Made in Rwanda, strong impact with challenges

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Made in Rwanda had a positive impact on the industrial output and the country’s trade balance. Since the launch of the campaign in 2015, Rwanda’s total exports have increased by 69%, from 559 million USD in 2015 to 944 million USD in 2017. Total imports decreased by 4%, from 1.849 billion USD in 2015 to 1.772 billion USD in 2017. Since 2015, Rwanda has experienced a 36% decrease in its trade deficit.

According to the World Bank report, Rwanda exports grew by 33.5 percent in 2017 the robust growth, stronger than in 2016, reflects the positive impacts Made in Rwanda.  It has started to bear its fruits and according to national institute of Statistics, the share of Industry in the National GDP is of 16%.

According to Felicien Mutalikanwa, chairman of Rwanda Association of Manufactures(RAM), « Manufacturing industries are the backbone of the economies. It has been proven that the growth of manufacturing output has been a key to economic transformation of many countries. The manufacturing industries allows the economies to diversify export streams, create higher quality jobs and build more stronger and more stable economies ».

Despite,performance of the Rwandan manufacturing sector over the years, with improvement areas ; the way forward has challenges.

10 subsectors of Manufacturing industries

Food, Beverages and Tobacco sector, it includes Beer; Flavoring, Soft Drinks and Carbonated Water, Flour and Grain Milling, Meat and Fish, Tea, Coffee and other Beverages, Dairy Products, Fruit Juice, Tobacco, Biscuits and Bakery Products, Animal Feeds, Sugar, Distillery and Blending of Spirit, Vegetable and Edible Oil; miscellaneous food products and other

Chemical and pharmaceutical Sector, it includes paints, Vanishes and Allied Products; Industrial, Medical and Special Gases; Soap and Detergent; Agro-Chemicals (Fertilizers and Pesticides); Pharmaceuticals; Toiletries and Cosmetics; Automotive Battery and other

Plastic, rubber and foam sector, it includes rubber products, plastic products, foams

Metal, iron, steel and fabricated metal products sector, it includes steel pipe; foundry; metals; galvanized iron sheets; nail and wire and other

Pulp, paper and paper products sector, it includes rubber products, plastic products, foam and other

Electrical and electronics sector, it includes electronics, electric bulb lamps, accessories and fittings, and other

Textile, leather and apparel sector, it includes: textile and wearing apparel, leather products, footwear, and other

Timber, wood and furniture sector, it includes wood products and furniture, plywood and particle boards and other

Non-metallic products sector, it includes glass products, ceramics, cement and other

Motor—vehicle and miscellaneous assembly sector, it includes automobile component, bicycle, motorcycle assemblers, motor vehicle assemblers.

RAM’s chairman says, « As industries, we need to produce quality and affordable products to be more competitive, that why with the support of the Ministry of Trade and Industry, the Made in Rwanda Expo has been held for the past three years to showcase what Rwandan industries has to offer. The consumers have positively receptive of our products. The government procurement has also played an important role in introducing preference for locally manufactured goods. With increased momentum and the support of the government of Rwanda and development partners, the manufacturing industries are able to produce and market their products, we can recapture our domestic market.

We would like to share with you the performance of manufacturing industries in the past year based on the statistics from National Institute of Statistics of Rwanda in 2017/18, Manufacturing activities increased by 8 percent boosted by food processing activities which increased by 15 percent, manufacturing of chemicals, rubber & plastic activities which grew by 8 percent, and manufacturing of textiles, clothing & leather goods which increased by 19 percent. We find here the growth of textiles and leather products thanks to the government initiative of banning second hand clothes and shoes.

We currently have Volkswagen which started assembling vehicles in Rwanda, Bralirwa is starting to produce Heineken Beers locally, Skol is increasing their production capacity to meet the market demand. These are few examples among many. These examples are the proof that manufacturers are playing their role in promoting Made in Rwanda ».

Challenges :

First, imported goods packed in plastic packaging materials while local manufacturers are constrained to use expensive alternatives to plastic. This lead to a lack of competitiveness of Rwandan-made products on the local market place.

Second, access to long-term financing is also an important obstacle to the growth of the manufacturing sector. The banking system, whose operations have traditionally been geared towards short term financing, will need to have a central role in the continued development of the Rwandan manufacturing sector through availing long-term financing at affordable capital costs. A lack of this type of financing will result in a slow-down of investment in capital goods as well as research and development. This would be a step back in the growth of our economy as well as the reduction in the trade balance deficit

Third, in the agro-processing sector in particular, access sufficient raw materials that meet industry standards is a significant challenge that leads to sub-optimal capacity utilization across different industries. Local farmers need to be sensitized to transition from being subsistence farmers to market oriented groups of farmers or cooperatives by applying agricultural and post-harvest best practices.

Finally, regulation and enforcement of standards continues to represent a serious obstacle to manufacturing growth as certain large and established manufacturers face unfair competition through illicit practices of traders and an informal manufacturing sector which produces and markets sub-standard goods.

These highlighted challenges have resulted into the loss of business opportunities, temporary suspension of productions, closing shops of some SMEs, inability to create employment opportunities and also inability to compete regionally and globally and earn foreign exchange for the economy.

The success of Made in Rwanda is achievable and the industries are ready to play their role by producing more quality and affordable once these highlighted challenges are dealt with.

The competitiveness of Rwandan Manufacturing industries will not only promote Made in Rwanda but will also generate substantial employment, create wealth, increase exports and also diversified foreign earnings.

To conclude his speech on the celebration Africa Industrialization Day and Made in Rwanda promotion, Mr Felicien Mutalikanwa (boss of MINIMEX),  encourages manufacturers to join the association. « as we join forces, we become a pro-industry and collective voice of manufacturing sector ».

 

 

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