OverviewIn 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.
Rwanda’s building and construction industry has rapidly grown in the past couple of years with both
Government and private sector engaged in the construction of buildings and roads infrastructure. This has resulted in high demand for construction materials including Electric cables, steel materials, Clay products (tiles, bricks, and paving blocks), float glass, wood products and paints. In terms of volume, Rwanda imported 503,195 Tons construction materials – 28% of total import volume in 2013.
TEXTILES AND GARMENTS:
The textile and apparel industry in Rwanda is small with only one major textile manufacturing company (UTEXRWA), a number of sizable small to medium scale operators, knitting cooperatives and a silk sector, which is in its infancy stage. Given the unique characteristics of the Rwandan market, the following local production options seem most promising:
- Manufacture of mosquito bed nets for malaria prevention: Rwanda promotes universal coverage of long lasting insecticidal nets (LLIN’s) as part of an integrated strategy of combating the malaria disease.
- Processing of cotton, wool, and other woven fabric for use in uniforms and work wear; Weaving bed sheets and towels
- New garments manufacturing – Rwanda has banned imports of second hand cloths
Rwanda imports most of the packaging materials needed in the country.
Most promising opportunity would be the manufacturing of corrugated paper and carton board boxes, unprinted paper labels, small paper bags and sacks, and paper containers would appear to be the most promising market segments on the domestic market.
SOAPS AND DETERGENTS
The estimated size of the market demand for soaps and cleaning products is about US$50m with estimated domestic production of US$15-20m, representing about 40% of the total market size
Motorcycle transport is one of the most common modes of transpport, in Rwanda and in the region, and the demand for motorcycles is growing. There is great opportunity in local assembly of motorcycles to meet local and regional demand
- Investment Law
Incentives To Support The Manufacturing Sector
- Corporate income tax holiday of up to 7 years is provided when investing at least an amount equivalent to 50 million USD
- Companies with Export Processing Zones (EPZ) status are exempted from customs taxes, CIT and VAT for an investor exporting more than 80% of production
- Preferential corporate income tax rate of 15% is accorded to an investor who exports at least 50% of the production
- Registered investor shall not pay capital gains tax
- Accelerated depreciation rate of 50% for the first year
- Foreign companies investing at least 250,000 USD are allowed to recruit three foreigners without a labor test.
- Exemption of imports duties on manufacturing inputs and equipment
Please refer to the following link below for more information on incentives:
Public procurement policy related to manufacturing
- 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% local preference over other bids
For any further details/information you may require, please contact: firstname.lastname@example.org