Industry and mining
Rwanda’s industrial development still has a long way to go. Rapid development is hampered by a number of factors: the lack of capital and skilled workers, the lack of a sufficiently receptive internal market, the inadequate expansion of the infrastructure, e.g. the transport network and electricity production, and the remote internal location, which results in very high transport costs.
According to franciscogardening, the industry of Rwanda focused mainly on the processing of local agricultural products, other industries include the manufacture of simple agricultural tools such as hoes. Machetes, the production of building materials such as cement, building blocks, pipes, etc. as well as the production of everyday items such as hygiene articles, textiles, furniture, etc.
The largest industrial employer is a brewery (Bralirwa) in Rubabu, a subsidiary of the Dutch multinational “Heineken”, which held a monopoly for years. With the entry of Skol International ltd. In 2012, there is a second provider on the market. Both companies play an important role in everyday life in Rwanda and contribute significantly to the state budget through taxes.
The mining plays with the extraction and processing of tin ore, tungsten ore and Coltanerz, especially for export, an important role.
Contrary to the widespread information in the media that Rwanda is enriched by the export of conflict minerals from the neighboring Democratic Republic of the Congo, Rwanda has its own resources. Strategic metal ores with high global market demand – such as tin, wolframite and tantalite (coltan) – are not available on a large scale as in neighboring DR Congo, but are available in economically profitable quantities. With the support of German development cooperation, certification methods developed to ensure the origin of the traded ores. A certificate of origin is required by law for the export of minerals. The export of mineral raw materials generates the second highest income in the country after the tourism sector, ahead of the sale of agricultural products such as coffee and tea.
Energy-and water supply
The energy sector remains the most worrying bottleneck for the country’s economic development. A large part of the energy demand, which is mainly used for cooking purposes in rural households, is covered by the traditional fuels wood and charcoal.
Around 50% of the population has access to electricity, but most of it is only enough for lighting purposes. The country’s total electricity production is insufficient at just 225 MW (as of early 2019). This is mainly generated from hydropower, both by medium-sized state – owned companies and by micro-systems, some of which are privately operated. Approx. 15 MW are imported from the joint hydropower plants (Rusizi I and II), which in addition to Rwanda also supply the neighboring states of Burundi and Congo with electricity. In order to counteract the energy shortage, the company responsible for electricity and water supply, Rwanda Energy Group “REG” (formerly EWASA or even earlier Electrogaz) additionally purchased emergency power diesel generators – a short-term solution, because the oil products required for operation are brought from the Indian Ocean over long distances and poor roads and are accordingly very expensive (a liter of petrol or diesel costs the equivalent of just under EUR 1).
A further complicating factor is the fact that the lake water level at the production facilities (Kivu Lake, Bulera-Ruhondo) fluctuates due to excessive use and / or climatic changes. At the same time, the energy demand is growing due to the growth of cities and the economic boom. Electricity is therefore switched off alternately in network areas from time to time.
The government has made energy generation a priority and is proceeding with a correspondingly aggressive strategy. The highly ambitious goal is to increase the current total capacity to 560 MW by the end of 2020, which means more than doubling the capacity in just two years.
The methane gas contained in Lake Kivu from volcanic activity represents a potential. The available reserves are estimated at 60 billion cubic meters. This natural gas has been used since 1983 as part of a pilot project to generate energy for the BRALIRWA brewery in Rubavu (formerly Gisenyi). A first run of methane gas 2 MW power plant has been running since 2010. Another 25 MW power plant (formerly Kibuye) in May 2015 Karongi officially inaugurated. The worldwide unique methane gas project KivuWatt, which – in cooperation with the American company ContourGlobal – did pioneering work, took around seven years to develop. Further plants of this type are to follow after consultation with the neighboring state of the DR Congo, which is also adjacent to Lake Kivu.
In addition to methane gas, other energy projects, in addition to the construction of new hydropower plants, rely on various existing potentials such as geothermal energy, solar energy, peat deposits and biogas.
Access to drinking water supplies is also insufficient. Due to the high rainfall, the country has sufficient water reserves, but the construction of drinking water pipes for the rural population is difficult and expensive because of the hilly terrain of the country. There is only a few new building areas with public sewage disposal. Only a very small proportion of households have regulated private wastewater disposal.
Due to the lack of industrialization in Rwanda and insufficient agricultural land, local handicrafts play an important role in the provision of jobs. In the cities and in rural areas there are already a large number of small craft businesses, especially carpenters, locksmiths, bricklayers and tailors, who produce at a very low technical level. The reasons for this are the still inadequate level of training and the lack of capital for the procurement of high-quality handicraft tools.
Another problem for the Rwandan handicrafts is the limited local market. The purchasing power of the Rwandan population is too low to stimulate the handicraft sector through high domestic demand. The export of craft and industrial products is often not profitable because of the high transport costs.