Manufacturing
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Overview
In line with National Strategy for Transformation (NST1) 2017-2024, the industrial policy prioritizes inclusive economic growth, job creation, and private sector-led development with a focus on high-value intensive agriculture and agro-processing, manufacturing, tourism, and knowledge-based services and ICT.The manufacturing sector grew by 8% for the fiscal year 2017/18 from 6% in the previous financial year (Source: NISR Annual Economic Report, January 2019). The sector is still small, but it has been growing steadily. Since the adoption of the National Industrial Policy in 2011; several critical policy interventions and strategies have been developed such as Made in Rwanda policy, Entrepreneurship Development Policy (EDP), SEZ policy, the Domestic Market Recapturing Strategy (DMRS), the National Export Strategy, SMEs strategy, the National Export Strategy and Cross Border trade strategy.
To increase the local domestic and foreign supply of manufactured goods, the Government has put in place the Special Economic Zone and 9 Industrial parks in Bugesera, Rwamagana, Muhanga, Nyagatare, Musanze, Huye, Nyabihu, Rusizi, and Kicukiro. This is aimed at addressing shortcomings in the business environment by developing infrastructure, streamlining business regulations, and facilitating fast-moving investors.
For market access, Rwanda has access to African and global markets through robust free trade agreements, namely:
- Common Market for Eastern and Southern Africa (COMESA) with a market of 492M
- East African Community (EAC)with a market of over185M
- Tripartite Free Trade Area Agreement (COMESA EAC SADC) with a market of 600M
- Continental Free Trade Agreement (CFTA)
- Cotonou Agreement established with the EU through Everything but Arms (EBA) and conclusion of EPA
- World Trade Organization (WTO) Declarations
Rwanda has preferential access to several international markets through the WTO’s special and differential treatment provisions. This has included access to the US markets through a unilateral commitment by the US to reduce tariffs under the African Growth and Opportunity Act (AGOA).
Rwanda also has access to preferential bilateral trade offers with other countries such as China, India, Korea, Japan, and Switzerland.
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Investment Opportunities
Light manufacturing:
- Electronics
- Vehicles
- Pharmaceuticals/ medical supplies
- Consumer Products
- E-Mobility
- Garments
- Packaging materials
- Wood products
- Recycling
- + many more sectors
Construction Materials
- Ceramics & glass
- Metals
- Wood products
- Natural construction materials
- Plastics
- Paints
- + many more sectors
- Investment Law
Two main benefits incentivize local production over import
Public procurement policy
- Government of Rwanda procurement covers ~12% of GDP
- “Made in Rwanda” policy allows for a benefit in public procurements when local value addition >30%
- Bids meeting this criterion get a 15% preference over other bids
- Smaller tenders (<10 mio and <100 mio RWF for services and works respectively) are always reserved for local suppliers
Customs benefits
- When domestic value addition is significantly high (30% value addition), import duties levied are lowered:
- 0% for raw materials
- 10% for intermediate products
- 25% for finished products
- This applies to imports from all countries outside the East-African Custom Union
Please refer to the following link below for more information on incentives:
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Highly-serviced land offering incentives & subsidies
Expedited and serviced land
- Phase I – 98 ha
- Phase II – 178 ha
- Phase III – ~153 ha (in plan)
- Roads, water, elec…
Incentives and subsidies
- Subsidized plot rate
- 30% down payment
- 2 year grace period with 10% int. (PII = 1 year with 15% int.)
Export Processing Zone status(EPZ) export >80% outside EAC
- EAC EPZ status and benefits
- No import duty on inputs & equipment
- Free trade conditions
- Min. govt. processes
Key services offered in the SEZs to a variety of industries & companies
- Power (Preferential electricity tariff structure for industrial companies), water and sanitation
- ICT infrastructure like fiber optic plus wires networks 4G and 3G
- Onsite and offsite roads links to airports and main roads
- Firefighting network
- Sewage network
- Security
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For any further details/information you may require, please contact: ipd@rdb.rw