Govt moves to reduce trade deficit

The Ministry of Trade and Industry has devised strategies to reduce the import bill by increasing locally made products on domestic market. This, according to officials, will be done through the domestic market recapturing strategy whose study was commissioned in September aimed at looking at what can be done to increase the quantity and quality of locally made products. Speaking on Friday during the validation of the study, the Permanent Secretary at the Ministry of Trade and Industry, Emmanuel Hategeka, said the strategy will reduce a big trade deficit where the exports are only a quarter of what is imported. “If, for example, $4 is spent on imported products, we spent a dollar on exports. We need to increase export and reduce the imports by producing more quality products,” Hategeka said. The country’s economy mainly depends on agricultural produce like coffee and tea while other exports are services like tourism with the largest chunk of imports being construction materials and technological appliances. Hategeka said the strategy, once implemented, the country will in the next six years reduce by 18 per cent the import bill as potential forex savings of $450 million could be reduced annually if all measures are successfully implemented. Consumerism drive The ministry will soon start mobilising Rwandans to purchase locally made products and ensuring that what is locally produced meets the standards and demand in quantity and quality and finally discern other products in need and attracting investors for the producing. The report shows that 21 sector products, which are grouped into three sectors of construction, light manufacturing and agro-processing, will be potentially competing on the domestic market. Construction sector targets products like cement, paints, steel and iron products, ceramic tiles, plastic tubes etc; light manufacturing includes textiles, pharmaceutical products, detergents, plastic packaging, laboratory reagents, furniture, insecticides among others; while agro-processing entails products such as sugar, dried fish, aquaculture, edible oils ,rice, fertilsers, among others. PS Hategeka said there was need to support the private sector to increase local production capacity. The study shows, for example, that construction materials (steel and cement) represent 10 per cent of current imports, and which, the study shows, can be mitigated by expanding domestic production and use of clay products, locally produced timber, promoting straw board panels for mid-range houses, facilitating further production of sand and stone materials, among other measures. It also indicates that agro processing products stand at 12 per cent of imports. The ministry looks to support infrastructure, develop commodity exchange and warehouse receipt system, introduce and expand crop insurance schemes, promote franchising to foster value addition, develop linkages between agro-processing, animal feeds production and organic fertiliser usage to improve agricultural productivity and invest in irrigation infrastructure and greenhouse technology. editorial@newtimes.co.rw

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Govt moves to reduce trade deficit