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  • African PlatformRwanda

     

    Country information

    Rwanda is a rural country with about 90% of the population engaged in (mainly subsistence) agriculture. It is the most densely populated country in Africa and is landlocked with few natural resources and minimal industry. Primary foreign exchange earners are coffee and tea.  Rwanda has made substantial progress in stabilizing and rehabilitating its economy to pre-1994 levels, although poverty levels are higher now. GDP has rebounded and inflation has been curbed. Despite Rwanda's fertile ecosystem, food production often does not keep pace with population growth, requiring food imports. Rwanda continues to receive substantial aid money and received IMF-World Bank Heavily Indebted Poor Country (HIPC) initiative debt relief in 2005
    Country Size: 26,338 sqkm
    Population: 8,440,820
    Currency: Rwandan franc (RWF)
    Languages: Kinyarwanda (official) universal Bantu vernacular, French (official), English (official), Kiswahili (Swahili) used in commercial centres
    Capital City: Kigali
    GDP (US$): 1.8 billion
    Main Economic Sectors: Cement, agricultural products, small-scale beverages, soap, furniture, shoes, plastic goods, textiles, cigarettes.
    Main Exports: Coffee, tea, hides, tin ore.
    Main Imports: Foodstuffs, machinery and equipment, steel, petroleum products, cement and construction material.
    Industry (Main Industries): Cement, agricultural products, small-scale beverages, soap, furniture, shoes, plastic goods, textiles, cigarettes.
    Natural Resources: Natural gas - proved reserves: 28.32 billion cu m (1 January 2002)
    Agriculture - products: coffee, tea, pyrethrum (insecticide made from chrysanthemums), bananas, beans, sorghum, potatoes; livestock.
    Agriculture (Main Products): Coffee, tea, pyrethrum (insecticide made from chrysanthemums), bananas, beans, sorghum, potatoes; livestock.
    International Organization Member: ACCT, ACP, AfDB, AU, CEPGL, COMESA, FAO, G-77, IBRD, ICAO, ICFTU, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, Interpol, IOC, IOM, ISO (correspondent), ITU, MIGA, NAM, OPCW, UN, UNCTAD, UNESCO, UNIDO, UNMIS, UPU, WCL, WCO, WHO, WIPO, WMO, WToO, WTO.
    Infrastructure: Airports: 9 (2004 est.)

    Airports - with paved runways:
    Total: 4
    over 3,047 m: 1
    914 to 1,523 m: 2
    under 914 m: 1 (2005 est.)

    Airports - with unpaved runways:
    total: 5 914 to 1,523 m: 2
    under 914 m: 3 (2005 est.)

    Roadways:total: 12,000 km
    paved: 996 km
    unpaved: 11,004 km (1999 est.)

    Waterways:
    Lake Kivu navigable by shallow-draft barges and native craft (2004)

    Ports and terminals: Cyangugu, Gisenyi, Kibuye

    Communication

    Telephones - main lines in use:23,200 (2002)
    § The telephone system primarily serves business and government. The capital, Kigali, is connected to the centres of the provinces by microwave radio relay and, recently, by cellular telephone service; much of the network depends on wire and HF radiotelephone international: country code - 250; international connections employ microwave radio relay to neighbouring countries and satellite communications to more distant countries; satellite earth stations - 1 Intelsat (Indian Ocean) in Kigali (includes telex and telefax service)

    Telephones - mobile cellular: 134,000
    § Rwanda has mobile cellular service between Kigali and several provincial capitals (2003)

    Livestock

    Cattle Population: 1,003,721
    Sheep Population: 469,979
    Goat Population: 1,263,962
    Other Population: Pig: 326,652; Poultry: 2,841,399; Rabbits: 520,057
    Cattle Off Take Rates: 14%
    Sheep Off Take Rates: 27%
    Goat Off Take Rates: 27%
    Livestock Policy:
    •  Create supportive infrastructure
    •  Policy frame work for enhancing the growth of national livestock resources.
    •  Launch census and quality and quantity enhancement programs.
    •  Promote and support investment in animal husbandry, etc.
    •  Create sustainable supply chain
    •  Promote and support involvement of women and the youth in trading in hides and skins.
    •  Provide access to finance for business in this sector.
    •  Establish standard for hides and skins and enforce.
    •  Create network of collection sites and transportation network, etc.
     
    Slaughter Facilities: 3 industrial, 36 semi-industrial and 349 rural slabs.

