Members of the business community from Rwanda and Uganda are looking at possibilities to explore and utilise the investment opportunities between the two countries.
Hundred of business personalities in the areas of banking, manufacturing, mining, agriculture, education and real estate from both countries yesterday met in Kigali to seek solutions to the challenges hindering the growth of investments and trade between two nations.
Despite strong and historical bilateral ties, members of the business community from Rwanda and Uganda have not exploited business opportunities existing between the two East African Community states.
"I don't know the reason why we should not allow the flow of investments in our two countries? We are endowed with vast investment opportunities but we are not maximising them," said Patrick Mweheire, the executive director, Stanbic Bank Uganda.
He pointed out a huge gap in cross border money lending saying that Bank of Uganda limits cross border lending, which restricts capital flows within in the countries.
"We need to address lack of financing mechanisms to boost trade and investment between Uganda and Rwanda. We are still having a long way to go to allow capital to flow between countries and even the currencies are inconvertible, we trade in dollars when conducting our businesses and this is a challenge to the growth of the financial sector of our two countries," Mweheire said.
According to statistics from Rwanda's Ministry of Trade and Industry, the formal trade volume between Rwanda and Uganda was at $192 million in 2011 and in 2012 it was at $241 million.
Business analysts say that the trade volume would greatly increase if the private sector of both Rwanda and Uganda fully utilises the business opportunities available in both countries.
However, A. R. Kalan, the Managing Director Crane Bank, Uganda said that out of 33 million people in Uganda, only 4.3 million save their money in banks.
He says the saving culture is low and informal which hinders business growth.
Kalani noted: "Ugandan banks are safe and "not part of European bank failures". Africans have a culture of thinking that loans are just gifts which shouldn't be paid back. We need to work together and explore the opportunities available in the financial sector of Uganda and Rwanda."
He mentioned that Crane Bank would open a branch in Rwanda next year.
The interactive discussion that was moderated by Amb Richard Kabonero, Uganda's high commissioner to Rwanda, dwelt on finding ways that can boost the flow of investments between the two countries.
"Removing non tariff barriers to trade and promoting the growth of markets for our products will increase investments between the two countries. My products are already in both Ugandan and Rwandan markets but the market potential is still low to absorb my products," said Sina Gerard, Rwandan investor and owner of Entreprise Urwibutso Nyirangarama.
He thanked the governments of Rwanda and Uganda for fast tracking infrastructural developments connecting both countries which he said would ease the movement of goods and people.
Amelia Kyambadde, Uganda's Minister for Trade, Industry and Cooperatives said that members of the private sector from both Uganda and Rwanda have taken much interest from both countries after the first forum and Uganda was supportive to their ideas and initiatives.
"I am glad now that we are working towards a more optimistic and brighter future. It's time for us to move forward, we should not continue lamenting about challenges, we should go ahead and trade," she noted.
Removal of structural bottlenecks
Kyambadde said both countries are looking forward to the removal structural bottlenecks and strengthen regional integration and bilateral cooperation, looking at comparative advantages that exist between Uganda and Rwanda.
The meeting organised by Uganda High Commission in Rwanda, Rwanda Development Board and the Private Sector Federation held under the theme "linking opportunities and investors" follows the first similar meeting that was held in the Ugandan, Capital Kampala last year.
The business forum aims at promoting trade, investments, and enhancing bilateral partnerships between the two states.
"Our trade and investment policy should focus on breaking the barriers to trade in our two countries and facilitating trade in the region. We want to see our region competitive and strong in terms of trade and investment," said Emmanuel Hategeka, the Permanent Secretary in the Ministry of Trade and Industry.
He added: "Our total trade with Uganda - $192 million in 2011, $241 million in 2012 - posted about 25 per cent growth. It's uncommon to register a double digit growth in trade between two countries. Thus the business community from both Rwanda and Uganda should use the opportunity available and invest."
Silas Lwakabamba, the Minister for Infrastructure said that under the tripartite arrangement among Rwanda, Uganda and Kenya, infrastructural developments will boost the flow of investments in the region.
"The issue here is the connection between infrastructure developments, you cannot avoid infrastructure developments if you want economic development, they are inter-related, that is why our governments in the region are putting much emphasis on infrastructure developments to boost trade," he said.
Some initiatives developed to improve trade between Rwanda and Uganda include the establishment of the one-stop border post at Gatuna/Katuna, as well as a joint surveillance team to crackdown on smuggling and tax evasion practices.