Rwanda Governance Board Ikigo cy’Igihugu Gishinzwe Imiyoborere Office Rwandais de la Gouvernance Dr. Félicien USENGUMUKIZA D/CEO, Research and Monitoring Rwanda Governance Board (RGB) Nairobi, June 24 th 2013 National Industrial Policies in the Regional Industrialisation Framework: How to Create the Linkages? The Case of Rwanda
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Rwanda Governance Board
Ikigo cy’Igihugu Gishinzwe Imiyoborere
Office Rwandais de la Gouvernance
Dr. Félicien USENGUMUKIZA
D/CEO, Research and Monitoring
Rwanda Governance Board (RGB)
Nairobi, June 24th 2013
National Industrial Policies in the Regional
Industrialisation Framework: How to Create the
Linkages?
The Case of Rwanda
Industrial Sector in Rwanda
The industrial sector is currently small, contributing on average around 15 per
cent of GDP annually;
In order to reach the Rwanda Vision 2020, it requires the share of industry to
increase to 26% of GDP
Industry currently employs just 4 per cent of the workforce. This also
requires the industrial transformation in order to achieve the employment
targets ofVision 2020 - non-farm employment will reach 1.4 million;
Rwanda Industrial Sector versus Regional integration: Challenges and
Opportunities :
EAC and COMESA with population of 450 million and combined GDP of close to
$500 billion. Rwandan firms have an opportunity to serve this market, but will
also face greater competition from businesses in countries with larger and
more sophisticated industrial sectors, such as Egypt and Kenya. Effective policy
is required to ensure that Rwandan enterprise can compete regionally and beyond.
Composition of Industrial Sector by Gross Domestic
Product, 2010
Source: MINICOM, April 2011
Ministry of Trade and Industry Focus areas
Enabling
Business
Environment
Industrial growth for Domestic
Production and Export Diversification
SME Growth for Job Creation
Streamlining the commodity value chains
while promoting fair competition and
protecting consumers
POLICY DESIGN: INCREASE DOMESTIC PRODUCTION FOR
LOCAL CONSUMPTION AND EXPORT COMPETITIVENESS
Time based model for providing sector-specific support
SHORT TERM MEDIUM TERM LONG TERM
Promote new
desirable sectors as
they become feasible
Reduce support to
successful sectors &
provide support to
new feasible sectors
Improve the feasibility
of desirable industries
& promote feasible
sectors
Construction
materials, Bio-plastics
and other high tech
industries
Pharmaceuticals, Chemical
products (including fertilizers)
Textiles, Mineral processing, Construction
materials, Dairy, Agro-processing, Diversified
Tourism
Tea, Coffee, Mineral and Tourism
2010
2015
2020
Cluster Progression Ladder, 2011 - 2020
Commodities &
services
+ Processing & value
Addition
+ Low tech Manufactures
+ Medium to High Tech
Manufactures
DIVERSIFICATION AND VALUE ADDITION
Priority areas of intervention in Rwanda’s Industry
sector
1. Infrastructure
2. Human Resources
3. Improved Access to Finance and Investment
4. Trade Facilitation
5. Technology, Research and Innovation
6. Raw Materials and Industrial Inputs
7. Regulatory Environment
8. Environmental Sustainability
National Industrial Policies
Regional Industrialisation Framework
EAST AFRICAN COMMUNITY
INDUSTRIALISATION POLICY 2012 - 2032
The mission of the EAC Industrialization Policy (2012-2032)
is “to create a market driven, regionally and
internationally competitive and balanced industrial
sector based on the comparative and competitive
advantages of the EAC Region”.
1. Gains from inter-industry trade reflect comparative advantage.
2. Gains from intra-industry trade reflect economies of scale (lower costs) and widerconsumer choices.
3. The monopolistic competition model does not predict in which country firmslocate, but a comparative advantage in producing the differentiated good will likelycause a country to export more of that good than it imports.
4. The relative importance of intra-industry trade depend on how similar countries
are.
• Countries with similar relative amounts of factors of production are predicted
to have intra-industry trade.
• Countries with different relative amounts of factors of production are predicted
to have inter-industry trade.
Intra-industry trade, a challenge for African Region
According to standard industrial classifications, about 25% of world trade is intra-industry trade.
Comparative of Industrialization between Africa and East Asia