Trade

=Trade and Industry=



At the time of independence in 1962, Rwanda had a number of industries (limited to five) as well as some workshops (tapestries belonging to religious-based organizations). Breweries dominated both the position of job creation, quality of the final products and the contribution to treasury. After the independence, the sector covered fields of agro-industrial companies on base of coffee, tea, sugar, fruits’ transformation, pyrethrum and tannery. Also, the import substitution industries were introduced. The current generation of Rwandan industries includes chemical companies, building materials, printing offices, agro-industries, wooden products, textiles and service industries. Due to the 1990s war and genocide, many companies were destroyed and some of them have not recovered up to today. Most of them are located in urban zones and more than 65% are located in the city of Kigali with poor industrial decentralization in provinces. The outlet for the most of these companies is still limited to the local market and no competitive condition prevails. This situation forces government to intervene so as to stabilize the price despite its trade liberalization policy. The current government emphasized the promotion of a viable sector and has made adequate resources availability to comply with accepted standards. Nevertheless, private and public investments remain very low due to many factors such as low level of purchasing power, power (energy for industrial use) shortage, poor absorbing capacity of the funding resources, etc.

=__Rwanda's Trade __= Rwanda is one of the poorest countries in the world. Its economy is primarily based on agriculture; more than 90% of the population depends on subsistence agriculture. Agriculture contributes about 40% of the GDP and about 90% of the export revenues. Industrial sector is still in an embryonic stage and contributes about 20% of GDP. It is dominated by the production of import substitutes for internal consumption. The larger enterprises produce beer, soft drinks, cigarettes, hoes, wheelbarrows, soap, cement, mattresses, plastic pipes, roofing materials, textiles, and bottled water. The percentage of GDP by sector

Looking at the above figures, the agricultural sector’s contribution to the GDP declined as both the industry and services sectors rose. This situation reflects the reality that the two sectors are employing some of the people previously employed by the agricultural sector. According to the Ministry of Commerce, Industry, Investment promotion, Tourism, and Cooperatives (MINICOM), by the mid-1997, up to 75% of the factories functioning before the 1994 war had returned to production of which it was estimated to be 75% of the capacity. The privatization and investments in the industrial sector seems to mostly be limited to the repair of the existing plants and the retail trade increased as a result of many new small businesses established after the war end. From the end of the war through 1995, industrial sector received little external assistance. Since 1996/97, the government became increasingly active in helping the industrial sector to restore production through financial and technical assistance (loan guarantees, economic liberalization, and the privatization of state-owned enterprises). However, the sector continues to record a poor competitive trade except those in the export area (coffee and tea) and operate for the greater part below their production capacity. Many of the industries have a rather low rate of use of their production capacity and are almost exclusively turned to the domestic market. They depand strongly on the foreigners for their supply in raw materials. The sub-sector of the manufacturing contributes about 14% of the GDP and employs more than 10,000 persons. Coffee, tea and the milk are the main products of the agro-industrial sector, which show the future expansion and growth.