Rwanda is one of the strong African trailblazers making impressive progress towards achieving the Sustainable Development Goals. The Government has taken on an inclusive holistic approach which has enabled the implementation of policy reforms with a strong development impact. Accompanying the Government's progressive vision for trade since 2004, the EIF programme has also supported Rwanda's efforts to achieve its development goals in support of poor rural communities, in particular for women.
With firm political commitment to the process of economic recovery and national rebuilding from the effects of the 1994 Genocide, Rwanda has focused on three broad development goals in its well‑articulated Vision 2020 which includes trade. In promoting this agenda, the partners, including the EIF have funded and supported far-reaching trade diagnostics, studies and policies including those supportive of women. Thanks to this, and to further support from development partners in Rwanda such as TradeMark East Africa (TMEA), cross‑border trade (CBT) (both formal and informal) has emerged as a significant priority for national economic development. In the same footing, CBT is seen as a vital component of Rwanda's trade with its regional neighbours.
In Rwanda, CBT directly benefits the poor and can be a driver for regional peace and key to regional trade integration. Informal CTB accounts for a considerable proportion of Rwanda's regional trade, with exports estimated at US$108.3 million in 2015 and imports of US$22 million. This is a very different trade balance compared to the formal sector, where Rwanda runs a trade deficit.
It is estimated that between 70-80% of cross-border traders are women, and 90% of these women traders rely on CBT as their sole source of income. Recognizing the importance of CBT as a major component of business in the country, and a particularly important avenue for poverty alleviation with a strong gender impact, Rwanda developed a National Cross‑Border Trade Strategy. This strategy seeks to align this cluster of trade with trade-related policies and other existing Government policies focusing on a market-led approach to expand CBT.
Rwanda has 53 border crossing points, 36 of which are informal. The EIF is working with other partners in-country, such as TMEA, the World Bank, the Food and Agriculture Organization (FAO) and others to implement this strategy which seeks to establish trade markets around border areas to help facilitate CBT. To initiate this component, and in conjunction with resources from the Government, the EIF has funded feasibility studies for CBT market infrastructure, which were completed with detailed designs for six districts bordering three other EIF Countries (Burundi, the Democratic Republic of the Congo and Uganda).
In Rwanda, poor women traders cross its borders every day and make a substantial contribution to the welfare of their families and the wellbeing of their communities. They play a key role in food security, bringing basic food products from areas where they are relatively cheap, to areas where they are in short supply. The incomes they earn from these activities are critical to their households, often making the difference, for example, in whether children go to school or not.
Challenges however, remain, particularly with respect to harassment at the border with the Democratic Republic of the Congo. Other challenges include gender insensitive infrastructure when crossing the border, limited access to finance, lack of business skills and access to proper infrastructure facilities like warehouses to store products which makes it difficult to trade in perishable goods like vegetables. This often requires women traders to carry heavy sacks of traded products on their backs yet they sometimes walk long distances to buy goods at wholesale prices.
Building on this groundwork, the EIF is currently financing a project to improve the cross‑border business environment as envisioned in the Strategy, by addressing institutional mechanisms, trade‑related capacities and the strategic trade support infrastructure. The project has the overall objective of improving the livelihoods and the earning potential of those engaged in CBT in Rwanda, with a strong gender and poverty focus.
A core component of the EIF project is the establishment of two CBT markets. These market centers are particularly important for women traders, providing a safe trading space to conduct business, saving precious time as trading becomes more efficient, and reducing the frequency of carrying heavy bags of goods for long distances as goods can be stored on site. Additionally, this would offer the traders goods protection from the rain and provide cold room storage facilities encouraging trade in perishable goods which would reduce the possibility of seasonal trading. CBT markets furthermore provide an access point for services like insurance coverage, forex bureaux and banks, which facilitates business transactions. Other partners, including TMEA and the World Bank Group are scaling up the CBT market initiative with the construction of new CBT markets at other critical border points. The World Bank Great Lakes project will also invest in gender-sensitive infrastructure and a gender-informed results framework.
Beyond the physical infrastructure, the Government has also taken the lead in improving border management as well as efforts in upgrading Information and Communications Technology at the borders through regional and bilateral initiatives with neighbouring countries. Collaborative mechanisms through the EAC, Common Market for Eastern and Southern Africa (COMESA) and Economic Community of the Great Lakes Countries - CEPGL’s "Joint Action Committee for Women in Informal Cross Border Trade in the Great Lakes Region" have helped to improve conditions and simplify procedures for CBT.
To support the national cross‑border strategy, the Ministry of Trade, Industry and East African Affairs (MINEACOM) in colloboration with the Women Council, Rwanda Cooperative Authority, Pro‑femme Twese Hamwe and the Private Sector Federation have prioritized capacity building in cooperative management, entrepreneurship, border procedures and financial management. This builds on a broader Government encouraging cross‑border traders' cooperatives to organize themselves into strong institutions to be able to carry forward this agenda to future generations. Through operating in cooperatives, the women cross‑border traders are in a stronger position to be able to secure loans to expand their activities and businesses. The EIF support is generated in a coordinated manner with that of other partners including amongst others FAO, TMEA and the World Bank. The EIF project's contribution to date has included the training of 720 Cooperative members (including 495 women) from across 9 different districts.
Working with the Government and interested partners, the EIF support has helped in triggering additional investments by other Development Partners that are now providing support to reduce the costs faced by traders. For example, the World Bank has committed US$26 million, and TMEA has committed US$6.7 million in the current phase. UN Women, FAO and the New Partnership for Africa's Development have also made commitments, while other partners, such as the COMESA, the African Development Bank and the European Union are exploring how they could support this key area.
To both help coordinate CBT interventions, as well as the ongoing investments from development partners, MINEACOM have established a specific Cross‑Border Trade Coordination Unit with support from the EIF project and TMEA. The Unit coordinates and implements the National Cross‑Border Trade Strategy ensuring the mainstreaming of CBT into national programmes. It provides technical expertise, including the design of management models for the CBT Markets. For sustainability, the CBT Unit has been institutionalized and integrated into the Trade and Investment Development Division of MINEACOM to ensure the CBT projects' continuity beyond the projects' end phase.
Rwanda is one of the forerunners in Africa in making trade easier for cross-border traders, leading to long‑term positive change for border communities. As a cross‑border trailblazer, Rwanda is reinforcing its frontiers and sending a strong message to the next generations that borders are not meant to restrict traders, particularly women, but to help facilitate their business transactions which make a major economic contribution to the nation.
"If the market would be built… We will be happy to do business at that place and it is near the border. It will reduce the many journeys to the neighbouring country and we can buy and sell goods on site." Nyiransengimana Bora, Secretary-General of UNAMA UKORE Cooperative/Rubavu