RWANDA:

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RWANDA
REFORMING FOR GLOBAL TRADE The experience of
Rwanda Hon. Vincent Karega
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Outline

1. Where we have been Recent past and challenges
2. Where we are Ongoing reform efforts
3. Where we want to be Strategic priorities for the
   future
4. Conclusion

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1) Where we have been Recent past and challenges
faced

• Rwanda rising from history of civil strife and
  genocide halving GDP in 1994 to about 1bn and
  per capita income of 120.
• Low per capita income estimated at 320 today
• Agriculture based economy with low levels of
  manufacturing and services
• Population growth rate of 2.6 per year
• Challenges
• Rwanda has a high growth economy and must
  diversify to avoid slowdown
• High energy costs

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• Access to long term and flexible finance coupled
  with infrastructure constraints
• Double deficit Fiscal and Balance of Payments
• Land locked status and distance from the sea
  translating into high transportation costs for
  the only available option (road)
• Logistical trade barriers mainly at the regional
  level
• Inadequate human and institutional capacity
• Policy choice to rapidly transform Rwanda into
  the most competitive place for trade and
  investment in the region

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2. Where we are Ongoing reform efforts

• Performance in Doing Business index flat over
• 2007 and 2008 150th over 178 economies. Masks
  significant reforms across the board
• Trading across borders performance indicates
  improvements
• IFC/FIAS trade logistics project is partnering
  with us to further design and implement reforms
  in this indicator

Trading Across Borders Doing Business Doing Business
  2007 2008
Rank 178 166
Documents for export (number) 14 9
Time for export (days) 60 47
Cost to export (USD per container 3840 2975
Documents for Import (number) 20 9
Time for import (days) 95 69
Cost to import (USD per container 4080 4970
     
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Time for Export Procedures in Rwanda in 2007 47
Days
70
60
1
2
50
3
40
9
30
10
5
20
17
10
0
Assemble and
Pack goods
Inland
Customs
Terminal
Wait to load
Load
Process
transportation
clearance
handling
container
Container
Documents
activities
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Trading across Borders Time for Import Procedures
in Rwanda in 2007 69 Days
10
70
2
15
60
50
5
5
40
4
1
2
30
20
20
10
5
0
Obtain bank-
Assemble
Vessel
Berthing and Unloading
Terminal Handling Activities
Customs Clearance At seaport
Customs Inspection In Rwanda
Arrange for Inland transportation
Waiting time At border Crossing
Import
Inland transportation
related
Waiting
documents
documents
time
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On-going reforms

• Trade logistics working group in place co-chaired
  by RRA (Customs) and private sector federation,
  overseen by GoR/MINICOM
• Efforts to simplify and harmonize documents for
  international trade and align them to
  international best practice, within EAC and
  COMESA framework
• Creating a more streamlined and integrated border
  management system ie Customs taking coordinating
  lead over other agencies (RBS, Minagri, public
  safety)
• Address identified Non-tariff barriers
  highlighted in Rwanda Private Sector Federation
  study along Northern and Central corridor e.g.
  multiple weigh bridges and police stops, long
  queues, poor infrastructure and inadequate
  computerisation, different working hours etc

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• Aim to reduce number of days to export to 30 and
  50 for imports over the next 12 months
• We are initiating self assessment in addition to
  implementing pre-clearance and prepayment of
  taxes and duties
• Channel allocation at the border e.g.
  consignments under the blue or green channel
• Risk management is being implemented and we aim
  to streamline it in order to maximize its
  potential. Further training of customs officers
  is required.
• Promoting the use of a single administrative
  document as an information source for control
  over international trade activity.

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• Change-management within Customs to ensure
  measures in place are fully understood and
  applied
• Mobile scanners acquired for cargo inspection
• Inspections can be done at point of exit rather
  than the dry port as previously done
• Single payment point for customs, Rwanda Bureau
  of Standards (RBS), Magerwa (Customs warehouse)
• Observations
• For reforms to achieve objectives, businesses
  should be able to apply and take advantage of
  them
• Communication is critical and we look out for all
  opportunities to engage with business community
  to develop partnership for mutual benefit.

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Where we want to be Strategic priorities for the
future

• Rwanda Vision 2020 requires consistent 7 real
  economic growth rate from 2000 to 2020 to become
  a middle-income country by the year 2020. Our aim
  today is to achieve double digit growth, and this
  is possible through rapid diversification, and
  fast tracked international trade,
• GDP growth should be sustained to safeguard our
  prosperity, ensure employment generation,
  improving living standards and to build
  resilience to external shocks (such as recent
  Kenyan crisis and rising oil prices)
• Strategy is to concentrate on strong performers
  and engage private sector investment in
  transport, logistics and ICT services (towards a
  redistribution and ICT hub), and financial
  services (toward a financial hub)

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• How do we intend to become a redistribution and
  ICT hub
• to maximize our competitiveness?
• Electronic single window which would serve as an
  information platform for stake holders in cross
  border trade. This would entail simplified
  documents consistent with international best
  practice, Integrated border procedures and
  computerisation
• In hand with above, introduce electronic payment
  system
• One-stop border post and joint customs inspection
  within EAC
• Rwanda is engaged in regional integration with
  EAC given implication on trade

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• Actively involved in negotiations with EAC
  partner states to address international trade
  issues Rwanda to join customs union in 2009, and
  negotiations for common market launched,
• Building a much more modern international airport
  with better handling capacities and services. Its
  preliminary studies complete
• MOU signed to extend oil pipeline from Kampala to
  Kigali with participation of Libya
• Establishment of the Free Trade Zone and
  industrial parks
• Establish full scale risk management that has
  successfully been piloted

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Conclusion

• The Rwandan government has set in motion a
  comprehensive package of reforms and is committed
  to sustain this momentum.
• Rwanda is privileged to be a beneficiary of the
  IFC FIAS Trade logistics project and their
  partnership with us in this reform process. We
  commend the recent trade logistics advisory
  mission to our country in early April 2008 and
  the work done so far.
• There is need to see beyond trade logistics for
  an integrated approach (supply side,
  infrastructure, storage, standards and speed)
• We are committed to continue to coordinate the
  national reform taskforce and we look forward to
  better donor coordination in this respect to
  ensure synergies and coherence.

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