Experts are optimistic about economic gains Rwanda could get by establishing itself as a regional logistics hub, to improve the supply chain and facilitate trade among African countries. Earlier this year, the World Bank, in a report on Rwanda themed ‘Boosting regional integration in the post-Covid era,’ stated that Rwanda, serving as an intermediating node between the East and Central Africa regions, offers prospects to increase revenues and generate efficiency gains through the concentration of logistics services. Given Rwanda’s location, conducive business and trading environment, there is an opportunity for it to become a strong regional logistics hub, Antoine Kajangwe, Director General of Trade and Investment in the Ministry of Trade and Industry said. He also highlighted how the country is at a level of competition with neighbouring countries in terms of transportation of cargo and even in efficiency of services. “In many ways, we are able to make progress across the region but when you don’t have trade logistics, then you are forced to import from distant countries because they have a way of getting products to you.” Rwanda has already made steps in establishing itself as a logistics hub with the Kigali Logistics Platform, an inland container depot that is soon to become a dry port within the country, he highlighted. However, there still needs improvement in service delivery and economies of scale to drive down the cost, hence, become competitive, he added. The World Bank estimates the value of transport services from Kenya to Rwanda to be approximately $50 million per annum. According to the Central Bank, Rwanda spent $3,201 million on merchandise imports in 2021, an increase of 16.5 percent from the previous year as the country shipped in more inputs to support growing domestic industrial production. Kajangwe said: “It is an expensive sector, whether you are looking at freight equipment, ships, containers, railways, roads, it requires a lot of coordination amongst governments to invest in infrastructure and facilitate trade.” He mentioned that the right investments can be targeted in infrastructure, warehouses, and transport trucks, much as freight forwarding is a business that has grown over the last 10 to 15 years. Cynthia Kamau, Country Representative of Kenya Ports Authority in Rwanda, observed that there is great potential for the country to become a regional logistics hub but underlined a low number of players in the sector, which also contributes to the high costs in the sector.
