Govt prioritises 6 agricultural products to reduce trade deficit
The Ministry of Trade and Industry has said that they are prioritising agro-processing for six products; sugar, aquaculture, edible oils, rice, fertilizer and maize so as to recapture the domestic market and lower the imports.
Sam Kamugisha, the Director-General for Industry at the Ministry of Trade and Industry, said that the efforts are part of a Made-in-Rwanda policy instituted in 2017 to drive the recapturing of the domestic market.
The strategy focuses on government intervention on certain clusters and value chains, in which Rwanda may feasibly achieve global competitiveness.
Priority in processing sugar, fertilizer, edible oil, dried fish, maize and rice could save the country $112 million (approx.Rwf104 billion) annually, the ministry says.
In an interview, Kamugisha said that there are efforts to add value to other different agricultural products.
She cited Community Processing Centres (CPCs) including the current six for leather, dairy, Irish potato, wood, ceramics and honey.
“We target value chains. For instance meat and leather value chains have been targeted through sector-specific strategies. The Internal trade team of ministry is working on the development of Rice, Cassava and Maize value chains,” he said.
While promoting agro-processing, the construction of feeder roads to connect farmers, markets and agro-processing industries remain in focus, he noted.
Raising quality and standards
The official explained that Zamukana Ubuziranenge Program, is the initiative established to provide technical assistance in support towards quality standards for agro-processing units especially for Small and Medium Enterprises.
He said that support is set to be provided to local food-processing firms to access HACCP certification.
Hazard Analysis and Crititcal Control Points (HACCP) means a product is safe, indicating that the consumer are not at risk of health complications.
“The opening of new international hotels in Rwanda has created potential source of demand for local food producers. However, these hotels have international standards on food safety and quality, requiring HACCP certification – an internationally recognized set of standards that most local firms do not have. The Government has and continues to support various potential suppliers to these hotels through training and workshops aimed at equipping them with the tools and systems for them to maintain the required standards certification,” he said.
The official said that standards certification is a key driver in promoting the exports.
Ailing agro-processing factories
Despite the growth in the industrial sector, there are factories that are launched and later halt their operations due to various factors.
For instance, reports indicate many factories that had been struggling which led to their closure.
For instance, 34 large and medium sized agro-processing plants closed shop between 2016 and 2019, leading to undesirable consequences on the entire agricultural value chain.
Some examples include the stalled wheat factory, Gitare Mills in Nyamagabe District, Kinazi Cassava plant that was found to have challenges in machinery and equipment, Kitabi Mills in Nyamagabe District.
Other examples include Rwanda Agribusiness Industries (RABI), the Huye Based Food Processing Plant that closed operations, Skins and Hides Processing Plant called “Tannerie de Huye” that few years in Huye District while those that are operating are producing below capacity.
The Ministry of Trade and Industry says that most of the local industries are still operating at 50 per cent of their required production capacity.
Kamugisha said that MINICOM has recently started ground work to investigate these closed industries case by case.
“We investigated the ailing factories and then in a customized manner, the ministry is providing necessary support to them including technical up-gradation, takeover of the company by an entrepreneur of higher capability, facilitating the firm to enhance health and safety standards to access international markets etc,” he said.
Increasing agricultural productivity
Teddy Kaberuka, an economist, said that those who design business plans for the factories distance transformation from production which lead to difficulty in operating.
“Transformation and production must be together in the business plan. It is a mistake to set up a factory, install machinery and wait for supplied raw materials (agricultural produce) yet you do not know where they will come from,” he said.
Investors also need to invest in agricultural production by supporting farmers in farming and later supply you as well as setting up collection centres gathering the produce needed in transformation by working with farmers cooperatives to supply quality produce. Failing to do so lead many factories to operate at 40 per cent of their required production capacity, he explained.
Eugene Kwibuka , the Agriculture Information and Communication Programme Manager at the Ministry of Agriculture and Animal Resources said that to boost agricultural productivity there is need to develop new high yielding and tolerant crop varieties.
“In order to boost agricultural productivity to satisfy transformation factory, there is need of developing new high yielding and tolerant crop varieties, producing improved seed locally and reduce reliance on imports, increasing of irrigated area and soil protection as well as promoting land use consolidation,”
He added that adopting improved technologies to increase productivity on small plots through Green houses, Hydroponics, and small-scale drip irrigation are paramount adding that technologies to reduce post-harvest losses have been prioritized in the recent agricultural policy and the 4th Strategic Plan for Agriculture Transformation.
