Why you should buy 'Made in Rwanda'

The American dollar is a real power among global currencies, a true bully whose negative effect is felt by all except aliens; on Monday, Central Bank reported that by March 24, the franc had lost 2.6 percent of its value to the dollar.

The American dollar is a real power among global currencies, a true bully whose negative effect is felt by all except aliens; on Monday, Central Bank reported that by March 24, the franc had lost 2.6 percent of its value to the dollar.

It means that for every franc you earned last month, its value was less by 2.6 percent. That lost value was gained by the dollar. Those who pay bills in dollars will find the 2.6 percent depreciation much more familiar and easy to understand.

 

Say you paid Rwf75000 to buy US$100 in December, to pay for rent. The 2.6 percent depreciation means, to buy the same amount of dollars last month, you needed an extra Rwf1950.

 

Literally, your rent increased by Rwf1950 without the landlord having to increase it; but he doesn’t have to, the exchange rate easily does it for him, almost every month.

 

You run off to find the extra Rwf1950 to buy $100 but your salary has remained unchanged for the last two years.

Most of the stuff in the supermarket next to your house is imported; Central Bank says we spent US$297.02 million on imports in January and February, higher than the US$263.55 million spent in the same period last year.

That increased demand for the dollar, to pay for our import bill, which is largely to blame for the 2.6 percent depreciation of the Rwanda Franc because the national import bill is paid in dollars.

To find dollars, the country has to export coffee, tea, minerals and vegetables to other countries and get paid; unfortunately, all the dollars earned from Rwanda’s exports in the first two months of this year only managed to pay for 20.6 percent of the total import bill.

It means there is a huge gap between what the country earned from her exports and what was paid out for imports; this is called a trade deficit, a situation where a country’s imports exceed exports resulting in a huge outflow of foreign currency to other countries.

Rwanda’s trade deficit widened by 12.7 percent in January and February; during the same period, the hash-tag Made-In-Rwanda trended, but clearly, our online efforts must translate into some tangible offline action if the desired results are to be obtained.

Considering that Rwandans are some of the most patriotic people in the world; this is an asset that leaders should exploit and rally the public to limit or even shun unnecessarily consuming imports.

That hash-tag ‘made in Rwanda’ should be consolidated by a ‘buy local’ national campaign. Currently, we are, understandably spending quite a lot on capital goods, considering all the multi-million dollar projects ongoing.

Last year, I learnt a lesson from our Ethiopian brothers and sisters. They are currently building a 6000mw dam, the largest in Africa. Such a project requires a huge amount of machinery most of which would have to be imported.

To avoid that, the Ethiopian army swung into action; 90 percent of the machinery needed on the project, I was told and later saw for myself, is being fabricated locally, not only creating jobs but also saving foreign currency.

Rwanda’s import bill is dominated by three types of imports. Capital and intermediary goods; these are necessary for a developing economy such as Rwanda. But we can cut on this expenditure by learning from the Ethiopians.

The third type of import is the consumer goods. They are goods that are ultimately consumed. Those imported wines, those beauty accessories for women. Almost everything you see in the supermarket yonder, we want but not necessarily need. We could do without them.

Angwusnasomtaqa, {pronounced, Ann - wusa – nasom-tagah; sorry for the inconvenience caused} is a close female friend of mine; she’s a very patriotic Rwandan but her shopping habits are some of the most unpatriotic, I know.

She owns several imported hair-wigs including Russian and Brazilian virgin hair each costing over US$180. She also owns 100 pieces of acrylic French false nails worth US$130, a collection of false eye-lashes, and Pink Flamingo, a US$530 outfit that enhances female hips.

Her collections form part of Rwanda’s import bill. But beauty accessories are absolutely unnecessary for women who are already naturally endowed.

But even men have a role to play. Why buy those sharp pointed Italian shoe brands when there are locally made shoes in Rwanda with very good quality?

I know about choice, taste and preference in economics. I know about quality issues and its alleged lack among locally made stuff; but this about patriotism. This is about helping the currency in which you earn your monthly salary to retain its value.

Every time you buy an import, you are boosting the demand of the dollar and reducing the value of the local currency; technically speaking, you are giving yourself a pay cut because whenever the Franc depreciates, it is the power of your salary going down the drain.

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