Rwanda’s imports for cement related products have gone down from over Rwf67 billion in 2015 to Rwf35.4 billion in 2016, according to figures from the Ministry of Trade, Industry and East African Affairs (MINEACOM).
The development comes as the government looks for ways to strengthen capacity for local production to meet growing housing demand and reduce expenses on imports.
The 2015 Domestic Market Recapturing Strategy estimates that the development of the domestic construction material industry could save the country $206 million spent on importation of construction materials per annum.
The Fourth Population and Housing Census, published in 2012, projects that about 102,000 new households were to be created by 2015, which would shoot to 111,575 by 2017 and 125,674 new households as the population grows from 12 million to at least 15.4 million by 2032.
As per the Rwanda Housing Authority, Rwanda will need at least 340,000 housing units by 2022 based on findings from a in 2012 study to establish needed residential houses, especially in Kigali.
In 2015, Rwanda imported over $105 million worth of metallic construction materials consisting of steel and iron, as indicated by figures from MINEACOM.
The Director General of Industry and Entrepreneurship Development at MINEACOM, Annette Karenzi told Sunday Times that construction materials were a priority.
CIMERWA, the only cement manufacturing company in Rwanda, has an installed capacity of 600,000 tonnes per year, which is almost the national cement.
In 2015, CIMERWA spent $170 million to expand its capacity from 100,000 tonnes per year, then.
Regarding tiles, MINEACOM says East Africa Granite’s production capacity stands at 240, 000 square meters (m2) per year.
For Iron bars, the Domestic Market Recapturing Strategy showed potential saving of $34 million per annum with a high potential to recapture the domestic market.
Mohammed Rafi, Commercial Manager of SteelRwa – a company that makes iron bars based in Rwamagana District, said that it produces between 1,800 tonnes and 2,000 tonnes of iron bars per month while its production capacity is 3,000 tonnes per month.
He added that the company plans to increase production as there is enough demand for iron bars in the local construction sector, noting that there is also an export market in neighbouring countries like DR Congo’s Goma and Bukavu regions.
However, he expressed concern over constant power cuts that affect their activities.
He said that the factory needs between 6 to 7 megawatts per hour during operations.
“The industry is a continuous process, the machines work in tandem. If there is a brokerage in one machine, we have to cut and remove everything. Even if there is one second power cut, it will stop, [and] we will incur huge losses because it (the materials to make iron bars) is hot rolled,” he said.
Another challenge, he said, is that some scrap metal which could be used to make iron bars locally was being exported outside Rwanda.
Government interventions to support local production
MINEACOM’s Karenzi said that the Public Procurement Law is currently under review and the proposed amendments to the law to support local companies were sent to Rwanda Public Procurement Authority (RPPA) for consideration.
Other interventions include the removal of Value Added Tax (VAT) on raw materials and machinery needed in the construction sector.
“Made in Rwanda Policy is also aimed at making the manufacturing sector as a whole more competitive,” Karenzi said.
In February this year, 2017, the then Director General for Rwanda Housing Authority, Didier G. Sagashya, said that projects for 30,000 houses in line with the government’s move to set up affordable houses have been identified of which about 1,500 houses were being built.
He said that to achieve the affordable housing goals, issues that should be addressed included the price of land, affordable construction materials and technology in the construction sector, as well as looking for ways banks can lend money to investors at low interest rates and help the beneficiaries of the houses get affordable loans.