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RWANDA: Government to inject another Rwf150 billion in manufacturing

Nasra Bishumba with The New Times Rwanda

In a bid to revive the manufacturing, the government plans to inject at least Rwf150 billion into the sector by the end of this year, Prime Minister Édouard Ngirente, said on Thursday.

Ngirente said this during his appearance before members of both chambers of parliament where he provided an update on the current status of the sector during the Covid-19 crisis and the plans ahead.

During the virtual session, Ngirente told the legislators that the manufacturing industry was one of the sectors hit the hardest by the pandemic, falling by 19 per cent.

As a result, productivity slumped and 7,401 jobs in agro-processing, 13,000 in mining, and 2,644 in energy were lost.

The plan

Ngirente shed light on the Rwf100 billion injected in the economic recovery fund, saying that at least Rwf75bn has already been disbursed at very low-interest rates.

“We are going to continue injecting money into this fund and we expect that money to be Rwf370 billion by the end of this year. That means an additional Rwf250 billion is being sourced,” he said.

Ngirente said that at least Rwf955 billion had gone to manufacturing but more will be added to revive the sector.

The extra Rwf150 billion will be invested in industries that are into construction and the others, he said.

He reminded that in the area of construction, the industry’s performance had fallen by 6 per cent due to the pandemic.

Performance reference

Ngirente reminded the lawmakers that the contribution of industries to the GDP between 2017 and 2020 before Covid-19 struck rose from 17 per cent to 19 per cent.

“This was an indication that our prior plan to get to 19.4 per cent by 2020/2021 was close. This was made possible through the implementation of our plan to advance both local and international investments,” he said.

He attributed the performance to industrial parks which he said played a major role in creating jobs for many Rwandans.

“By 2020, a total of 708,796 people equivalent to 20 per cent of the country’s workforce was employed by the manufacturing sector,” he said.

He also praised the sector for playing a very significant role in generating foreign currency, pointing out that in 2020; Rwanda exported products from the country’s factories that totalled $760 million.

Since 2018, industries have been the second contributors to the tax base (after general business) to a tune of 16.5 per cent. In 2019/2020, industries contributed Rwf233bn from Rwf195bn in 2017/2018.

This indicates a 20 per cent increase. Industries have developed other areas like agro-processing, banking, insurance, advertising etc.

In mining, he said that the government has worked on value addition of the minerals and this improved their income generation from $180m in 2017 to $730m in 2020.

He also pointed out that in 2020, production of Made in Rwanda cement came to 455,000 tonnes as compared to 320, 000 tonnes in 2017, a 41 per cent increase.

MP Christine Mukabunani requested the Premier to look into the public outcry on bank auctions that said were taking of Rwandans’ vulnerabilities during the pandemic.

“There is a public outcry out here about the banks auctioning property and the undervaluing of this property in the sale process is worrying. How can a bank sell property because someone has failed to service the last 5m on a 100 million loan? The government needs to protect its citizens on this,” she said.

About factories

There are 962 factories in Rwanda. Of these, 569 equivalent to 59 per cent are into agro-processing, 47 others equivalent to five percent are into construction materials, 346 of them equivalent to 33 per cent are into general products.

283 of these factories started their operations between 2017 and 2020.

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