Rwanda counts EAC integration benefits

When Rwanda applied to join the East African Community (EAC) in 1996, skeptics argued that its emerging private sector would be no match for the bigger firms in the region.

When Rwanda applied to join the East African Community (EAC) in 1996, skeptics argued that its emerging private sector would be no match for the bigger firms in the region.

However, they have since been proved wrong as the country has socially and economically benefited from the membership it assumed in 2007.

It has benefited tremendously from the effective implementation of the Common Market Protocol and Customs Union that have accelerated economic development and fostered social ties with the East African citizenry through the elimination of barriers to regional trade and movement of services, goods and people.

In an interview with The New Times, Claudine Uwera, a local trader at Nyabugogo market dealing in garments and bags, and who has been in business for the last eight years, narrates that since the country joined the EAC, her business had flourished.

“I had a few customers and since I had just started, business was not much. The business atmosphere however drastically changed in 2008 when I could receive customers from other countries especially, those from Uganda and Kenya,” she explains.

She further observes that though she previously imported her commodities from Kampala, she is now able to import from the rest of the region, particularly from Kenya where she says goods are cheaper. 

Uwera, who claims her business has grown by 60 percent, however pleads to all EAC member states to remove trade barriers to enable traders in the region to do more business. She says she currently exports her merchandise to Burundi, which she labels as still a virgin market.

According to November 2011 statistics, Rwanda’s exports to other EAC states increased by 65.7 percent in the third quarter of the year to US$16.37m (Rwf9.7b) compared to US$9.88m (Rwf5.8b) during the same period in 2010.

According to Rwanda External Trade Statistics Report by the National Institute of Statistics of Rwanda (NISR), Kenya was the main destination of Rwanda products with a share of 84.8 percent of total exports to the EAC region, followed by Burundi and Uganda with 9.3 and 5.1 per cent respectively.

The report further indicates that imports from EAC partner states increased by 17 percent from US$ 89.6m (Rwf53.3b) to US$104.8m (Rwf62.3b) in the third quarter of 2011. 

EAC consists of five member countries; Burundi, Kenya, Uganda, Tanzania and Rwanda, with the population of 133.1 million, a combined GDP of US$79.2 billion and per capita income of US$ 685

Emmanuel Gakuba, a Forex bureau trader in Kigali, commends the government’s move to join the EAC, saying that due to free movement of people within the region, his business has also doubled.

“I used to receive an average of four  to five customers per day, exchanging about Rfw100,000, but today, due to many people travelling in the region, I normally get over 25 customers and exchange over Rwf300,000 per day”. He said.

Gakuba further notes that previously, there was a scarcity of Kenyan currency, but today, as a result of the free movement of people and capital, he can easily access the Kenyan shillings in abundance. 

However, despite the rapid gains, there are indications that economies like Kenya and Uganda continue to dominate the market due to their sheer size and history.

 Professionals, especially teachers, as well as, traders from other East African countries, are attracted to Burundi and Rwanda in search of jobs and markets.

Recently, while in Kigali, Thaddee Siryuyumunsi, the Director General in Burundi’s Ministry of Information and Communication, pointed out that Kenyans and Ugandans have also made a foray into his country’s informal job market, arguing that such jobs can be done by uneducated nationals.

“In the northern part of Bujumbura, Kenyans and Ugandans are roasting meat; they are working in beauty salons and markets. Our people are just being pushed deep into villages,” the Burundian official laments.

The Dean of Faculty of Economics and Management at the National University of Rwanda, Prof. Rama B. Rao, notes that for the country to continue to effectively benefit from the community, there was a need to identify all the challenges affecting the business community.

“We need to address the challenges affecting Rwanda and sensitise the nationals to participate in all the business activities in the region,” he advises.

The don says that the country is on the right track in the implementation of the protocols, adding that this has provided a market for locally manufactured products and played a significant role in the economic development of the country.

Though the government recently embarked on a countrywide awareness campaign on the importance of the East African Community, some citizens, especially the semi-literate, certainly remain ignorant of the benefits of integration.

“I don’t know what the EAC is all about. I normally hear about it on the television but I don’t fully understand it,” Emmanuel Nizeyimana, 20, a waiter in a Kigali restaurant innocently says. 

On the other hand, though the EAC has prospered in fostering economic partnership among member states, ills like corruption, existence of non tariff barriers, poor infrastructure and lack of adequate human resources, still hinder its progress.

eric.kabeera@newtimes.co.rw 

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