Rwanda:Government moves to revive manufacturing, hospitality sectors

By Jean d’Amour Mbonyinshuti

Rwanda’s Prime Minister Édouard Ngirente
Rwanda’s Prime Minister Édouard Ngirente

Rwanda’s Prime Minister Édouard Ngirente on Thursday said the government could inject another 250 billion Rwandan Francs to revive manufacturing the sector as well as tourism and hospitality among other sectors that were hit hard by the COVID-19 pandemic.

The premier Ngirente was updating both chambers of parliament on the current status of manufacturing industry and plans to support it further.

Ngirente told the legislators in a virtual meeting that the manufacturing fell by 19 per cent due to the pandemic causing a loss of 7,401 jobs in agro-processing, 13,000 in mining, and 2,644 in energy.

The government had earlier injected 100 billion Rwandan Francs in the economy recovery fund of which 75 billion Rwanda Francs were disbursed at low interest rates according to the premier.

The economic recovery fund was established to support the recovery of businesses severely affected by COVID-19 so that they can quickly resume operations and safeguard jobs.

The fund was initially launched with 100 billion Rwandan Francs and is to be expanded to 350 billion francs by the end of the 2021.

Sectors targeted by the Economic recovery fund (ERF) includes but not limited to tourism and hospitality, manufacturing including agro processing, education, transport and logistics and SMEs linked to domestics and global supply chain.

“Businesses negatively impacted by the restrictions put in place to prevent the spread of the virus, or exposed to consumer discretionary spending, and those with global supply chains that have been disrupted are eligible to apply for the support provided by the Economic Recovery Fund,” said Premier Ngirente.

“The Manufacture and Build to recover Program aims to fast track private sector investments in manufacturing and construction. It will play a big role in reducing the cost of setting up industries of key essential products as well as facilitating the expansion of small and medium industries,” he added.

The target, according to Premier Ngirente is to inject 350 billion Rwanda Francs by the end of the year 2021, meaning that a total of 250 billion Rwandan Francs will be added in the remaining period.

The manufucturing sector has received 955 billion Rwandan Francs so far more will be added to revive the sector, according to the Premier.

The manufacturing sector is much needed in the country given it employed a total of 708,796 people equivalent to 20 per cent of the country’s workforce that by 2020, according to Ngirente.

The country also exported products from the country’s factories that totaled $760 million.

Since 2018, manufacturing industries have been the second contributors to the tax base (after general business) to a tune of 16.5 per cent. In 2019/2020, industries contributed Rwf233bn from Rwf195bn in 2017/2018.

This indicates a 20 per cent increase. Industries have developed other areas like agro-processing, banking, insurance, advertising etc.

There are 962 factories in Rwanda including 569 equivalent to 59 per cent which is into agro-processing, 47 others equivalent to five percent are into construction materials, 346 of them equivalent to 33 per cent are into general products.

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