Rwanda’s arduous journey
Rwandan infrastructure minister Claver Gatete took a look at transport conditions in his country in a keynote address to the East African Logistics Conference recently. He concluded that although a lot has already been achieved a great deal remains to be done.
As a rather small landlocked country at the heart of Africa, Rwanda is dependent on its (large) neighbours in many fields of life and the economy. This applies particularly to energy supplies as well as to the transport of goods. So it was fitting that the East African Freight Forwarders’ Association’s third Global Logistics Convention, organised in partnership with the Rwanda Freight Forwarders Association, took place in the Rwandan capital of Kigali in August.
Transport costs remain high
Rwanda’s infrastructure minister Claver Gatete took the opportunity to show in which areas his country has made progress in recent years – and in which fields it still lags behind. He pointed out that Rwanda has already greatly simplified the way of doing business in the country, but that overall, transport costs nevertheless remain far too high, at a massive 30 – 40% of the total cost of a product.
The minister cited inadequate infrastructure as well as inconsistent customs procedures amongst the reasons for this. In recent years Rwanda has implemented a number of trade facilitation initiatives with other countries, however. These include the introduction of Rwanda’s electronic single window, which enables faster clearance of imports and exports and improves efficiency, transparency, and accountability in revenue collection.
Major seaports coming closer
Outsiders have a slightly more critical assessment of the situation. According to the Overseas Development Institute, non-tariff barriers to trade affecting transport in East Africa are estimated at between 3 and 16% of the cost of a product. In his speech Gatete emphasised that these barriers are constantly decreasing, however, elaborating that “most non-tariff barriers to trade have now become history, as a result of our concerted efforts.”
For Rwanda, a country without any railways or direct access to the sea, road transport routes to its large East African neighbour Tanzania and thence to Kenya are crucial. A decade ago, transport from the ports of Mombasa and Dar es Salaam to Kigali took 17 days, on average. Today transit times amount to about 3 – 5 days, with transport costs also falling by 56% in this period.
The logistics players in the region place great hope in digital solutions. Since electronic load tracking has become increasingly widespread, unnecessary stops on regional roads and the resulting bribes have been massively reduced.
Rising up the rankings
Rwanda’s efforts to improve conditions for the transport industry are also reflected in the World Bank’s Logistics Performance Index (LPI). In 2016, Rwanda was ranked 62nd worldwide and 7th in Africa. In last year’s LPI, the ‘Land of a Thousand Hills’ was ranked 57th. Only South Africa and Ivory Coast were placed higher in Africa.
In the medium term, the chances that Rwanda will continue to improve the conditions in which logisticians and all business players have to operate are intact, also because the economy is growing strongly. The country’s geographical location and its rather small size actually leave it with very little choice.
