Rwanda and Tanzania are two different countries but someway with shared similarities. Rwanda is a geographically small country compared to Tanzania, but the two countries are among the fastest growing economies in Africa.
In fact, the two are ranked among the fastest-growing economies in Africa. The African Development Bank forecast the two countries will be among the top 20 world's fastest growing economies in the world in 2024.
Rwanda is estimated to grow at 7 per cent and Tanzania at 6.1 per cent in 2024. This robust expansion translates to a lucrative market brimming with potential for investors and businesses.
It is exactly what January Makamba, the Foreign Affairs Minister and East African Cooperation of Tanzania, implied in his long social media post on his last day of the visit to Rwanda. He made a strong case for Rwanda and Tanzania to tap into the potential that the countries have to promote shared interests.
"Tanzania is Rwanda's second largest trading partner. The potential to be first exists. We are going to work on it," the minister said in a long Twitter post, after concluding his three-day visit to Rwanda - a tour in which he made several commitments on behalf of Tanzania.
Indeed, Tanzania can be a strategic business partner for Rwanda. To start with, Tanzania is about 36 times bigger than Rwanda, way too big that what happens in Tanzania affects the entire East African region.
That is because Tanzania is a major trading hub in the region. The country's commercial port of Dar Es Salaam is a major logistics hub, connecting six landlocked neighbouring countries to the international markets.
Dar Es Salaam port processed 1.4 million metric tons of cargo and 63,000 containers last year. Rwanda is the third largest user of the port with more than 80 per cent of the country's cargo passing through the port.
It just makes so much sense for the two countries to strengthen their business ties, and that is a good enough foundation to build on, and Makamba agrees: "We've committed to make it easier for them to continue to use it. We've opened TPA [Tanzania Ports Authority] Offices in Kigali. We've assigned pieces of land to Rwanda for dry ports at Isaka and Kwala."
Tanzania assigning pieces of land to Rwanda for the two dry ports of Isaka and Kwala is a win for the business community. Isaka is exceptionally a strategic port because it offers transportation and distribution services to land-locked countries like Rwanda.
Rwanda would have a fair advantage if it can tap into Isaka port. The development of the assigned pieces of land would enable Rwanda to offset the hefty costs that logistic companies spend on transporting their goods from the port of Dar Es Salaam to Rwanda.
"Isaka is such a strategic dry port that could serve Rwanda in a meaningful way. The cost of transport would go down, the time it takes to process cargo would reduce, and it would prevent unnecessary costs logistic companies spend when the port of Dar Es Salaam is congested," Philbert Inkindi, Chief Commercial Officer at Dubai Ports World Rwanda weighed in.
Kwala, too, is another key port. Earlier this year, the Tanzanian government brought Kwala port into full operation in an effort to streamline the flow of cargo at Dar Es Salaam port. Kwala now handles 60% of Tanzania's cargo flow.
A multifaceted partnership
Rwanda being Tanzania's second largest trading partner means that there are more opportunities for business collaboration. From agriculture, tourism, and information and communication, to fast-moving consumer goods, the two countries have a chance to collaborate.
For instance, the Minister said, Rwanda gets a significant share of cereals from Tanzania. "We've decided to regularise this market. Rwanda has invested in a dairy factory in Mwanza, where farmers will get a lucrative market for milk. We have ensured the success of this venture."
Rwanda and Tanzania are also looking to develop their agriculture sectors through joint agriculture research. This would ultimately promote agro processing industries and allow other players to enter the market.
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Bakhresa Grain Milling, an agro processing subsidiary of Tanzania's billionaire Said Salim Bakhresa's group Bakhresa, offers a template. Bakhresa Grain has been operating in Rwanda for more than 15 years now, producing wheat products.
Another Tanzanian billionaire industrialist Mohammed Dewji last year said he would invest $100 million into Rwanda. Dewji owns METL, a food and packaging conglomerate with presence in 11 African countries.
The two established players showcase the growing appetite for cross-border business ventures.
"We plan to do joint agriculture research through an MoU on Agriculture Cooperation that will be signed in May," Makamba said, revealing that the two countries agreed to open a new border post along the Tanzania-Rwanda border to ease the movement of goods and people.
What is clear, there are a lot more possibilities for business communities than one would think. How fast these possibilities can translate into tangible actions depends very much on how quickly the two governments will get down to business.
