The New Times (Kigali)

13 January 2014

Rwanda: Govt to Tackle Traders Challenges

Government pledged to continue facilitating private investors and eliminating existing barriers to trade, in a bid to propel the economy towards its targets in the second Economic Development and Poverty Reduction Strategy (EPRS2).

This was agreed by several government officials who included among others, the Minister for Finance, Claver Gatete, and the Commissioner General of Rwanda Revenue Authority (RRA), Ben Kagarama, during an interactive conference with close to 50 traders in and around the country in Kigali.

During the discussions on Friday, organised by the Ministry of Finance, and the Private Sector Federation, traders faulted government for failing to provide sufficient electricity necessary to run daily businesses.

"Insufficient electricity hampers the production capacity of several businesses. We have targets as well, but if the challenge of electricity is not addressed, we may not be able to achieve them," James Nsengiyumva, a trader, said at the meeting.

In reaction, minister Gatete said although the country produces insufficient electricity, the government has a strategy to triple it through several production projects and importation.

"We need electricity now and yet its production takes time. The government decided to look into importation while it waits for its own production projects. The cost of electricity in Rwanda is over 20 cents per kilowatt hour and yet in some countries, for example Ethiopia, has only four cents per kilowatt hour. We can import power in the short run while we focus on producing in the long run," Gatete said.

"The highway of electricity importation is, however, not yet compatible, meaning that even if there is cheaper electricity in Uganda and Kenya, there is no way of transporting it to here. The government, therefore, decided to prioritise the transmission links from Uganda, Kenya and other countries, in order to import electricity cheaply and faster," he added.

The business fraternity also urged government to reduce the costs of new innovations like the electronic billing machines, meant to ease payment of taxes. The machines are supposed to be purchased by all taxpayers and cost up to $650 dollars, according to RRA.

"We embrace new innovations because they simplify work, but we are not comfortable with the price of the electronic billing machines. We know they help us to easily calculate VAT, but why must they be so expensive?" John Bosco Mugabe, a businessman in Kigali, asked.

The Commissioner General of RRA, Ben Kagarama, reiterated that the cost of the machines is high because the technology used to develop them was expensive. He, however, promised that the cost will drop once the machine providers have recovered their costs.

"The machine is unique and beneficial to both the taxpayer and to RRA. I have talked to the manufacturers and they said the price could drop by half in the near future. RRA will continue to be the interface between the traders and the suppliers but we should appreciate that they invested heavily in the new technology," Kagarama said.

Government seeks to work closely with the private sector as it gears to achieve targets in the five year EPRDS2 agenda, which seeks to among others, create 200,000 jobs annually, as well as to raise GDP per capita from $644 to $1,200.

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