Rwanda Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Currently, the EU’s relations with Rwanda focus mainly on development cooperation in the areas of rural development and governance and regular political dialogue on issues of internal affairs, human rights and regional cooperation. To a much lesser extent, attention is paid to trade and investment issues, which is evidenced by the fact that the Economic Partnership Agreement (EPA) negotiated between the EU and the East African Community (EAC: Burundi, Kenya, Rwanda, Tanzania and Uganda) has still not been ratified in 2014. Nevertheless, the EU is Rwanda’s main import partner, especially for industrial products, data processing equipment, medical technology, etc.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 182.1 196.4 201.8 226.1 364.1
Imports into the EU (million EUR) 45.3 57.8 52.6 55.5 69
Balance with the EU (million EUR) -136.8 -138.6 -149.2 -170.6 -295.1

Source: European Commission

Trade relations with the Czech Republic

The Czech Republic provides preferential market access to Rwanda. The preferences are non-reciprocal and take the form of duty exemption. Rwandan exports to the Czech Republic consist mainly of agricultural commodities. The preference helps Rwanda, especially in the areas of agricultural products such as tea, coffee. Nevertheless, Rwanda’s trade balance with the Czech Republic is in favor of the Czech Republic, thanks to the export of the Czech defense industry.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0 0.1 0 0.1 ON
Imports to the Czech Republic (billion CZK) 0 0 0.1 0 ON
Balance with the Czech Republic (billion CZK) 0 0 0 -0.1 ON

Source: businesscarriers.com

Trade relations with countries outside the EU

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 386.4 394.8 464.8 707.7 662.7
Imports to countries outside the EU (million EUR) 2,459.2 2,454.3 2,616.0 2,945.6 3,319.6
Balance with non-EU countries (million EUR) -2,072.8 -2,059.5 -2 151.3 -2,237.9 -2,656.9

Source: EIU, Eurostat

Foreign direct investment

The country is proceeding according to Rwanda’s National Strategy for Transformation, and the government emphasizes supporting the private sector, especially in manufacturing, improving access to electricity and generally improving the conditions of the business environment. Economic strategies focus on the development of infrastructure through private-public partnerships (public-private partnerships).

One of the projects is the creation of an African financial center in Kigali. In October 2021, Rwanda and Luxembourg signed an agreement on cooperation in the establishment of an international center – Kigali International Financial Centre.

In autumn 2021, a contract was also signed with BioNTech for the production of mRNA vaccines in Rwanda. In addition to Rwanda, production will also take place in South Africa, Kenya, Senegal, Egypt and Tunisia. Construction of the Rwandan factory is expected to begin in early 2022 and will enable the production of vaccines not only for COVID 19, but also possibly for malaria drugs or tuberculosis vaccines.

The “Made in Rwanda” strategy has attracted other investors to the country such as for a tile factory in the Nyanza region, an electric cable factory also in the Nyanza region, a sanitary ware factory in the Southern Province, a bamboo processing factory in Kicukiro, a tannery in the Bugesera area, an edible oil factory in Kayonzo.

FTAs and treaties

Treaties with the EU

Negotiations on an Economic Partnership Agreement (EPA) with the East African Community (EAC: Burundi, Kenya, Rwanda, Tanzania and Uganda) were completed in October 2014. The EPA includes provisions on trade, customs, sanitary and phytosanitary measures, sustainable development of agriculture and fisheries. The agreement should increase the EU’s share of total EAC imports from 10.6% to 12.6%. The EAC-EU EPA provides immediate duty-free and quota-free access to the EU market for all EAC exports and a partial and gradual opening of the EAC market to EU imports. safeguards allowing each party to reimpose tariffs if imports from the other threaten to disrupt its economy. The EPA contains detailed provisions on sustainable agriculture and food security and sustainable use of fisheries resources. A chapter on economic and development cooperation is included. The parties undertake to conclude negotiations on the environment and sustainable development, services, investment and private sector development within five years of the entry into force of the agreement. Several articles refer to institutional arrangements and dispute settlement mechanisms. The EPA falls under the Cotonou Agreement: Violation of one of its “fundamental elements” involving human rights, democratic principles and the rule of law could result in the suspension of the EPA’s trade preference for the country concerned.

