector through provision of initial investments on potential export products. Nsanganira further stated that the private sector has been shying away from investing in agriculture, a challenge that government had to own through taking initiatives and establish a public enterprise that can do investments in shared infrastructure. “That even the private sector will feel more comfortable coming in because the shared infrastructure would have been given at low fees compared to what they would have paid handling it alone, and this will of course lure private sector, although the government cannot wait till the private sector gets fully on board,” he added. He further explained that the intention of government is not to run business, but to facilitate and create an environment that encourages private sector which is the main objective of transforming NAEB into a public enterprise. However, the core responsibility of regulation was not fully taken away from the export body, which prompted lawmakers to ask authorities where a line can be drawn when it comes to profit making, how to reduce the balance of payment and how to separate its investment budget from government finances. Reacting on the tabled draft law, MP Juvenal Nkusi challenged the government to hit a production volume which was realised once in 2006, if indeed an export base in the sector of agriculture is projected to be widened. “Then, the coffee production hit 26,000 tonnes, something that we have done in the past ten years, the highest we had gone since then was production of 20,000 tonnes, thus going fully commercial might require setting up strategies that can increase production as well,” he said. So far, the government had been financing the export body at the tune of Rwf10 billion a year although the budget was slashed by Rwf2 billion in the current fiscal year. The body seeks to increase exports targets from the current 21 percent to 28 per cent in the next five years while decreasing its import base relatively down 17 per cent as it is stipulated in the ongoing Economic Development and poverty reduction strategy (EDPRS II). editorial@newtimes.co.rw

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NAEB set to become a fully fledged public enterprise