RWANDA:

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

2. Outline • Where we have been: Recent past and challenges • Where we are: Ongoing reform efforts • Where we want to be: Strategic priorities for the future • 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. • Low per capita income estimated at $ 320 today • Agriculture based economy with low levels of manufacturing and services • Population growth rate of 2.6% per year Challenges • Rwanda has a high growth economy and must diversify to avoid slowdown • High energy costs

4. Access to long term and flexible finance coupled with infrastructure constraints • 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) • Logistical trade barriers mainly at the regional level • Inadequate human and institutional capacity • 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 2007 and 2008: 150th over 178 economies. Masks significant reforms across the board • Trading across borders performance indicates improvements • IFC/FIAS trade logistics project is partnering with us to further design and implement reforms in this indicator

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

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

8. On-going reforms • 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 • 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

9. 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 • 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. • 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 • Mobile scanners acquired for cargo inspection • 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) Observations • 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.

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, • 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)

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 • In hand with above, introduce electronic payment system • One-stop border post and joint customs inspection within EAC • 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, • 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 • Establishment of the Free Trade Zone and industrial parks • 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. • 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) • 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 • THANK YOU