    Industry profiles

    Hides and skins

    Tanning

    Footwear

    Leather goods

    SWOT analysis

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     Hides and skins

    Quantity Hides: 140,521 p.a.
    Quantity Sheep: 126,894 p.a.
    Quantity Goat: 341,270 p.a.
    Annual Collection Level Hides: Estimate of 80%
    Annual Collection Level Sheep: Estimate of 65%
    Annual Collection Level Goat: Estimate of 65%
    Flaying Methods: Machine and Hand flaying for hides.
    Pulling for skins.
    Preservation Methods: Salting and air/wire drying.
    Grading Systems, available grades and percentage of Each: No defined grading system is utilized.
    Hides & skins trade channels: Butchers - Buyers - Dealers - Tanneries.
    Market (%): Major Markets in 2003
    Hong kong:41%
    Pakistan: 31%
    Kenya: 11%
    Italy: 6%
    Thailand: 4%
    Greece: 2%
    Spain:2%
    Annual Export Value (US$): 5 Million - 2005
    Average market Bovine price: 0.75/sqft (wet blue)
    Average market Sheep price: 33/doz (wet blue)
    Average market Goat price: 30/doz (wet blue)

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     Tanning

    Number of Tanneries: 1
    Installed tanning capacity: Wet blue:
    4,000 skin per day
    200 hides per day

    Finished leather:
    1120 Sq ft skins
    560 Sq ft h
    Tanneries in Operation: 1
    Utilized capacity: Wet blue:
    4000 skin per day
    200  hides per day

    Finished leather:
    1120 Sq ft skins
    560 Sq ft
    Output of the industry: Wet blue:
    3000 skin per day
    150  hides per day

    Finished leather:
    1120 Sq ft skins
    560 Sq ft hides
    Number of employees: 75
    Market (%): China Mainland, Hong Kong and Italy.
    Estimated Annual Export Value (US$): 1.5 M (2005)

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     Footwear

    Number of footwear: Artisanal Level Production

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     Leather goods

    Number of leather goods and garment factories: Artisanal level production.

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     SWOT analysis

    Strengths:
    • Animals not used for farming; have relatively less pre-mortem defects.
    • 40% of the slaughtering done in abattoirs; enables quick raw stock delivery to tanneries and monitoring flow.
    • Relatively less other pre-mortem defects; no branding of animals; relatively easier to control
    • All areas known to be important sources of raw stock easily accessible for mobilization.
    • Inherently thicker hides and skins allow splitting, unit cost reduction and innovative production
    • Thick goat skins with smooth grains  make them preferable over others especially for footwear and leather goods.
    • Existence of a large number of artisans working in leather goods sector; a sound basis for future development of SMEs.
    • Political will and commitment to develop the sector
    • The presence of a sectoral association which can be used as a tool to galvanize joint efforts between the PS and the government.
     
    Weaknesses:
    • Lack of appropriate market structure and policy framework that delivers raw stock to tanneries.
    • Lack of the necessary skills in flaying, curing, storing and transporting raw stock causing substantial post mortem defects.
    • Weak or non-existence of an organized leather goods industry of any level to integrate with the only tannery in the country.
    • Absence of or difficulty in accessing finance to support the development of SMEs in the sector.
    • Lack or absence of a marketing framework that can supply machinery and components to the SMEs that engage in this area.
    • Absence of a distribution network that would relieve artisans producing goods to stock and ensure smooth engagement in production of finished goods.
    • Lack of institutional framework to stop illegal purchase of raw stock and shipping it to neighbouring countries
    • Only one tannery lacking in requisite equipments and proper effluent treatment facilities.
    • Tannery misplaced in the centre of the city which will require substantial investment in waste treatment as a compliance to GMP.
     
    Opportunities:
    • Ideal location in the centre of regional markets with appreciable disposable income having no better leather sector.
    • Existence of known demand in the regional markets for special products like military boots
    • Further supply of raw materials from neighbouring countries once attractive marketing instruments and thriving industry emerges here.
    • Regional integration providing access to bigger market.
    • Country potentially a tourist destination which can create considerable market for SMEs engaged in production of leather goods
    • Presence of unique ecological attributes that can be used for branding products with exclusivity.
    • Possibility of accessing international T/A for efforts to enhance the leather sector in association of the country's poverty alleviation strategy.
     
    Threats:
    • A beginner in a mature and competitive market requiring extremely specialized and well integrated infrastructure
    • Existence of traditional cross boarder trade in which raw stock bought on the local leaves the country through formal and informal arrangements.
    • Land locked country; unreliable transportation facilities and high cost when available for moving goods and services to port areas.
    • Reliance on foreign sourcing of skilled manpower and absence of reliable technology vendors.
    • Challenges of image building post 1994 war.
    • Existence of a large second hand shoes market at formal and informal level.
     

