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Trade Policy and Sustainable Development Meeting

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Trade Policy and Sustainable Development Meeting TRADE POLICY AND SUSTAINABLE DEVELOPMENT MEETING Geneva, 6 -- 8 October 2015 TRADE POLICY AND SUSTAINABLE DEVELOPMENT: RWANDA’S EXPERIENCE Session-1 M r. Emmanuel HATEGEKA Permanent Secretary Ministry of Trade and Industry Rwanda Trade Policy and Sustainable Development - Rwanda’s Experience Outline of Presentation 1. Rwanda in the World – Fact sheet and integration status 2. Rwanda’s Transformation Vision and Policy Mix – A Path to Sustainable Development; 3. The Development Journey so Far; 4. A Practical Example – A Comprehensive Programme to Facilitate Cross Border Trade; 5. Challenges linked to attainment of SDGs; 6. Recommendations; MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 2 Rwanda a at Glance Rwanda in the heart of Africa Key Facts Capital Kigali Population 11 million (2014) 2 Land Mass 26,338 Km RwF 5389 billion Nominal GDP (2014, approx. US$ 7.9 billion) GDP Growth 7.0 % (2014) GDP Per Capita US$ 718 National Boundary National Paved Road Province Boundary District Boundary Literacy Rate 71% National Park East Africa is External Debt (% of 22.3% (End 2014) one of the GDP) fastest growing Time to Start a regions in 6.5 days Business Africa Credit Rating B+ (Positive); B+ (Stable) Rwandan Franc (750 RwF = 1 US$ as of Currency end September 2015) Ministry of Trade and Industry, 2015 Rwanda’s Integration Status COMESA - GDP – US$ 550 Billion - Population – 390 Million EAC Chad - GDP – US$ 110 Billion Sao Tome & Principle Central African Republic - Population – 143 Million Kenya, Cameroon ECCAS Rwanda Uganda Equat Guinea Burundi TFTA (SADC – EAC – COMESA) Congo - GDP – US$ 1.2 Trillion Gabon CEPGL DRC EAC - Population – 600 Million Angola ECCAS Tanzania COMESA - GDP – US$ 170 Billion - Population – 121 Million Malawi Mozambique SADC Madagascar Namibia Zambia Botswana Zimbabwe South Africa Swaziland Lesotho MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 Rwanda’s Transformation Vision Economic Challenges that Transformation could jeopardize Strategic Direction pre-requisites and Economic - Prioritization characteristics Transformation Approach A. Sectors to Stable macro- Unmet energy demand • Existing export- economic environment oriented sectors Develop Increased investment Limited and over- • Emerging high- Vision and savings concentrated exports potential sectors • Future areas of Low FDI and Greater international opportunity integration Priority Weak logistics system Commitment to B. Geographic Areas market driven processes for resource Limited availability of • Domestic – secondary allocation long- term savings and cities credit • Regional – EAC & DRC Increased urbanization • International – East & South Asia , EU Address environmental Urbanization pressures Issues MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 5 Rwanda’s Transformation Vision – cont’d Our Transfor- Sustained rapid economic growth and transformation by mation increasing the internal and external connectivity of the Vision Rwandan Economy • Increase the domestic interconnectivity of the Rwandan economy 1 through investments in hard and soft infrastructure • Increasing the external connectivity of Rwanda’s economy and 2 boosting exports Priority • Transform the private sector by increasing investment in priority Areas 3 sectors • Transform the economic geography of Rwanda by managing 4 urbanization and promoting secondary cities 5 • Pursue a ‘green economy’ approach to economic transformation MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 6 The Trade Policy Mix SDGs in focus Overarching trade Implementation policy aims Goal 1 End poverty in all its forms everywhere Sustained rapid inclusive Multi-Lateral Goal 8 Promote sustained, economic growth and WTO, EAC EPA, BITs inclusive and sustainable transformation by economic growth, full and increasing the internal productive employment and external connectivity and decent work for all of the Rwandan Economy Regional Level Goal 9 Build resilient through: EAC (Single Customs infrastructure, promote Territory), COMESA, TFTA, inclusive and sustainable (a) Diversifying Rwanda’s CEPGL, Northern Corridor industrialization and foster export destination mix Reforms innovation while growing inward Goal 10 Reduce inequality foreign direct investment Country Level within and among EDPRS 2, PSDS, Trade countries (b) Allowing the seamless Policy, NES, CBT Strategy, Goal 17 Strengthen the flow of goods and DMRS, Industrial Master means of implementation services through plan, Doing Business and revitalize the global Rwanda’s borders Reforms, Sector Specific partnership for sustainable (import and export) development