More than 200 cargo trucks have been imported into the country since the law lifting the ban on Right Hand Drive Trucks (RHD) came into force early this year, Business Times has learnt. The law that modified and complemented Article 88 of the Presidential Decree N° 85/01 of 2/09/2002 regulating general traffic Police and road traffic, applies to trucks weighing 20 tonnes, including cross-border public transport buses and road tractors.
The increase in the number of cargo trucks provides traders, especially those involved in export/import businesses, access to affordable logistics services, eases the cost of doing business and makes the local logistics industry more competitive in the region.
William Musoni, the acting deputy commissioner general for customs, said the number of investors joining the transport business has been on the rise since the law lifting the ban on RHD heavy trucks was published in the official gazette in February.
“We have noticed a tremendous increase in the number of RHD trucks being imported. We expect this to make the local logistics sector more vibrant and competitive… Our work as customs is to facilitate the process and also sensitise stakeholders on how the new law works,” Musoni told Business Times in an exclusive interview.
Statistics from Rwanda Revenue Authority customs department indicate that 223 heavy trucks have so far been imported into the country. Of these, 136 were from Germany, Dubai (20), five were from UK, eight from Japan, Tanzania (3), while 50 trucks were imported from China and one truck from Spain, among other countries. Musoni explained that trucks attract an 18 per cent value-added tax.
Statistics from Rwanda Long Distance Truck Drivers Association indicate that there are about 150 investors providing long-distance cargo transport services. This number has, however, increased greatly since the ban was lifted. The group employs more than 300 drivers.
Abdoul Ndarubogoye, the vice-president of Rwanda Transporters Association, said members were now saving up to $5,000 (Rwf3.8 million) on each truck bought, which was not the case under the old law.
He added that they also find it easy to work with banks, thanks to the new law. He said he has so far ordered for 50 trucks, 10 of which have since arrived in the country.
Ndarubogoye said a 2002 model RHD truck costs around £28,000 (about Rwf34 million) compared to over £35,000 (about Rwf41million) previously.
A recent survey by Ministry of Trade and Industry indicates that by lifting the ban on the importation of RHD trucks, an estimated $500 million (about Rwf362.6 billion), which was paid to foreign logistics firms, would be saved.
Theodore Murenzi, the chairman of the Rwanda Long Distance Truck Drivers Association, said as more trucks are imported, it will boost the competitiveness of the transport services and ultimately bring down the cost of transporting goods to and from the sea ports.
Importers pay up to $5,000 (about Rwf3.8 million) to transport a container from Dar es Salaam to Kigali, a distance of only 1,497 kilometres, partly because of expenses incurred in hiring trucks from outside the country. Those using the Northern Corridor pay more than $6,000 for a similar container from Mombasa to Kigali.
Mohammed Mazimpaka, an importer, said as more players join the logistics sector, the cost of doing business will reduce further.
Accessing funds a challenge
Access to finance has continued to dog the sector as some banks are still reluctant to work with truckers, according to Ndarubogoye.
“Most banks still look at the transport business as risky, meaning that even when you have collateral some commercial banks are still reluctant to extend credit to us, Alex Niyonzima, one of the truck importers, noted.
However, the bankers dismissed the claim, saying truckers with good bankable business plans always access the funds.
The fate of RHD cars to be decided next month
Meanwhile, the Ministry of Infrastructure is due to review a study on whether Rwanda should lift the ban on importation of all RHD vehicles.
According to the ministry officials, the report was submitted to the ministry two weeks ago and will be reviewed by the technical committee early next month. Burundi and Rwanda are the only countries in the East African Community that drive on the right owing to their history of being French colonies. Kenya, Uganda and Tanzania were under British rule.