The New Times (Kigali)

Rwanda: Industrial Sector Growth to Narrow Trade Deficit

The government is buoyant that despite its fragility, the industrial sector has the capacity to narrow the country's huge trade deficit to help the country achieve a middle income status by the year 2020.

Minister of Trade and Industry, Francois Kanimba, believes that the sector's contribution to Growth Domestic Product-GDP which has been growing in recent years indicates that with more reforms, the sector would bring in more foreign exchange receipts needed to narrow the import-export deficit.

"Local industries need to access affordable and efficient technologies in order to promote sustainable development," he said during the Africa Industrialisation Day on Tuesday.

Accordingly, the sector contributed 13 percent to GDP in 2001 before it jumped to 16 percent last year and it is projected to increase to 20 percent by 2020 when the country aims to attain the middle income status.

The Minister says that with the current trade deficit that stands at more than $ 1.2 billion, there is need to support industrial development to increase value added products for export.

"In order to compete at regional and international markets, we need to focus on value addition and products diversification and recapturing our domestic market," he adds

The country has registered significant progress in agro-processing firms particularly tea, coffee, dairy, cassava, maize, wheat, rice, and horticulture to increase the country's export receipts.

To harness this, the Minister said; "We need to continue to invest in human capacity and access to technology should be addressed through technology adoption and transfer."

"We also need to applaud our joint efforts in Rwanda which are producing encouraging results compared to the targets of the Rwanda Vision 2020," he said.

Africa still lags behind in terms of both industrialisation and trade compared to other continents due lack of access to finance, unfavourable business environment, lack of suitable technology and innovations, corruption, unskilled labor force, costly and unreliable raw material, as well as poor infrastructure.

Industrialists say that to increase industrialisation and intra-trade sector on the continent, governments need to address challenges of infrastructure, technology, energy, foreign exchange fluctuation and non tariff barriers.

Experts believe that the establishment of National Industrial Research and Development Agency (NIRDA) will contribute towards promotion of industrial technology improvement and transfer.

"We are committed to supporting Rwanda by investing in modern technology which makes products more competitive in the market," Mounir Bakhresa, the Managing Director Bakhresa industries-Rwanda said.

Moreover, there is also need to train industrialists to mainstream resource efficiency and cleaner production programmes throughout their processing to boost production by avoiding the negative impact of climate change.

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