strategies MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 7 Sustained Programme of Trade Related Reforms Streamlining Border Information Other Reforms Procedures •E-Gov Portal •Introduction of the Single •E-licensing regulations: •Simplified Certificate of Customs Territory: Goods Origin imported into the Customs •Alternative Dispute Union shall be entered only Resolution (ADR) portal; •Coordinated border once and released at the first •Export portal and export controls and development port of entry to the handbook; of One-Stop Border Posts destination Partner State. •Call center in RRA on tax •Introduction of electronic •Extended working hours: related enquiries single window submissions Moving from 12 working •WTO TBT National Enquiry which has so far connected hours to 24/7 operations; Point: over 95% of government main borders operate either agencies 24 hours (Gatuna, airport) or •Business Development 16 hours for others Services • Introduction of Single Entry EAC Visa on Northern •Harmonization of road tolls •Ministry and Agency Corridor with Tanzania website with relevant •Use of Electronic Cargo documents available online. •Online tax payment system Tracking System along the corridors for safety of cargo and anti-dumping MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 8 The Journey so Far – Results Achieved • Between 2001 and 2014, annual average GDP growth exceeded 9% a year. • Reduction in number of households living in extreme poverty from 40% in 2000 to 24% in 2014. • Rwanda has been ranked the 3rd easiest place to do business in Africa according to the World Bank’s Doing Business Report. • Rwanda has the lowest burden of customs procedures in the EAC and is ranked 16th globally (WEF Global Competitiveness Report 2015) • Trade as a % of GDP increased from 20% in 2000 to 40% in 2014 • Reduction in time to import from 23 days to 11 days and continuing to fall (TMEA Trading Across Borders Assessment 2015) • Single Entry EAC Tourist Visa for Rwanda, Uganda and Kenya MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 9 Cross-Border Trade – A Practical Example of the role of Trade in fighting poverty MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 10 What is Cross-Border Trade CBT is formal and informal trade between market centres and communities living in close proximity to the border; Trade in legitimately produced goods and services - does not include mineral trade; Often CBT is not officially recorded due to small quantities traded or formal trade procedures are not correctly applied hence - Informal; Small trade is any trade with transaction value below US$ 1,000 (COMESA STR) or US$ 2000 (EAC STR) MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 11 Why it’s Important for Rwanda – Trade aspects • Cross Border Trade accounted for 27% of Rwanda’s total Exports in 2015 • 56% of Cross-border Trade is Traded informally Exports To Neighboring Countries 2014 Informal Cross Border Trade 2010-14 US$ Millions (US$ Millions) 160 120 140 Formal 100 120 58 Informal Millions 80 100 60 80 102 110 110 40 60 55 45 40 89 20 0 20 11 10 6 - 10 10 0 DRC Burundi Uganda Tanzania MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 12 Why it’s important – Social dimension Among poorest provinces in Rwanda 70% - 85% informal traders are women who invest gains in household and education; Disabled groups are organised and active in CBT; Inclusive job creation which addresses poverty issues in the region; Reduces prices and increases availability of basic household goods (welfare); Regional food security (high trade in agricultural goods) MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 13 Rwanda’s Framework to Support CBT Designed a Cross-Border Trade Strategy in 2012 Created Cross-Border Coordination Unit in MINICOM 2: Infrastructure 1: Border 3: Capacity 4: Cross-Cutting Upgrading Market and Enhancing Social, Improving the Border Supporting Traders Transport Political and Economic (Reducing thickness) and Producers Infrastructure Environment Traders and Institutional Cooperatives Border Facilities Markets Capacity Capacity Linking Production Coordination Storage with Markets (Donors & Govt) Border Regulation Accessing Social and Political Road Networks Finance Awareness Border Waterways and Access to Business Management Ports Information Environment MinistryNational of Leadership Trade and Retreat Industry, 2013 2015 14 Comprehensive Package of Support • Border Facilities and Regulation: • Howard Buffett Foundation, Trademark East Africa, and World Bank funding border infrastructure • COMESA and EAC Simplified Trade Regime implemented • MoUs signed with DRC to facilitate CBT • Upgrading Markets and Transport Infrastructure • EIF, TMEA and World Bank funding markets; • EU funding
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