Last week, the Ministry of Trade and Industry officially launched the “Made in Rwanda” policy which is set to contribute to the country’s efforts to reduce its trade deficit and upscale local manufacturing.

The Made in Rwanda Policy is a holistic road map aimed at increasing competitiveness by enhancing the country’s domestic market through value chain development.

It is a result of the ‘Made in Rwanda Campaign,’ which started in 2015, as a core component of the Domestic Market Recapturing Strategy (DMRS). The policy seeks to effectively involve all stakeholders and clarify their role.

It is expected to bring together existing government interventions under a clear policy framework and address remaining supply side bottlenecks through targeted interventions aimed at improving quality, boosting cost competitiveness and linking anchor firms within domestic value chains and developing action plans for specific value chains.

Trade deficit

Since the launch of the campaign in 2015, Rwanda’s total exports have increased by 69 per cent, from nearly $559 million in 2015 to nearly $944 million in 2017. Total imports decreased by four per cent, from nearly $1.849 billion in 2015 to a little more than $1.772 billion in 2017.

This current trade deficit means more needs to be done to produce more for export to earn more revenues that can meet our import bill. It will also do more to double local production of primary products and commodities that can be consumed locally, which can help reduce pressure on our import bill.

Ideally, the import bill should be composed of heavy capital equipment, sophisticated goods and services that can not be manufactured locally in the short-term.

Indeed, while the import bill is still dominated by capital goods for investment, there is a need to boost local production for local consumption in particular of basic items that ordinary citizens consume regularly.

This includes intensifying production of primary commodities including food and raw materials. However, currently due to regional integration, we still import primary commodities, which may sometimes arrive cheaper than products produced locally.

This requires a radical shift in how local businesses are facilitated including providing them with subsidies that can reduce the cost of production to allow them to produce competitively.

Create opportunities

The government has to create more opportunities for local entrepreneurs to market and sell their products as the general public is sometimes not aware of the fact that some locally produced products are of better quality.

So part of the campaign to boost “Made in Rwanda” has to aim to change mindsets about the negative misconceptions about locally-produced products, which are sometimes unfairly accused of being of inferior quality.

The upcoming “Made in Rwanda” exhibition organised by the Private Sector Federation is a step in the right direction, but more efforts are needed to boost both local production and consumption.