OPENING SPEECH FOR MADE IN RWANDA VALIDATION WORKSHOP MARCH 24TH 2017, AT MINEACOM
MARCH 24TH 2017, AT MINEACOM
Distinguished members of the Rwandan leadership
As you know, the Rwandan economy is under pressure. The trade deficit remains high. In the past many years, we have been working to reduce it, and I am happy to note that in 2016 we are finally seeing a reduction – things are moving.
Part of this success is down to the Made in Rwanda campaign and the efforts GOR has put into promoting consumption of local goods. We soon realised that Made in Rwanda had the potential to be so much more than just a media campaign. Especially, we saw the huge potential for achieving our results if we partnered more with the private sector, and focus on combining efforts to achieve greater things than we could do alone.
Therefore, in the last couple of months in MINEACOM we have been working on a new approach, which has been developed in close partnership with both GOR and private sector stakeholders - the highlights of which I am happy to share with you today. It is a new approach that I believe will enhance the partnership between the public and private sectors for industrial growth and economic transformation. It is what we call the Made in Rwanda Concept, which moves beyong the realms of media campaigning and into actual policy interventions that will support our private sector address key supply-side bottlenecks.
Firstly, the MIR approach is about changing mind-sets. In Rwanda there is an unfortunate tendency to think that just because something is produced locally, it must be of lower quality. I can assure that this is not the case. We may be a developing country but we have many companies who are capable of producing high-quality products at affordable prices. We will therefore continue to educate our consumers about the good quality that is available locally at affordable prices.
As Government we also have to lead the way in addressing this mind-set challenge and procure locally whenever we can. MINEACOM has together with MINECOFIN and RPPA in the past year been reviewing the Public Procurement Law, amending it to award preference to local producers. When the general public sees that the government is buying locally, they will follow. This Law has now been sent to parliament for approval and will be implemented very soon – it is therefore one of the first achievements of this Policy.
We cannot ignore the fact that many of our companies have challenges when it comes to quality. To address these, we need to boost our institutional setup for standards and inspection, while also partner with the private sector to increase awareness, understanding and appreciation of importance of standards – and to make sure that we have the right testing facilities when they come asking for certification.
Quality comes at a cost, and achieving price competitiveness is another key aspect of Made in Rwanda. Therefore, the Made in Rwanda Policy looks at the various cost drivers that negatively affect Rwandan competitiveness. Here, we are talking about making a firm commitment to keeping electricity and water tariffs in line with regional levels; we’re talking about access to raw materials, affordable serviced land and working capital; we’re talking skills development; and improved technology for resource efficient production. All of these components carry cost implications for domestic production which needs to be addressed.
The fourth pillar of the MIR policy looks at promoting backwards linkages to the local economy and this for me a key component. Globally, it is clear that the best way to boost the competitiveness of local companies is to link them to supply contracts from international firms and big investors. We have many international investors in Rwanda who are looking to source locally as long as their requirements are met. We therefore need to support local companies access these supply contracts as quickly as possible, to allow them to learn and upgrade their production to international standards. This point also goes in line with supporting local companies access public procurement which I mentioned before.
Finally, the MIR Policy calls for sector-specific action plans which address all parts of a given value chain. Some of the cost drivers I mentioned above have sector-specific aspects – especially skills and the cost of complying with government regulation. We have identified a number of priority sectors for which we have already started implementing such value chain approaches. The first one is the textile, garment and leather sectors, for which an action plan was approved in April last year and is already far into implementation – addressing infrastructure, skills and policy aspects alike. The next sector plan we’re working together with the private sector and other government stakeholders on is the meat value chain, which incidentally will feed into existing work we’re doing to promote leather products. In fact, just last week together with private sector and MINAGRI we established the Rwandan Meat Value Chain Platform and we are developing an action using this platform to address the sector-specific constraints faced by the operators in that sector.
So let me end on this note, and pass the mic to my DG who will take us through the details of the policy. I look forward to a good discussion and to hear your proposals for how you may support the effort to boost the competitiveness of products that are made in Rwanda.