Rwanda government has assured the public that there is an important reason why influx of goods to and from Uganda did not follow reopening of the borders between both countries early this year.
On January 31, 2022 the Gatuna One Stop Border Post officially reopened, three years after it was closed in February 2019, and in March, all land borders with neighbours including Uganda, were reopened.
Leave alone the second date of March, on January 31 Rwandans expected to see right away on local market some brands of beverages or hygienic products, food items and others from Uganda.
However, there is still not much coming from the neighbour from the North todate.
During a press conference, on May 18, Prime Minister of Rwanda Edouard Ngirente said that a set of mechanisms had to be put in place before resumption of business with Uganda.
He said that when trade with someone stops momentarily, new developments arise.
“In our case, even though we were still trading with other neighbours in the East African Community, we also developed capacity to produce what we used to import from Uganda.”
Following re-opening of the borders, said the Prime, we found it important to revisit procedures. Currently, importers have applied for new licenses which are under review.
The Prime Minister said, that having acquired some products domestically, the country will have to put in place certain standards that will inform which products from Uganda might be allowed in to compete with local products.
There is no specific timeline when the import from Uganda will start, but the Prime Minister said, “It is really very soon.”
This press conference was basically meant to update the media on economic condition of the country which is under shock of two current events.
Prime Ngirente indicated that the price hikes was as a result of economic shock caused by COVID-19 and the war in Ukraine which improvised as the pandemic was slowing down.
The war in Ukraine, he said, first brought an imbalance between demand and supply but also caused some hoarding.
On the alternative sources of supply of the products after the Russia’s export restrictions, the Prime Minister mentioned two new sources of the wheat including Brazil and Australia.
“Of course the cost of the shipment has slightly increased, but we still get the same quantity we used to enquire,” he said.
Also being affected during this shock is the price of cooking gas which actually brought in government intervention with regulation to try and avoid huge speculations.
The Prime Minister said that the background of regulation is as a result of positive response of the community to the government program to reduce firewood and charcoal as a source of cooking energy.
“Initially, we were not regulating the sector which included less than 1% consumers, but with many people responding to the National Strategy for Transformation 1 where we intended to reduce firewood and charcoal as source of cooking energy, many people entered into gas import,” he said.
“In the process, we could realise that this business took shape before we could have enough infrastructure required. For example, we cannot afford to make reserve for more than five days.”
The Prime Minister however said, that the country is seeking midterm solution by involving private operators who will construct gas storage facilities.
“Currently we import and sell which actually hampered regulation of the sector,” he said.
Comparing gas with petroleum products, Prime Minister said that the latter is successfully regulated because it has got enough storage facilities and its formula is working seamlessly.
“The gas has also become our preoccupation. We shall have clear gas regulations within six months when infrastructure will be available,” he said.
In this issue of import, a journalist sought to know how the country is planning to bring in cargo planes, “which may solve transport issues on our landlocked motherland.”
The Prime Minister responded that actually, cargos can only serve for specific transport of products, “but no country, even big economies can rely on cargos for its transport-the sea, the ship is way cheaper, and thus, the trucks,” he said.
“Yes we shall soon bring cargos, but we are also working with our importers encouraging them to bring more and more trucks. We have been lagging behind in terms of trucks in this region, but we are improving. Our traders are no longer connecting Kigali to Dar es Salam only, but they can go as far as Zambia.”
In the long run, the project in pipeline of the standard gauge railway which will link Rwanda to the regional countries is expected to complete these efforts.
Meanwhile, from the increase of prices, a journalist asked a specific question on how Rwanda would possibly increase the salary of some members of the working community including teachers and grass root leaders.
The Prime Minister said that on a general perspective, salary increment is decided when commodity price increase is quite big and is likely to span on a long period of time, “but, are experiencing a shock, not a crisis. We hope that next year, we shall see a decline of prices.”
The prime Minister however, said that particularly, teachers will benefit a year on year 10% increment. Local leaders at cell level will also benefit some increment.
“More will be done to uplift a teacher in addition to that salary increment. It will not take that long to see these changes working,” the PM said.