Partnership Ready Rwanda: Transport Sector Overview → GEOGRAPHY According to UNCTAD, Africa is the continent with the most land- → SETTING THE STAGE locked developing countries and Rwanda is one of them. Rwanda located in Central Africa shares borders with the Democratic Repub- Transportation moves people or goods from one place to another. lic of the Congo (DRC) in the West, Burundi in the South, Uganda in Many scholarly texts highlight the close relation between trade the North and Tanzania in the East. As of 2019 Rwanda has a popu- and transportation, underlining that trade is a determining factor, lation of some 12.4 million and covers a land area of 26,338 km2. if not the engine of transportation and logistics. Transportation directly benefits from an increase in trade and conversely, high Known as the land of the ‘Thousand Hills’, the topography of transport costs hamper trade. A study by the World Bank shows, Rwanda and the steep, winding roads are a challenge for transpor- that a 10-percentage-point increase in transport costs is typically tation. While a 400 km-long cross-border standard gauge railway reducing trade volumes by approximately 20 percent. The avail- is planned to link Kigali via Isaka with the port of Dar Es Salaam in ability and state of infrastructure such as road, rail or air, and a Tanzania, currently all goods – if not imported or exported by air – country’s geography are cited as the strongest determinants for are transported by road, either on the 1660 km of the Northern the costs of transportation. Corridor via Uganda and Nairobi to the port of Mombasa in Kenya or on the 1420 km of the Central Corridor to Dar Es Salaam. Being landlocked is a geographical disadvantage leading to trans- port costs 50 % higher and trade volumes 60 % lower than in a To mitigate and overcome the country’s geographical disadvan- comparable coastal economy. Scholars estimate, that being land- tage the Government of Rwanda focusses on three topics: First, locked and having scarce natural resources – which is the case on improving the transport infrastructure and services, second on for Rwanda – cost an economy 1 % of growth. facilitating trade by attracting investment and fostering exports, and third on pushing for regional and continental integration. Northern and Central Transport Corridors PARTNERSHIP READY RWANDA: TRANSPORT high-capacity urban roads in Kigali, the rehabilitation and upgrad- Policy and Legislation ing of National Roads linking Rwanda with neighbouring countries and the improvement of District Roads. To enhance access to trans- portation in rural areas, various feeder road projects were realised In July 2000, Rwanda adopted Vision 2020, outlining a long-term with the support of the World Bank and the European Union. development path for the country. The vision states Rwanda’s ambitions to become a middle-income country by 2020 in an As proposed in the action plan, the new Kigali Logistics Platform equitable way and underlines the country’s determination to be (see Box 1) and the Bugesera Airport – currently under construc- a well-governed, modern, strong and united nation, without tion – are rolled out as Private Public Partnerships (PPP). discrimination between its citizens. End of November 2019 Tanzania and Rwanda completed the plan- Vision 2020 states that agriculture can never be the sole engine of ning of the standard gauge railway from Isaka to Kigali via Rusumo growth, and calls – as a pre-condition for the country’s economic and agreed on the financial split of the USD 3.6 billion investment growth – for the diversification and liberalisation of the economy. needed. Currently the countries are looking for funding. No date for its implementation has been published yet. Rwanda substantiated and updated Vision 2020 in several sector plans, policies and strategy documents, with the most recent, the 2017-2024 National Strategy for Transformation (NST), aiming → TRADE to accelerate the transformation and economic growth with the private sector at the helm. In line with Vision 2020 and the EDPRS, the Ministry of Trade and Industry published in 2010 the ‘Rwanda Trade Policy’ to harmonise and consolidate trade policy interventions. The document outlines → TRANSPORTATION INFRASTRUCTURE the key objectives, the strategic initiatives and actions as well as AND SERVICES the necessary investments into productive capacities. The Government of Rwanda recognizes the transportation sector The trade policy recommends the mobilization of investment for as one of the key drivers of growth. It collaborated closely with the the establishment of selected export-oriented industries, actions African Development Bank (AfDB) publishing the ‘Rwanda Trans- to improve the climate for attracting investment into productive port Sector Review and Action Plan in 2013’. activities, building up capacities to meeting product standards as well as environmental norms. It also includes the objective of Starting with an assessment of the Country’s transportation sector, strengthening participation in international