Three years after its launch, the Made-in-Rwanda initiative continues to experience challenges that limit its impact in the local business ecosystem.
If these challenges are addressed, experts say, it would significantly enhance the initiative’s impact on job creation and exports, and result in reduction of import deficit.
One of the main issues that stakeholders have since identified is high cost of local products.
The high cost of locally made products is often due to the high production costs involved as a result of reliance on imported raw materials and expensive technology.
However, the Government is now moving in to bolster the Made-in-Rwanda initiative.
A new policy was lunched this week having been approved by the cabinet in December last year.
The policy aims at improving access to inputs, increasing local production of raw materials as well domestic value chains, and plugging into regional and global value chains.
In regards to the cost of products, the Government has also made provisions for preferential considerations of products and services in instances where local products are more expensive than imports.
Augustin Seminega, the director-general, Rwanda Public Procurement Authority (RPPA), highlighted the fact the new law on public procurement offers preferential treatment to locally made products, even when they are up to 15 per cent more expensive than imports.
This, he said, partly addresses concerns of uptake of Made-in-Rwanda products, especially in public procurement.
The new policy also seeks to address challenges related to quality of locally made products to make them more competitive in the local market and beyond.
Telesphore Mugwiza, the acting director general of Industry and Entrepreneurship at the Ministry of Trade and Industry, said that this will be partly be addressed through introducing Made-in-Rwanda trademark which will be awarded to high quality products.
“We will offer quality and reliable infrastructure and any other kind of support to firms to ensure that products meet the standards that clients seek,” he said.
Under the policy, the Trade ministry will work with the Rwanda Bureau of Standards on a graduate placement programme, while it will also work closely with Rwanda Development Board on helping small and medium enterprises to better access domestic inputs.
University graduates in key priority areas will undergo intensive short courses on standards and later placed in companies as employees.
The Government also says it will work with various firms to enable them improve the quality of their products to enhance their competitiveness.
Mugwiza partly attributed the slow uptake of local products to mindset among a section of citizens who perceive Made-in-Rwanda products as inferior.
“We will be rolling out communications campaigns to ensure that we address the issue to the negative mindset and improve on perception of local products,” he added.
The backward linkages – to help link small and medium local manufacturers to suppliers of raw material – will result in creation of ecosystems and value chains which will allow for producers to source their inputs locally, thus creating more value in the economy.
The process will involve development of business analytics and dedicated supplier development units.
To implement the Made-in-Rwanda blueprint over the next seven years, the Government has set aside some Rwf274.5 billion, 90 per cent of which (245.9 billion) will be from the development budget while 10 per cent (28.3 billion) will be drawn from recurrent budget.
The biggest chunk of the budget, estimated at 54 per cent, will be spent on activities to attract private investments.
To help boost consumption of locally produced goods, the new Minister of Trade and Industry, Soraya Hakuziyaremye, called on civil servants to wear locally made outfits at least every last Friday of the month.
Bernadete Umunyana, the founder and Creative Director of Dokmai, a Rwandan leather products firm, welcomed the latest developments, saying it would boost appeal for local products and subsequently increase consumption.
She said that, over the course of recent years, she has seen her local customer base grow significantly.
“Previously, about 20 per cent of our clients were local while about 80 per cent were foreign. Now, about half our clients are local,” Umunyana told The New Times.
Umunyana added that waiving taxes on imports of eligible raw materials will help reduce production costs, subsequently leading to a reduction in prices.
Sina Gerard, a leading producer in the agro-processing sector, also called on local producers to pull in the same direction and actively partake in efforts to promote Made-in-Rwanda.
Other interventions to boost local production include lower industrial electricity and water tariffs following the rollout of a new industrial tariff structure.
The new tariff structure seeks to ensure that producers have preferential rates designed to help reduce cost of production.
In addition, small and medium enterprises are also set to benefit from affordable serviced land in special economic zones which would see firms access industrial estates with necessary production amenities.
It is estimated that over the last three years of implementation, the Made-in-Rwanda initiative has reduced the trade deficit by about 36 per cent and increased value of total exports by about 69 per cent, from about $558 million to $943 million.