Rwanda Foreign Trade

Rwanda Foreign Trade

The Foreign Trade Rwanda recorded a high import surplus. The export products include, in addition to the traditional export goods coffee and tea, the mining products cassiterite, tungsten and colombo tantalite (coltan). Despite increasing exports, there is regularly an enormous trade deficit, which according to various estimates is around 1500 million US $ annually.

According to homosociety, imports to Rwanda are dominated by capital goods, machinery and vehicles, followed by food, chemical and intermediate products. Significant trade barriers exist, on the one hand, in import duties (from 25% for various finished goods to 100% for luxury products (exceptions apply to COMESA countries), no import duties are levied on certain capital goods. On the other hand, there are severe technical deficiencies in the logistics of border clearance (no cold stores at customs etc.).

The inland location in central East Africa and the lack of a railroad are major economic obstacles for Rwanda. 9/10 of foreign trade are carried out by truck. The two transport corridors via Kampala in Uganda to Mombasa and through Tanzania to the port of Dar es Salaam are the only accesses to the Indian Ocean. The resulting high transport costs make the prices for the import and export products significantly more expensive.

In order to counteract the trade deficit, the government is trying to initiate new export promotion measures in addition to promoting existing export products. The plan originally developed for this purpose to set up a classic free trade zone turned out to be flawed. Instead, the focus has been on the establishment of a “Special Economic Zone”(SEZ) directed. It is about a specific commercial area, which is equipped with modern infrastructure and overall with the best possible framework conditions. These efforts aim to encourage investment, with an emphasis on manufacturing industries that process local products for the regional market. The project is financed through a joint venture between the government, which has a 30% stake, and private companies.

Rwanda’s main trading partners are China, Kenya, Uganda, the Democratic Republic of the Congo, Great Britain, Germany, Belgium and the USA.

Rwanda’s membership of the East African Community (EAC), which has existed since 2007, is increasingly having an impact on the regional exchange of goods. Above all, increasing imports from member countries with stronger industries can be observed, especially from Kenya.

Foreign exchange regulation is largely liberalized. The import of foreign currency is unlimited, the export is possible up to high limit amounts.

German economic, development and aid organizations in the country

Since 2001, Rwanda has been one of the priority partner countries of the Federal Ministry for Economic Cooperation and Development. Numerous projects were implemented during this time. The Rwandan-German development cooperation is currently focused on the key areas of decentralization and sustainable economic development (private sector development and training).

At the beginning of June 2013, the Federal Minister for Economic Cooperation and Development, Gerd Müller, paid an official visit to Rwanda.

In addition to the implementing organizations GIZ (German Society for International Cooperation) and CIM, the KfW development bank is now constantly represented on site. GIZ is also active in the work of the Civil Peace Service on site. The Sparkassenstiftung is also active in microfinance.

Economic relations between Rwanda and Germany have long played a subordinate role. The few German commercial enterprises that have previously been active on the Rwandan market have limited themselves to the trade sector or have carried out infrastructure projects. The main trading products are machines from Germany that are exported to Rwanda and coffee and tea are delivered in the opposite direction. The contribution to the respective total volume remains negligibly small.

At the beginning of 2018, the car group Volkswagen, the first major German company to register in Rwanda. The company presented investment plans that represent a vision for the future in the African context. VW is currently building a plant in the capital Kigali, in which small vehicles and medium-sized SUVs will be built in the future. In the long term, VW intends to produce electric vehicles in Rwanda. Furthermore, activities are to be expanded to include the “Mobility” division (car rental, car sharing, etc.).

In this context, the cross-divisional initiative ” Moving Rwanda ” arose. In cooperation with the Federal Ministry for Economic Cooperation (BMZ), Rwandan partners, as well as with the other major German companies Siemens and SAP as well as the medium-sized company Inros Lackner, a digital traffic concept with a focus on on the mobility and training of skilled workers in Rwanda. The initiative was launched on February 28, 2018.

In the field of cultural cooperation, Deutsche Welle (DW) operated one of its few shortwave relay stations in Kigali for almost 40 years until March 2015. The colonial residence of the first German General Resident (Kandt House), Richard Kandt, was renovated and officially opened as a small museum for visitors in April 2004. The Goethe Institute is present in the capital Kigali with a small team.

The partnership between Rhineland-Palatinate and Rwanda has existed since 1982. The unique form of decentralized, citizen-oriented development cooperation geared to the basic needs of people creates a framework for citizens, communities, church institutions, associations and other social groups in both countries to meet.

Today over 450 initiatives and Rwanda groups in municipalities, cities and counties as well as over 240 schools and universities have established relationships with partners in Rwanda. Since the beginning of the partnership, more than a thousand grass-roots small projects have been carried out in Rwanda to help people help themselves, to provide basic education and to fight poverty.

Rwanda Foreign Trade

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