trade through seeking this comprehensive plan outlines opportunities and ways to miti- greater market access and entry opportunities, in Africa, the EU gate challenges. It distinguishes between short and longer-term (under Economic Partnership Agreements), in Asia and in transition measures covering both the expansion of physical infrastructure economies. It aims at building up and disseminating data and and the development of the sector’s structure, regulation, and information on tariff and non-tariff measures affecting exports of institutional capacity. The plan concludes by identifying options Rwanda. for attracting private sector investments to help meeting the estimated USD 11,388 Mio needed for the investment programme proposed for 2013 – 2030. The plan guided Rwanda in the preparation of the 2013 Economic Development and Poverty Reduction Strategy (EDPRS 2). Key priorities such as improving the riding quality and maintenance of the road network, efficient air transport infrastructure and the transformation of Rwanda into a regional freight logistics hub were substantiated. With the overall goal of developing a modern, cost effective trans- portation infrastructure offering quality services on multimodal transport systems for passenger and goods, the Rwandan Trans- portation Development Agency (RTDA) plays an important role in realising proposed projects such as the ‘Kigali Ring Road’ and other 2 PARTNERSHIP READY RWANDA: TRANSPORT DP World Kigali – Kigali Logistics Platform Lowering the costs of doing business is one of the main goals A dedicated customs team inside DP World Kigali handles of the Rwandan Government. In 2016 DP World was granted final customs clearances. Imports from overseas can easily a 25-year concession for their first inland dry port in East be routed through the KLP for onward distribution to the Africa located 20 km outside the Kigali City limits. Within surrounding countries of Uganda, Tanzania, Burundi and the two years and costs of USD 35 million DP World and the DRC, a growing region of over 40 million people. Government of Rwanda realised a state-of-the-art logis- DP World already expands the platform adding new cold tics hub called DP World Kigali or Kigali Logistics Platform storage warehouses and wants to offer packing and re-pack- (KLP). It was inaugurated in October 2019 by H.E. President aging facilities in the future. Kagame and Sultan Ahmed Bin Sulayem, DP World Chairman and CEO. The logistics hub provides the following benefits to Rwan- da’s economy: Consolidation of import volumes, truck- The KLP is a secure, bonded facility spreading over 13.5 hec- turnaround times reduced from 10-14 days to just three days, tares and featuring an inland container terminal with modern a boost in the Rwandan trucking industry, efficient storage warehousing capacity of 20,000 m2, a container yard, break- and distribution of products, improved services for manufac- bulk/bulk handling and storage facilities, space for stake- turers, and local employment for some 200 staff. holders dealing with freight transport, truck parking areas and accompanying services such as customs inspections, tax The single-window cargo management system and other payment, maintenance and repair, banking and information investments in IT and automation will further increase effi- communication technology connections. ciency and reduce costs. These savings may be passed down along the supply chain to further drive growth in the region. Customs officers at the seaports of Mombasa and Dar es Salaam seal incoming containers and label them with active The KLP has an annual capacity of 50,000 TEUs. When oper- RFID tags to allow real-time tracking of cargoes en route ating at full capacity, it has the potential to save Rwandan to Kigali for complete transparency and added security. businesses up to USD 50 million a year in logistics costs. Three years after the ‘Rwanda Trade Policy’, the Ministry of Trade With the Made in Rwanda Policy the Government complemented and Industry published a study on the ‘Development of Trade the National Export Strategy by tackling fundamental supply-side Logistics and Distribution Services’ focussing on Rwanda’s central constraints negatively impacting the ability of Rwandan firms to location in the region. The study outlines strategies for four pillars: compete in domestic and international markets. Consolidation of horticultural production for exports, regional logistics centres (see Box 1), land-bridge improvements and build- In 2009 the Government of Rwanda decided to establish the Kigali ing the air cargo services market. Special Economic Zone (KSEZ). Phase I of the KSEZ was inaugu- rated in 2013 some 10 km East of the city. Today it hosts some 75 companies on 98 hectares. One of them is Volkswagen who → MADE IN RWANDA opened a factory mid-2018 to assemble cars for the local market (Polo, Tiguan, Teramont and others). Made in Rwanda was introduced as a campaign in 2015 promot- ing domestic consumption, increasing exports, and substituting Phase II expands the KSEZ by 178 hectares.