    Government policy

    Fiscal Policies: VAT -For goods or services consumed by privileged persons VAT rate is 0%. This also includes exports, diplomatic purchases and purchases under donor funded agreements, projects and technical aid.

    A rate of 18 % is the standard tax to taxable goods and services. VAT is accountable for and paid monthly. VAT returns are filed by not later than the 15th day of the subsequent month.

    Export levies, - In 1997 Rwanda reduced its tariff rates and eliminated all export and no tariff barriers. Following the changes to the tariff code under the 1999 budget, Rwanda's trade regime became one of the most open in sub-Saharan Africa.

    Corporate taxation - 30 %
    Monetary Regulations: No regulations i.e free trade and movement of foreign currencies Rwanda's economy is liberalised. Since 1994, the government has embarked on a comprehensive liberalisation of its foreign trade and adhered to the regional integration targets under the Cross-Border Initiative (CBI) and Common Market for Eastern and Southern Africa (COMESA). Rwanda has also made significant advances in regional integration and has been invited to join the Commission for East African Cooperation (EAC) and is expected to become a member in the near future.
    Trade regulations: Import duties are paid on imported goods. The rate applying to import duties are provided for under the custom tariff book. There are currently 4 rates of 0%, 5%, 15%, and 30% as per law No.25/2002 of 18/07/2002. Under law No.52/2001 of 30/12/2001, imports from COMESA countries that meet conditions as specified by the COMESA rules of origin are given a preferential treatment by reducing the rates. In 2002, the reduction is at 80% and is expected to increase to 90% and 100% in 2003 and 2004 respectively.

    Useful links:
    1. www.rwandinvest.com
    2. www.rwandagateway.org
    3. www.gov.rw

    Investment environment

    Requirements For Foreign Investment / Joint ventures: An application for an investment registration shall be made in writing to the Director General of the Agency and shall contain the following information:
    a) The name and address of the proposed business enterprise, its legal form, and the name, address and nationality of each shareholder or partner;
    b) The nature of the proposed business activity and level of planned capital investment;
    c) The estimated number of persons to be employed and categories of jobs to be created;
    d) The nature and volume of waste shall be generated by the enterprise's operations, the proposed methods to identify, capture, treat and dispose of such waste materials, and to protect the environment and the public health;
    e) The nature and extent of support and facilitation which the investor is seeking from the Agency including access to industrial and agricultural land, utilities, work permits, company registration and others.
    Tax Incentives: 1. An investor intending to make new investment, rehabilitate, expand, renovate or restructure existing business enterprise and for that purpose import plant, machinery and equipment which is zero import tax rated under the Commodity Code is exempted from Value Added Tax otherwise payable on those good
    2. An investor who imports plant, machinery, equipment and raw materials for the operations of a registered business enterprise which are not zero import tax rated under the Commodity Code, pays a single flat fee of five (5%) percent of the CIF value of the imported items, in lieu of all taxes, including import duties, Value Added tax and others which would normally be imposed on such goods.
    3. Pay company income tax rate of 10% within a period of ten years from the coming into force of the Investment Code.
    4. Importation of plant, machinery, equipment, building materials and inputs free of duty and Value Added Tax;
    5. Exemption from all other taxes normally levied on a business enterprise operating in the country;
    6. One-Stop Centre services by the Agency for facilitation at beginning of process and afterwards as long as he will be operating within this regime;
    7. Tax free externalisation of funds;
    8. Flexible work permits allowance to enable the investor to hire quality expatriate staff;
    9. Exemption from withholding tax and taxes on dividends;
    10. The right to purchase locally produced goods and services free of duty and Value Added Tax as inputs in its production process.
    Free Trade Zones: Rwanda is in the process of establishing an export-processing zone. Export processing zone means a geographically demarcated industrial zone where imported and locally produced machinery, equipment, goods and services are imported free of duty and utilized in producing new goods and services, with specified percentages of those goods and services exported and the rest sold locally.