Contracts with the Czech Republic

Contractual basis Agreement on scientific and technical cooperation (Kigali, 29/11/1972) Agreement between the government of the Czech Republic and the government of the Republic of Rwanda on defense cooperation (Kigali, 4/8/2014) Although the Czech Republic does not have a double taxation agreement or an investment protection agreement with Rwanda, this fact does not prevent the development of trade relations, which is evidenced by the growing exports of the Czech Republic to Rwanda and the positive balance of the trade balance. In addition, the Czech Republic has a very good position in Rwanda thanks to the active participation of the Czech Republic, which the Czech Republic held as a member of the UN Security Council in 1994, in relation to the genocide that tragically took place in Rwanda that year.

Developmental cooperation

Rwanda is a recipient of development aid and is still heavily dependent on it, despite the government’s efforts – fully 30% of the state budget’s expenses are covered by development cooperation resources.

The Czech Republic occasionally provides funding within the program of small local projects. Small local projects (hereinafter referred to as “MLP”) are an instrument of bilateral development cooperation of the Czech Republic under the responsibility of the Ministry of Foreign Affairs of the Czech Republic. The aim of the MLP is to support the development activities of smaller scale local entities of the given countries. Activities of a smaller scale mean, for example, the supply of equipment or material or technology (also of Czech origin), training, support of development activities of local institutions and organizations, participation in partial parts of a larger, for example, international project. MLPs are carried out by local implementers directly in the developing country. The proposal for a foreign development cooperation project must be prepared in the current version of the identification form, which applicants will receive after contacting the relevant Embassy of the Czech Republic. The duly completed form must then be sent back to the embassy.

More information about the possibilities of involvement in small local projects can be obtained at: https://www.mzv.cz/jnp/cz/zahranicni_vztahy/rozvojova_spoluprace/dvoustranna_zrs_cr/sektory_projekty/male_lokalni_projekty/

Prospective fields of study (MOP)

Healthcare and pharmaceutical industry

Improving the situation in the healthcare sector is the main priority of the government, the share of public expenditure is at a high level of 15%. In Rwanda, 75% of the population has health insurance. As part of the plans, the annual expenditure per insured person is to increase from USD 36 in 2018 to USD 60 in 2024. As part of the government’s development strategy, further improvements in the quality of health care and investment in hospital facilities are expected. The government is interested in the training of doctors and staff in Rwanda by Czech experts (capacity building) or the transfer of know-how in biomedical engineering.

Agricultural and food industry

Agriculture employs almost 90% of the workforce, but accounts for slightly more than one-third of GDP (agricultural exports are, however, an important source of foreign exchange). Therefore, the government’s strategy is to increase the productivity of agriculture with the help of investment programs aimed both at achieving a higher intensification of the cultivation of basic export commodities (coffee, tea) through the application of fertilizers and the use of machinery, and at a higher share of the processing of agricultural production. This presents an opportunity for technology suppliers to the food industry (e.g. 90% of packaging material is imported into Rwanda). There is also an opportunity for Czech exporters in dairy production and milk processing equipment, freshwater pond farming, livestock and poultry breeding, livestock insemination and beer production.

Defense industry

The potential for defense industry supplies results from the security situation in the region. The government also devotes attention to financial resources for equipping the army and the police. The police are interested in modern technologies such as drones, cyber security or border protection equipment. We are interested in cooperation in the field of cynology and the breeding and training of service dogs.

Mining, mining and oil industry

The mining sector is an important source of export earnings (second only to tourism and before agriculture), it is the main industry. There are therefore assumptions that opportunities in the mining industry will continue to grow, especially given Rwanda’s strategic location adjacent to Congo, which is negotiating to join the East African Community (EAC). Raw material wealth is currently mined using very outdated technologies. The government’s plans for the next five-year period aim to change this unsatisfactory state by involving a wider degree of mechanization and the possibility of exporting raw materials with added value already after basic processing.

ICT, Science and Research

Rwanda is profiled as the ICT and research hub of the region. It is the only one from East Africa to have received a license to manufacture vaccines (including the Moderna vaccine for COVID19) as part of the KENUP project, it is investing in building a nuclear medicine center, it is a center for the 4th industrial revolution of the World Economic Forum (W4IR), it is building a space agency, the National Post Office the agency is reorienting itself to the requirements of e-commerce and related logistics. The government is building Kigali Innovation City, which is already home to major universities and research centers. The African Institute for Mathematical Sciences (AIMS) is an African center of excellence. All these institutions are interested in scientific cooperation with Czech centers and need training and know-how exchange.

Rwanda Trade