The Managing Director of the International Monetary Fund, Christine Lagarde says regional integration could work miracles in diversifying Rwanda’s exports and end the country’s trade imbalances.
“While export diversification hinges on successful access to markets, for a landlocked economy such as Rwanda, regional integration is a potent instrument to tap into bigger markets and products,” Lagarde said.
While addressing Rwandan lawmakers Tuesday afternoon, she said, “Rwanda has to open up and reach out its neighbours for its export oriented businesses to innovate and flourish.”
lagarde said deeper engagement in the East African community would allow Rwanda benefit from regional infrastructure projects in key areas including; power generation and transportation. “
“These steps are surely critical in unlocking Rwanda’s growth potential,” said Lagarde.
According to the Ministry of trade and Industry report, 41% of Rwanda’s exports went to Europe,21% to East Africa,16% to Asia and Australia,14% to DRCongo while the Americas, Other Africa and the Middle East follow with less than 5%.
The report says imports rose to 8.6% and exports by 5% between January and November 2014, showing a big trade imbalance.
Rwanda’s traditional exports like tea, coffee and coltan are blamed for the exports decline, their overall performance registered an increase in volume at the international market though the prices declined.
For example, coffee’s value was 50,127,056 and volume was 18,197,273 in 2013 causing 11.9% change in export value in 2013, compared to its 56,101,963 value and 15,096,699 volume in 2014 which caused a -17.0% deficit in exports.
Rwanda trade Minister Francoise Kanimba says that 2015’s exports outlook is promising following a vibrant mining sector.
“Though mineral prices declined by 23%, there is hope for improvement if mineral prices don’t go down,” says the Minister.
Rwanda mainly exports traditional exports like tea, coffee and minerals including coltan, casseterite.
Rwanda also hopes to improve export revenues through non-traditional exports like pyrethrum, hides and skins and horticulture.
Lagarde mentioned mentoring household enterprises and small and medium sized businesses, improving hands-on skills as the right direction towards economic freedom.