The government has recently begun implementing a law that was passed in November 2019.
The law requires all importers and manufacturers of foods and pharmaceutical products to have paid a one per cent charge on the value of all their products and registered every branded product by March 31.
The regulation, which is implemented by the Food and Drug Authority, a relatively new agency, has sent shock waves across the market, with traders up in arms against the government, calling the charge unreasonably high.
The tariff, which is supposed to paid lumpsum to cover the next five years, is meant to cater for costly laboratory tests and registration process, says FDA.
Food and pharmaceutical products cover a wide spectrum of imports but most critically constitute the most sensitive range of products in the country.
Besides the concern that this charge will push up the already high cost of consumer goods, it is feared that some importers are likely to stop importing some critically needed goods, for example, pharmaceutical products.
Most of the importers say that much as FDA informed them about the required registration process, they were never consulted about the charge, which many say took them by surprise.
Some importers will have to pay as high as $2,500 for one product, while some manufacturers will part with as high as Rwf1 million ($1,070) for one product, which is obviously untenable, especially for those like pharmacies and Simba Supermarkets manufacturing or importing a wide range of branded goods.
Although the whole registration process comes to serve an important function of weeding out counterfeit drugs and consumer products, it should not happen in a way that disrupts the market.
The fees should have been established in close consultation with the relevant authorities like PSF and the traders themselves.Since this was left out, all parties will work backwards, which will eat into the import timelines.
PSF also came out against the charges, saying they are excessive and are likely to have a negative effect on the market and the public.
Besides revising these tariffs, the government should consider easing payment of these fees, say, by oming up with a payment plan spread out in the five years.
Charges like these should also be introduced after conducting an indepth study, such that the government makes a decision based on data especially about the possible effect of such a regulation, and how it can deal with the possible consequences.
Through the Made in Rwanda programme, the government has been building the capacity of local manufacturers, while encouraging people to consume locally made goods, but a regulation like this is counterproductve, resulting in inhibiting local manufacturers because many can't afford these charges.