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RWANDA: REFORMING FOR GLOBAL TRADE: The experience of Rwanda Hon. Vincent Karega.

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Presentation on theme: "RWANDA: REFORMING FOR GLOBAL TRADE: The experience of Rwanda Hon. Vincent Karega."— Presentation transcript:

1 RWANDA: REFORMING FOR GLOBAL TRADE: The experience of Rwanda Hon. Vincent Karega

2 Outline 1) Where we have been: Recent past and challenges 2) Where we are: Ongoing reform efforts 3) Where we want to be: Strategic priorities for the future 4) Conclusion

3 1) Where we have been: Recent past and challenges faced Rwanda rising from history of civil strife and genocide halving GDP in 1994 to about $ 1bn and per capita income of $ 120. Rwanda rising from history of civil strife and genocide halving GDP in 1994 to about $ 1bn and per capita income of $ 120. Low per capita income estimated at $ 320 today Low per capita income estimated at $ 320 today Agriculture based economy with low levels of manufacturing and services Agriculture based economy with low levels of manufacturing and services Population growth rate of 2.6% per year Population growth rate of 2.6% per yearChallenges Rwanda has a high growth economy and must diversify to avoid slowdown Rwanda has a high growth economy and must diversify to avoid slowdown High energy costs High energy costs

4 Access to long term and flexible finance coupled with infrastructure constraints Access to long term and flexible finance coupled with infrastructure constraints Double deficit: Fiscal and Balance of Payments Double deficit: Fiscal and Balance of Payments Land locked status and distance from the sea translating into high transportation costs for the only available option (road) Land locked status and distance from the sea translating into high transportation costs for the only available option (road) Logistical trade barriers mainly at the regional level Logistical trade barriers mainly at the regional level Inadequate human and institutional capacity Inadequate human and institutional capacity Policy choice to rapidly transform Rwanda into the most competitive place for trade and investment in the region Policy choice to rapidly transform Rwanda into the most competitive place for trade and investment in the region

5 2. Where we are: Ongoing reform efforts Performance in Doing Business index flat over Performance in Doing Business index flat over 2007 and 2008: 150 th over 178 economies. Masks significant reforms across the board Trading across borders performance indicates improvements Trading across borders performance indicates improvements IFC/FIAS trade logistics project is partnering with us to further design and implement reforms in this indicator IFC/FIAS trade logistics project is partnering with us to further design and implement reforms in this indicator Trading Across Borders Doing Busi ness 20072008 Rank178166 Documents for export (number)149 Time for export (days)6047 Cost to export (USD per container38402975 Documents for Import (number)209 Time for import (days)9569 Cost to import (USD per container40804970

6 Time for Export Procedures in Rwanda in 2007: 47 Days 0 10 20 30 40 50 60 70 Assemble and Process Documents Pack goodsInland transportation Customs clearance Terminal handling activities Wait to load container Load Container 17 5 10 9 3 2 1

7 Trading across Borders Time for Import Procedures in Rwanda in 2007: 69 Days 0 10 20 30 40 50 60 70 Obtain bank- related documents Assemble documents Vessel time Berthing and Unloading Terminal Handling Activities Customs Clearance At seaport Customs Inspection In Rwanda Arrange for Inland transportation Waiting time At border Crossing Inland transportation Import Waiting 5 2020 2 1 4 5 5 15 2 10

8 On-going reforms Trade logistics working group in place co-chaired by RRA (Customs) and private sector federation, overseen by GoR/MINICOM Trade logistics working group in place co-chaired by RRA (Customs) and private sector federation, overseen by GoR/MINICOM Efforts to simplify and harmonize documents for international trade and align them to international best practice, within EAC and COMESA framework Efforts to simplify and harmonize documents for international trade and align them to international best practice, within EAC and COMESA framework Creating a more streamlined and integrated border management system ie Customs taking coordinating lead over other agencies (RBS, Minagri, public safety) Creating a more streamlined and integrated border management system ie Customs taking coordinating lead over other agencies (RBS, Minagri, public safety) Address identified Non-tariff barriers highlighted in Rwanda Private Sector Federation study along Northern and Central corridor e.g. multiple weigh bridges and police stops, long queues, poor infrastructure and inadequate computerisation, different working hours etc Address identified Non-tariff barriers highlighted in Rwanda Private Sector Federation study along Northern and Central corridor e.g. multiple weigh bridges and police stops, long queues, poor infrastructure and inadequate computerisation, different working hours etc

9 Aim to reduce number of days to export to 30 and 50 for imports over the next 12 months Aim to reduce number of days to export to 30 and 50 for imports over the next 12 months We are initiating self assessment in addition to implementing pre-clearance and prepayment of taxes and duties We are initiating self assessment in addition to implementing pre-clearance and prepayment of taxes and duties Channel allocation at the border e.g. consignments under the blue or green channel Channel allocation at the border e.g. consignments under the blue or green channel Risk management is being implemented and we aim to streamline it in order to maximize its potential. Further training of customs officers is required. Risk management is being implemented and we aim to streamline it in order to maximize its potential. Further training of customs officers is required. Promoting the use of a single administrative document as an information source for control over international trade activity. Promoting the use of a single administrative document as an information source for control over international trade activity.

