EAC integration seems like the logical thing to do but you wonder what the niche for Rwanda is. I have not seen any Rwandan products on the shelves of the three main EAC countries Uganda, TZ and Kenya.
That is worrying because the whole point of this exercise is to trade internally and reduce leakage of forex. It is not just problem that Rwanda faces, Kenyan products adorn the shelves of the other countries but not vice versa. It is only worse for Rwanda because we import more from our neighbours especially Kenya and Uganda.
The main problem we face in EAC is the similarities in our economies, we all rely on; coffee, tea, tourism and aid. Even among these revenue streams, there is little differentiation among the products.
For example in coffee and tea we still sell generic raw coffee and tea that is repackaged as the products of western countries. In tourism we offer the same safari-type packages, only gorilla trekking in Rwanda offers something unique but there are strict limits on permits to protect them. Internally most countries produce light consumer goods like toothpaste, toilet paper, margarine and the like.
When we look at our trade, we wonder how we can produce goods to sell to each other to create a circular flow of trade. Even in Europe they have this problem, for example Italy, Spain, Greece, Portugal and France all produce wines, cheeses, olive oils, butter, fruits and such.
However, the varieties and product differentiation within that range is so wide that they can trade among themselves. For example French wine is so different to Spanish wine that they can traded, but blue band is blue band, whether made in Kenya or Rwanda.
We need to start producing products to trade among ourselves; the poor transport network has meant we never connected psychologically and logistically as a market.
When the transport and logistical problem is solved by better roads and the removal of customs points, then true competition will emerge. Many internal “blue band” industries will die or have to diversify to compete regionally.
Kenya can supply all the blue band we need from one factory in Nairobi; it is only the logistical problem of moving products that means that Unilever operates under license in many countries. Another thing we need is local brands to develop; when I went to live in Europe I was horrified to see that Blue band, Omo, and many others weren’t actually African brands.
The geographical distance of Rwanda from the main industrial hubs of Nairobi and Kampala means that we have to produce products internally to reduce the transport costs. Comparing the countries in ICT, Rwanda comes ahead by far, the internet is miles better and we will soon attract even more ICT companies to Kigali.
However, we need to start to produce goods for sale regionally to sit on the shelves in supermarkets. We are producing all the best economic indicators regionally, we now need tangible goods to match those indicators or we could end up chasing targets forever.