Audit recommends use of technology to cut import tariff on wood products

Inadequate technology in wood processing is costing Rwanda millions of dollars on importing wood-related products, a new audit has revealed, calling for government subsidies for the industry.

The audit was carried out on 127 wood processing enterprises in 10 districts, which were randomly selected and assessed.

Conducted since March this year and launched this week, the audit report assessed the status of the industry, highlighting gaps in terms of raw materials, processing methods as well as the tools and equipment used.

Commissioned by National Industrial Research and Development Agency (NIRDA), the audit also aimed to determine the competitiveness  of Rwanda's wood industry the challenges in the value chain and the bottlenecks that actors face.

Dr. Paul Mugabi, a researcher and consultant who was part of the team that conducted the audit, said that in 2017 Rwanda imported articles of pulp, paper and board worth $34.7 million (approximately Rwf31bn).

The wood related products that Rwanda imports include paper, board, and office furniture, which researchers said can be produced locally.

“Most of these furniture items from Malaysia, China, can actually be done here if the right training and the right equipment is used,” he said

One of the opportunities that the private sector should harness is the environmentally friendly policies, especially on ban of polythene bags, which calls for use of packaging materials such as paper-like materials which can easily be decomposed, the audit highlighted.

It also recommended that pulp and paper technology should be introduced (in the long run), in addition to adopting paper recycling technology in the short term.

Rwanda also needs to adopt modern technology to improve the finishing of wooden products made locally in order to benefit from the export market.

“There is a market even in the region and beyond,” Mugabi said.

Kampeta Sayinzoga, the Director General of NIRDA, said this situation implies that there is investment opportunity in Rwanda’s wood sector.

“We will work with Rwanda Development Board (RDB) so that we determine whether there is a Rwandan or foreign investor who wants to venture into this activity,” she said. “What is good is that it has been established through the audit that it is a possible undertaking and has a market in Rwanda and in our neighbouring countries.”

Only one percent of the wood processing equipment surveyed is fully automated, 54 per cent are semi-automated, while 45 per cent are fully manual.

Production challenges

The challenges the local enterprises are face include competition from imported products, limited demand for wood and wood products, high taxes, lack of appropriate technology, lack of financial capital, lack of law materials, as well as limited electricity and water supply.

Anatole Mbazabagabo from Nyaruguru District said that; “We use manually operated equipment, which delays our work.”

The association – Centre Scout Rural de Développement Nteko from Nyaruguru District that he represents makes furniture such as doors, windows, beds, chairs, cupboards.

“If we get support, we can be able to satisfy demand,” he said.

Theoneste Sindikubwabo, another carpenter from Nyaruguru District said that because of limited technology, they are unable to transform wood dust into other products.

"We do nothing with the wood dust, it is left on site. That is a loss. We should have technologies to make use of whatever we have spent efforts to produce," he said.

NIRDA says the results from the audit will inform the process of preparing for “Open Call for support” by the Government through the leadership of NIRDA.