10 Change-management within Customs to ensure measures in place are fully understood and applied Change-management within Customs to ensure measures in place are fully understood and applied Mobile scanners acquired for cargo inspection Mobile scanners acquired for cargo inspection Inspections can be done at point of exit rather than the dry port as previously done Inspections can be done at point of exit rather than the dry port as previously done Single payment point for customs, Rwanda Bureau of Standards (RBS), Magerwa (Customs warehouse) Single payment point for customs, Rwanda Bureau of Standards (RBS), Magerwa (Customs warehouse) Observations Observations For reforms to achieve objectives, businesses should be able to apply and take advantage of them For reforms to achieve objectives, businesses should be able to apply and take advantage of them Communication is critical and we look out for all opportunities to engage with business community to develop partnership for mutual benefit. Communication is critical and we look out for all opportunities to engage with business community to develop partnership for mutual benefit.

11 Where we want to be: Strategic priorities for the future Rwanda Vision 2020 requires consistent 7% real economic growth rate from 2000 to 2020 to become a middle-income country by the year 2020. Our aim today is to achieve double digit growth, and this is possible through rapid diversification, and fast tracked international trade, Rwanda Vision 2020 requires consistent 7% real economic growth rate from 2000 to 2020 to become a middle-income country by the year 2020. Our aim today is to achieve double digit growth, and this is possible through rapid diversification, and fast tracked international trade, GDP growth should be sustained to safeguard our prosperity, ensure employment generation, improving living standards and to build resilience to external shocks (such as recent Kenyan crisis and rising oil prices) GDP growth should be sustained to safeguard our prosperity, ensure employment generation, improving living standards and to build resilience to external shocks (such as recent Kenyan crisis and rising oil prices) Strategy is to concentrate on strong performers and engage private sector investment in: transport, logistics and ICT services (towards a redistribution and ICT hub), and financial services (toward a financial hub) Strategy is to concentrate on strong performers and engage private sector investment in: transport, logistics and ICT services (towards a redistribution and ICT hub), and financial services (toward a financial hub)

12 How do we intend to become a redistribution and ICT hub to maximize our competitiveness? Electronic single window which would serve as an information platform for stake holders in cross border trade. This would entail simplified documents consistent with international best practice, Integrated border procedures and computerisation Electronic single window which would serve as an information platform for stake holders in cross border trade. This would entail simplified documents consistent with international best practice, Integrated border procedures and computerisation In hand with above, introduce electronic payment system In hand with above, introduce electronic payment system One-stop border post and joint customs inspection within EAC One-stop border post and joint customs inspection within EAC Rwanda is engaged in regional integration with EAC given implication on trade Rwanda is engaged in regional integration with EAC given implication on trade

13 Actively involved in negotiations with EAC partner states to address international trade issues: Rwanda to join customs union in 2009, and negotiations for common market launched, Actively involved in negotiations with EAC partner states to address international trade issues: Rwanda to join customs union in 2009, and negotiations for common market launched, Building a much more modern international airport with better handling capacities and services. Its preliminary studies complete Building a much more modern international airport with better handling capacities and services. Its preliminary studies complete MOU signed to extend oil pipeline from Kampala to Kigali with participation of Libya MOU signed to extend oil pipeline from Kampala to Kigali with participation of Libya Establishment of the Free Trade Zone and industrial parks Establishment of the Free Trade Zone and industrial parks Establish full scale risk management that has successfully been piloted Establish full scale risk management that has successfully been piloted

14 Conclusion The Rwandan government has set in motion a comprehensive package of reforms and is committed to sustain this momentum. The Rwandan government has set in motion a comprehensive package of reforms and is committed to sustain this momentum. Rwanda is privileged to be a beneficiary of the IFC FIAS Trade logistics project and their partnership with us in this reform process. We commend the recent trade logistics advisory mission to our country in early April 2008 and the work done so far. Rwanda is privileged to be a beneficiary of the IFC FIAS Trade logistics project and their partnership with us in this reform process. We commend the recent trade logistics advisory mission to our country in early April 2008 and the work done so far. There is need to see beyond trade logistics for an integrated approach (supply side, infrastructure, storage, standards and speed) There is need to see beyond trade logistics for an integrated approach (supply side, infrastructure, storage, standards and speed) We are committed to continue to coordinate the national reform taskforce and we look forward to better donor coordination in this respect to ensure synergies and coherence. We are committed to continue to coordinate the national reform taskforce and we look forward to better donor coordination in this respect to ensure synergies and coherence.

15 Come see Rwanda by yourself Come see Rwanda by yourself THANK YOU


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