Rwandan in Diaspora to Set Up U.S.$3.5 Million Hygiene Products Factory in Muhanga

Irene Basil, a Rwandan living in the USA has launched a project to build a $3.5 million factory to produce hygiene products in Muhanga District of Southern Province where he hails from.

He said the investment idea emerged following the Covid-19 pandemic.

"My investment was inspired by the Made-in-Rwanda policy backed by the government. I also realised that hygiene products such as sanitary pads, toilet paper are in high demand.

He said that the project will play a role in economic recovery amidst the Covid-19 pandemic by creating jobs.

"Many people lost their jobs due to Covid-19 pandemic. As Rwandan diaspora we should do something that can contribute to national economic development. We should support the Made-in-Rwanda initiative to increase locally produced products. I talked to the ministry of trade and industry and facilitated me to secure two-hectare land in Muhanga District," he said.

The construction of the factory, he said, will be executed in two phases.

"In the first phase, the factory will start producing toilet papers, sanitary pads, diapers, wipes, and others. We have to make sure the products have quality and are affordable," he said.

The second phase, he noted, will have a component that manufactures different types of soaps.

"The first phase will employ 150 people and 300 in the second phase," he said.

At least 33 families are set to be expropriated as the factory is set to be completed in three months.

Residents in Muhanga District say that the industrial zone development will improve their welfare.

"Some of the jobless residents, especially young people like me, hope to get jobs and the zones get more factories," said Charles Twagirimana, a resident of Nyamabuye sector.

Innocent Kayiranga, the Vice Mayor in charge of economic development in Muhanga District said that the industrial zone is being equipped with infrastructure to facilitate investors.

So far, he said, water and roads infrastructure have been constructed to ease access to the industrial area while high-voltage power transmission will be constructed to power the factories.

Muhanga District in collaboration with the Ministry of Trade and Industry have developed an industrial zone master plan on 67 hectares of which four hectares are reserved for crafts centres.

Over 60 factories are expected to be constructed in this industrial zone and help in increasing locally produced products.

Made-in-Rwanda policy and industrial zones

According to Made-in-Rwanda policy, $450 million can be saved annually by reducing the trade deficit.

Light manufacturing can save up to $120 million while construction materials can save up to $206 million whereas agro-processing can save up to $112 million per year.

Developing industrial zones is one of the strategies to reduce the trade deficit.

According to the report by the Parliamentary committee on economy and trade on assessing the implementation of Made-in-Rwanda policy, special economic zones in Kigali city, secondary and satellite cities are expected to help in reducing the trade deficit.

However, a report issued in December 2020, indicated that the industrial zones are not yet fully expropriated.

Muhanga District has reserved 63 hectares, Rubavu has 50 hectares, Rusizi has 45 hectares and Huye has 50 hectares.

There are 167 hectares for an industrial zone in Musanze district, 50 hectares in Nyagatare district, 80 hectares in Rwamagana district, 100 hectares in Kicukiro district and 330 hectares in Bugesera district.

However, the report needed infrastructure in some industrial zones has not yet been established.

The government is rolling out incentives under the Manufacture and Build to Recover Programme targeting the to increase the production of construction materials, agro-processing, as well as hygiene and sanitation products.

Companies setting up industries or expanding operations in the above sectors will be exempted from import duty for materials and equipment bought for purposes of setting up the production plants.

The incentives include giving tax exemptions on construction materials, machines to be used in setting up the manufacturing plants. If the inputs are not locally available and are imported, one will not be required to pay import duties, if it's locally sourced, you are exempted from VAT.

For those in the construction and are sourcing materials locally, they will be exempted from VAT. This will give the investors an opportunity to save and reduce the overall cost of their investment.

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