    Useful links:
    1. www.rwandinvest.com
    2. www.rwandagateway.org
    3. www.gov.rw

    Institutional support

    Rwanda Investment and Export Promotion Agency

    Contact Name: William Nkurunziza
    Job Title: Director General
    Institute Name: Rwanda Investment and Export Promotion Agency
    Address: Kimihurura, Avenue du Lac Muhazi
    P.O.Box: 6239    
    City: Kigali
    Country: Rwanda
    Phone1: +250--510 248 Phone2: +250--585 179
    Fax: +250--510 249    
    Email: info@rwandainvest.com
    Website: http://www.rwandainvest.com
    Activity:
     Other Government body  
    Presentation of the institute: The agency is charged with the responsibility to promote and facilitate trade and investment in Rwanda.
    Major objectives include:
    • Promotion of investment opportunities with local and foreign investors. The Agency markets all investment opportunities in Rwanda to targeted investors world wide;
    • Facilitation of establishment and smooth operations of investor projects. It operates a one Stop Centre for all investors, to facilitate them start their business enterprises or investment projects;
    • Facilitation of business development and export production. Advise Government on additional policies and initiatives needed to encourage and support investment in the country.
     

    Trade statistics

    Products

    Year

    Exports (quantity)

    Exports (in USD)

    Raw hides and skins

    2003

     

    2,810,000

    Leather

    2003

    182 tonnes

    439,000

    Technical cooperation projects

    Increasing the Competitiveness of the Rwanda Hides and Skins sector

     
    Duration: 4 years
    Status: Ongoing
    Description: The project is sponsored by the Government of Rwanda and it's focussed on increasing the competitiveness of the Hides and skins sector in Rwanda, thus increasing the export value of leather in the country. Its being undertaken by the consultancy company On the Frontier (OTF).

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    Rwanda Technical Assistance Program

     
    Duration: 4 years
    Status: Completed (2005)
    Description: The Rwanda Technical Assistance Program was awarded to the International Executive Service Corps (IESC) by the United States Agency for International Development (USAID) on April 29, 2002, under Grant Number 623-G-00-02-00039-00, with an original estimated end date of April 28, 2004. The original award amount was $500,000. The purpose of the grant was to provide IESC Volunteer Expert (VE)-led technical assistance to support the small and medium enterprise (SME) sector in Rwanda. The program was modified three times subsequently to add additional time and funding to the program. The final modification, Modification Three, extended the program through October 31, 2005 and increased the total estimated amount by $299,331 for a total program amount of $799,331. The modification provided funding for additional technical assistance projects and for the support required for fielding technical assistance projects. The Rwanda Technical Assistance Program was originally designed to support USAID's Strategic Objective 3 (SO3), aimed at increasing agricultural production and productivity and expanding opportunities for the marketing of commodities both internally and externally. In support of this objective, the program focused on providing volunteer technical and managerial assistance, including training, to governmental organizations, non-governmental organizations (NGOs) and small and medium-sized enterprises (SMEs) with a need for organizational strengthening.

    Surveys and reports

    Evaluation of Existing situation and Recommendations of a ROADMAP for upgrading of the Leather Sector in Rwanda

    Corporate Author(s): Teshome Kebede
    Year of Publication: December 2005
    Number of pages: 80
    Language(s): English
    Abstract: The amount of resource base the country has, though not a determinant competitive advantage by itself is not insignificant, especially compared to its regional positioning.  Many countries are faring well in the international market with much lesser of it to rely on. In the top ten countries mentioned earlier, only four of them have strong raw material bases.  In our own continent, Tunisia is another good example.  It has an estimated cattle population of 790,000 heads, 6.8 million heads of sheep and some 1.4 million of goats, not so much different from Rwanda, and yet it is by far the largest country in Africa producing some 42 million pairs of leather shoes annually for the export market.  It has created employment opportunities for some 15,000 of her citizens; the sector contributes significantly to the national export earnings and to the GDP of the country.  As a well structured and steadily growing sub-sector, it has achieved the nation a strong bargaining position in its endeavour to negotiate partnership with the EU in what is referred to as EU-Mediterranean integration.
    Publisher: Not yet published
    Type of Document/Material: Hard Copy

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    Rwanda Poverty Reduction Strategy Paper

     
    Corporate Author(s): Government of Rwanda
    Year of Publication: February 2006
    Number of pages: 117
    Language(s): English
    Also availabe at: http://www.imf.org/external/pubs/ft/scr/2006/cr0661.pdf
    Abstract: Rwanda's PRSP was finalised and endorsed by all internal and external stakeholders in June 2002. Annual Progress Reports (APR) were published in 2003 and 2004, while the current report looks at progress made in 2004 and early 2005.  The timing of the APR is strategically positioned to influence the debate on resource allocation. In March and April of each year, joint sector reviews are held in all sectors, to look back critically at performance over the last year and identify the priorities and strategies for the years ahead. The reviews produced in this context are summarised in the APR. While the different ministries proceed to produce strategic issues papers to support their respective budget requests for the coming year, the APR report contributes to a global assessment of what overall government priorities should be set for the coming year in light of progress and arising constraints in the various sectors. To this end, it is crucial that the APR process is concluded in June / July of each year.  This year the report contains more information than ever before, and provides a more comprehensive picture of progress. One of the innovations in the production of this year's report was the requirement for sectors to provide a table with clear key objectives and associated performance indicators. This should not only provide a clearer picture of real progress achieved, but also help analyze what value for money government is getting in the various sectors. The  result of this attempt is discussed in the M&E chapter, which has been moved to the end of the report.
    Publisher: International Monetary Fund
    Type of Document/Material: Report

