Senate discusses trade deficit

ASenatorial Standing Committee on Economic Development and Finance is currently meeting with members of the agricultural export board to seek ways of boosting the country’s exports. Unlike last year’s economic performance where the GDP growth hit 11.2 percent, the economic activity in all sectors has been slowing down during the first half of 2009. According to the committee’s vice chair, Sen. Chrysologue Kubwimana, a report from the National Institute of Statistics indicates that last year’s exports totaled US$280m while imports hit US$900m. “This is not the overall total of the exports and imports since the figures to not include products like food crops,” said Kubwimana. The Director General of OCIR-Café, Alex Kanyankore, said that if the government emphasizes value addition, then exports may increase. “The prices of input products keep increasing which frustrates the manufacturers. The government should look into ways of neutralizing prices of raw materials,” said Kanyankore. He pointed out that the Agricultural Export Board needs to be reorganized and specialize in some products. Other issues affecting exports, according to him, include the high cost of transport. Anthony Butera of OCIR-THE blamed the government for not giving the trade imbalances due attention and proposed that a thorough assessment of products produced for export needs to be done. He suggested that a permanent unit be established to follow up the trade imbalances and advise the government on how it can boost the exports The representative of RHODA, Eric Kabayija, said that Rwanda has to first set up a marketing infrastructure otherwise the country will always face trade imbalances. Members of the Agricultural Export Board also proposed that the government sets up a seed manufacturing factory and the introduction of new laws governing agriculture and technologies that would facilitate production. The move by the Senate to improve the country’s exports follows a Central Bank’s report that that indicated a slowdown in almost all main exports products. The significant decline is related to the global financial crisis which impacted prices and reduced demand. According to the report, despite a decrease of 8% in volume, tea exports showed a slight increase of 1.2% in value resulting from the improvement in price which rose from US$2.08 to US$2.29 per kg. The mining sector is the most affected with a decline in value of more than 40% for tin, coltan and wolfram, following a dramatic fall in their prices, by 37.6%, 30.1% and 7.1% respectively Coffee exports also underperformed, with a respective decrease of 21.1% in value and 13% in volume, in comparison with the first half of 2008. The average price decreased by 9.3%, from US$ 2.45 per Kg to US$2.22 per Kg. The decrease in volume is due to the fact that processing started a bit late in all provinces except in the Western Province, due to delay in financing the coffee campaign. However, the perspectives of the coffee exports in the remainder of this year are expected to improve to reach 20,000 tons for the whole year compared to 18,191 tons for 2008. Ends