25 January 2014

Rwanda: Diversity Will Increase Export Volumes

THE MINISTRY of Trade and Industry announced this week that the country last year, much as it faired better than the previous year, fell short of the projected growth by nine percent.

For the country that is known to surpass its set targets in different sectors, this should be cause for alarm, and a wake up call for all parties involved to ensure that the gaps are fixed.

The disadvantages of a wide import-export gap on the macro-economic dynamics of a country are well known, meaning that however much the other sectors continue to progress, this gap if unchecked, will remain a major stumbling block.

Among the contingencies that have to be looked into, includes diversifying from the traditional exports which is coffee and tea because increasing alternatives will not only drive the volumes higher but will also make the country less vulnerable to external shocks.

Some of the alternatives that should be looked at beyond tourism is exporting labour, if the figures in the past few years, the revenues brought in through remittances from Rwandans in the Diaspora is anything to go by.

For example, in 2012, remittances from the Diaspora according to figures from the National Bank of Rwanda, accounted for $111 million and this can only go up if we are to leverage the economic integration agenda on which this country has embarked, especially the opening up of regional borders through the Customs Union under the East African Community.

Other areas that need strengthening is increasing value addition on the agriculture output that is locally produced. Instead of farmers going for lower prices in the local market, especially during a bumper harvest, they should look at exporting, but this requires value addition on their produce.

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