    Company profile

    Rwanda Leather Industries Ltd

     
    Contact Name: Gitau Wamukui
    Job Title: Chief Executive Officer
    Address : Nyabugogo
    P.O.Box: 6874    
    City: Kigali
    Country: Rwanda
    Language: English - French
    Phone1: +250--577 000 Phone2: +250--503 803
    Fax: +250--501 293    
    Email: sabanrw@rwanda1.com / gwamukui@yahoo.com
    Website: http://www.rwandaleather.com (under construction)
    Activity :
     Manufacturer  Exporter
    Presentation of the Company: Established 1968 as Soderapral. After the Genocide was liquidated and bought by Private investors under the name SABAN constituting an abattoir and tannery. Tannery reorganised as Rwanda leather Industries Ltd, supplied daily with 80 -100 machine flayed hides from abattoir. Located in Kigali town, installed capacity 6000 skins and 400 hides daily. The finishing and crusting capacity set to increase in the next phase of expansion ending 2010. Employees - 75 non skilled and skilled staff, annual turnover of 1.5 million USD (2005)
    Cooperation Sought: We are looking for partners to assist in developing of the markets for more value added products, specifically crust and finished leather.

    Hides & Skins and Semi Finished

    Products Animal Description Grading Standards Production Capacity Indicative Price Range ($US)
    Wet Blue Goats, Kids These are ex air dried and wire dried skins (90%) and 10 ex wet salted. Average size 4.5- 5 sq ft. They have very good grain texture and have a thick substances and good suede value. TR/VI Appr. 4000 skins/day Contact Tannery
    Wet Blue Sheep, Lamb These are ex air dried and wire dried skins. Average size 4.5- 5 sqft. They have very good grain texture and have a thick substance. TR/IV Varies with revived quantities Contact Tannery
    Wet Blue Bovine, Buffalo, Equine This are ex wet salted or green hides. Average area 28 sq ft full substance above 3.5 mm. Humplses , no brand marks and can either be machine or hand flayed. TR /IV/V/VI and Rejects Appr. 200 hides/day Contact Tannery

    Environment and social responsibility

    Environment

    Legislation:

    		 Rwanda has embarked on reforming laws concerning environment by drafting an Organic Law on Environment Protection and Management.
    The law sets out the general legal framework for environment protection and management in Rwanda.
    It also constitutes environment as a one of the priority concerns of the Government of Rwanda.

    Under the fundamental principle on national environmental protection policy develops national strategies, plans and programs, aiming at ensuring the conservation and use of sustainable environmental resources.

    The law gives right to every natural or legal person in Rwanda to live in a healthy and balanced environment.
    They also have the obligation to contribute individually or collectively to safeguard country's natural, historical and socio-cultural heritage.

    The framework of the law on the protection and management of natural resources centers on avoiding and reducing the disastrous consequences on environment.
    It measures result from an environmental evaluation of policies, programs and projects, aimed at preventing the consequences of such activities.

    The principle of sustainability of environment and equity among generation emphasizes human beings at the core of sustainable development.
    They therefore, have a right to a healthy and productive life in harmony with nature.
    They must so as to equitably meet the needs of the present and future generation.

    The Rwanda National Environmental Authority is responsible for the implementation.
    Labour Laws: Compliance with ILO. Labour Laws are available through currently under review.

    Article 1: This law institutes the Labour Code of the Republic of Rwanda.

    Article 2: An employee in this law is any person, regardless of his/her sex and nationality who has undertaken to put his/her professional activity, for pay, under the direction and the authority of another person, natural, or public or private organisation.  LABOUR LAW -A person hired as statutory or a contractual employee assimilated to a statutory one in a permanent job of a public service official is not concerned with the provisions of this law.  

    Article 3: In this law, any natural person or public or private organisation is considered as an employer and constitutes a company as soon as he is employing one or many employees even temporarily.  

    Article 4: Forced labour is absolutely forbidden. By forced labour, this law refers to any work or service required from an individual by threatening him/her with any penalty and for which the said individual has not freely offered himself/ herself.
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