Rwanda: 2021 Key Investments Likely to Bolster Local Production

30 December 2021

Despite the disruption by Covid-19 on the national economy, the Made-in-Rwanda dream continued to gain momentum thanks to major investments attracted.

The New Times has compiled eight investments that were unveiled in 2021 that could give a boot to local production.

1. Rwf29 billion tile plant in Nyanza District

Construction works on Nyanza District-based multibillion tiles manufacturing plant kicked off in April.

The Rwf29 billion plant will be the first of its kind in the country to make tiles from clay, a locally available raw material for construction.

Construction is expected to be complete in the next 18-months starting from April.

The move followed an agreement signed between Nyanza District and Africeramics -- the subsidiary of Milbridge Holdings -- which has diversified investment interests in construction.

The plant will manufacture 9,000 square metres of floor tiles per day in its first phase of operation, 18,000 square metres in the second phase and 36,000 square metres in the third phase meaning within three years.

Rwanda's Domestic Market Recapturing Strategy indicates that local production of ceramic/granite tiles would save over $4 million annually.

2. Rwf5 billion electric cable factory

Construction works on the Rwf5 billion electric cable factory in Nyanza District, Southern Province was completed in 2021.

The factory was constructed by Mark Cables Company but the district also owns shares in the factory.

The plant has the capacity to manufacture 5,000 kilometres of cables per year.

The factory is set to employ between 1,000 and 1,500 people.

Rwanda spends $30 million on cable imports annually, according to available data.

3. Rwf1.2 billion Integrated Craft Production Centre

Rwf1.2 billion Integrated Craft Production Centre known as Agakiriro that was also completed in Nyanza district.

The centre will also host a garment factory

4. $3.5m hygiene products factory

Irene Basil, a Rwandan living in the USA 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.

The first phase will employ 150 people and 300 in the second phase,

5. $5 million bamboo processing factory

The first phase of the investment to process bamboo into different products was completed at the end of the year.

The first factory to produce marine board, plyboard and furniture is located in Gasabo district in Rusororo sector.

It is expected to produce 10,000 pieces of marine board per day.

$5 million has been earmarked for the value addition of the bamboo plant in the country.

The second factory, proposed in Kicukiro District, will locally manufacture various bamboo-based products such as toilet paper and other sanitary products, toothbrushes, shoe brushes, for sale in local and export markets.

It t will have the capacity to produce 120 tonnes of paper pulp per day.

6. $10 million cooking oil manufacturing plant

Kayonza Distribution Company Ltd, a local retail firm invested $10 million in a cooking oil manufacturing plant.

The investment will help trim the import bill for cooking oil as well as improve the country's trade balance.

The plant is expected to produce 100 tonnes of cooking oil every day.

With these new investments, Rwanda hopes to gradually reduce cooking oil imports, which peaked at 126,002 metric tonnes last year, up from 121,981 metric tonnes in 2019.

In 2020, Rwanda spent a staggering Rwf106 billion on the importation of cooking oil, which is among the top 10 products that are shipped into the country.

Rwanda produces at least 80,000 metric tonnes every year and imports an average of 125,000 metric tonnes, making it a net importer of cooking oil.

7. Tannery Park to be set up in Bugesera

The Ministry of Trade and Industry unveiled plans to have a modern tannery park in Bugesera District to reduce imports of tanned hides and skins and as well as reduce the country's trade deficit.

Local manufacturers of leather products such as shoes, belts, sandals, bags among others have been relying on imported tanned hides and skins because there is not enough quantity and quality of them on the local market.

MINICOM noted that studies have been carried out and only that remains is a budget for infrastructure development.

Rwanda imported tanned hides and skins worth $15.6 million in 2019, an increase from $13 million in 2018 mainly from Kenya, China, and Ethiopia, UAE and Tanzania and this could stop once Tannery Park is established.

Meanwhile, the ministry said that the establishment of finished leather and modern shoe factory will drastically reduce imports saying imports of new footwear increased $15 million in 2016 to $23 million in 2019.

8. Construction of vaccine plant announced

The government of Rwanda signed a memorandum of understanding with BioNTech to initiate the construction of the state-of-the-art manufacturing plant for mRNA-based vaccines slated for mid-2022.

The facility will be set up in the Special Economic Zone in Gasabo District.

The capacity of the plant will start by producing 50 million vaccines at the beginning, but production will increase depending on demand.

9. Made in Rwanda production in 2021

In September, The Ministry of Trade, Industry and Cooperatives (MINICOM) announced that the increase of Rwanda's GDP by 20.6 per cent in the second quarter of 2021 compared to 14.4 per cent in 2020 was thanks to the increase in production by local industries.

Evalde Mulindankaka, MINICOM's Director General of Industry and Entrepreneurship, said that the closure of borders due to the Covid-19 epidemic since 2020 prompted Rwandan industries to seek solutions and ways to increase productivity.

There has been an improvement in agro-processing industries in order to close the gap caused by import bill especially rice, maize, milk, fruit, meat products and animal feed processing.

Production of construction materials such as cement, iron and steel, tiles, electronics also played role in GDP increase.

Industries played a key role in boosting GDP production by 30 per cent due to home appliances that increased by 111 per cent, medical equipment that increased by 39 per cent, and machinery and equipment that increased by 47 per cent.

Louis Antoine Muhire, Coordinator of the Made in Rwanda Secretariat at MINICOM said that the catalogue of Made in Rwanda has grown saying, "Up to now we have 700 certified products as Made in Rwanda S-Mark products."

"Covid-19 came in, of course, it affected a lot of industries. We are conducting a survey to see how many died. However what we have observed is that some have converted themselves into new products instead of totally shutting down," he said adding the recovery fund has also played in ensuring that the local industries recover from the effects.

In the past five years, there has been an increase in exports thanks to Made in Rwanda products, he said.

Rwanda earned over $1,487 million (over Rwf1.4 trillion) from exports during the 2020-2021 fiscal year, up from over $1,277 million during the previous year.

Exports Annual Average growth in the last 5 years was 13 percent according to MINICOM.

Since 2015, consumer goods importations are reducing by an average of 3 percent and largely being replaced by domestically produced goods

Rwanda laid out a five-year plan, since 2016, dubbed the "Domestic Market Recapturing Strategy," to boost Made-in-Rwanda campaign.

The study indicated that the total foreign exchange savings induced by the strategy could reach almost $450 million per year.

These include construction materials (cement, iron, steel, aluminum products, paints and varnishes) which accounts for $206 million, light manufacturing (textile and garments, pharmaceuticals, soaps and detergents, reagents, packaging materials), which accounts for $124 million, and agro-processing (sugar, fertiliser, edible oil, dried fish, maize, rice), which accounts for $112 million.

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