Rwanda’s phoenix-like emergence from the ashes of the 1994 Genocide against the Tutsi to an emerging regional powerhouse was warmly commended by the US Secretary of State, Mrs. Hillary Clinton, in her speech at the 8th Forum of AGOA Kenya, on 5th of August.
The African Growth and Opportunities Act (AGOA), signed by former President Bill Clinton, has allowed African products to enter the American market duty-free since its inception in May 2000.
As a result of this single piece of trade legislation, huge opportunities have availed themselves to African exporters and, as a result, entire Sub-Saharan nations as well. Rwanda has not been left behind.
She called Rwanda’s progress “amazing”. She applauded the fact that Rwanda’s economic progress kept going forward, and lauded government initiatives such as family planning, Rwanda’s partnerships with donors and NGOs and the professionalism public sector.
However, this commendation conflicts with the very real fact that Rwanda’s exports to the American market have fallen by sixty percent if figures from the Private Sector Federation (PSF) are to believed.
The bulk of Rwandan exports to the US market, which enjoy AGOA privilege, have been agricultural products tea, pyrethrum, minerals, handicrafts and gift articles.
Coffee exports, which Rwanda is attempting to add more value to, have reduced from $2.4million in 2007 to $0.77 million in 2008 while ores and concentrates exports reduced from $4.61million in 2007 to $1.74 million in 2008.
While these figures might seem to be discouraging, they might not be telling the whole truth. Currently only a few Rwandan enterprises export to the US market, despite the U.S providing a relatively stable market for Rwandan products.
Gahaya Links, a handicrafts marketing company, Rwanda Basket Company, Gallerie Beaux Arts, Sopyrwa (Pyrethrum) and Utexrwa (Textile) are among the few companies currently exporting to the US.
For Rwanda to fully enjoy the fruits of AGOA, the private sectors must begin to see the US market as an opportunity and not an insurmountable challenge.
Domestic businesspersons have to think outside the box and become innovate. Simply exporting a few bags of coffee and baskets isn’t enough.
They have to look for Rwanda’s competitive advantage. If they don’t do so, Rwanda’s inclusion in the AGOA framework will be of little use to our economy.