Rwanda, DR Congo Look to Further Bolster Economic and Trade Ties

21 January 2021

DR Congo President Félix-Antoine Tshisekedi met the Minister of Trade and Industry, Soraya Hakuziyaremye, and Rwanda's envoy in Kinshasa, Vincent Karega, on Tuesday, January 19, to discuss ways in which the neighbouring countries can increase their economic and trade ties.

This comes after, among others, in April 2019, national carrier RwandAir's maiden commercial flight to Kinshasa, in April 2019, boosted business and strengthened commercial ties between the two countries.

Tuesday's meeting was also attended by the Congolese Minister of National Economy, Acacia Bandubola Mbongo, and the Minister of External Trade, Jean-Lucien Bussa Tongb.

Hakuziyaremye was in Kinshasa on Tuesday, along with Foreign Affairs Minister Vincent Biruta who delivered a message by President Paul Kagame to his DR Congo counterpart.

According to Hakuziyaremye, the discussions were in line with the vision shared by President Kagame that Intra-African trade must be pursued in view of the African Continental Free Trade Area (AfCFTA) start of trading launched this month.

"In particular, exploring all opportunities for joint investment projects between Rwanda and DRC and strengthening trade of goods and services between the two countries," Hakuziyaremye said.

She explained that the Rwanda and DR Congo Ministers are "tasked with rapidly rolling out joint projects in key sectors including agro-processing, infrastructure, mining and ICT."

A subsequent bilateral Ministerial meeting was held Wednesday to identify priority projects and potential partnerships to be initiated in the coming weeks.

Trade between Rwanda and DR Congo "has grown at a double-digit rate annually since 2012," Hakuziyaremye said.

By and large, DR Congo is a strategic trading partner with Rwanda. Among others, the former remains the main destination for Rwanda's informal exports.

Sort out discouraging cargo charges, customs duties

When RwandAir launched direct flights to Kinshasa about two years ago, new export business opportunities were churned.

According to Rwandan businessman Albert Gashirabake who was on the inaugural flight, even though trade between the two countries is good, a lot more can be done in terms of improving business facilitation especially in cargo transport and taxes.

Two issues, he said, high cargo transport charges and taxes at the airport in Kinshasa, are hindrances to trade.

"But if there were agreements on tax as well as with the national carrier on cargo charges things would go well since, you know, Kinshasa has a population of around 15 million. Traders are willing to go trade there," Gashirabake said.

"Let me give an example, when you send a kilo of irish potatoes just across to Brazzaville, it is charged one dollar; an equivalent of 1,000 Rwandan francs. Now consider a kilo of potatoes bought here at Rwf400 and then you add that cargo charge, you realise that the cost is high. This also affects many other local products we could be exporting. In some other products, the cargo charge or cost per kilo even goes as high as $1.5. We remain optimistic that this matter will be examined and costs reduced to ease trade."

The tax issue he referred to was customs duties.

Most often, he explained, the rates are not fixed as tax authorities the other side just set rates anyhow.

"You can take foodstuffs and they tax you 50 per cent of the produce. This tax can be even higher than what you will eventually sell at and you become discouraged. If only Rwanda would reach an agreement with them to, for example, waive tax on foodstuffs, this would be most welcome for us because I even think there exist certain related CEPGL agreements but they are not abided by."

Stick Luka, a pharmacist who lives and works in the Eastern DR Congo City of Bukavu, the Provincial Capital of South Kivu, was also in RwandAir's inaugural flight to Kinshasa.

Speaking from Kinshasa on Thursday, he told The New Times that "when RwandAir started we were hoping to open a branch for business opportunities between Kigali and Kinshasa but unfortunately, with this Covid-19 situation things are not going well."

Luka then also confirmed what Gashirabake said was a key challenge traders face at N'djili International Airport in Kinshasa.

"But the other issue, on our side (DR Congo) is the custom duties at the airport that are very high. In effect, things coming in from even South Africa and Europe are very expensive and that's why people are not operating with cargo (flights) and prefer to bring stuff by sea. Our customs here are very high and this is blocking some people to get business here in Kinshasa," he said.

RwandAir's flights imply that Kinshasa is just two hours away from Kigali but there is a perception that people have not taken advantage of this.

Luka also thinks the Kinshasa business community has not really understood what opportunities are available in Kigali. This needs to be changed, he said, by the business community from both ends exchanging more, and better.

"The other thing is that people haven't discovered Kigali very well because some people in Kinshasa pass via Kigali to go to Dubai because RwandAir started with a good offer of less costly tickets. But there is no kind of marketing that shows that we can offer this or that."

"I think business people have to organise a forum or something to show people what we can exchange as products and so many other things that we can share."

Last year, a study titled "The Opportunities for trade in the Democratic Republic of Congo" conducted by the East African Business Council in collaboration with GIZ indicated that Rwanda is the largest exporter of textiles from the EAC region to the DR Congo.

But it also showed that Rwandan SMEs in the textiles business ought to explore this business line for expansion and diversification.

Looking at the value of EAC partner states exports to DR Congo in 2018, according to the EABC-GIZ report, Rwanda comes first with $337.4 million, followed by Uganda with $204.3 million, Kenya $149.8 million, Tanzania $144.9 million and Burundi at $18.9 million.

President Tshisekedi on June 8, 2019 wrote to the EAC Chairman, Kagame, expressing his country's wish to be a member of the regional bloc currently comprising Rwanda, Burundi, Uganda, Kenya, South Sudan and Tanzania.

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