Rwanda trade deficit with EAC part­ners widens

Re­port cites in­creased im­ports of ce­ment, maize, sorghum and rice from the re­gion

The East African - - NEWS - By KABONA ESIARA

The wors­en­ing trade bal­ance is on ac­count of in­creased im­ports ... out­weigh­ing ex­ports.”

Na­tional Bank of Rwanda

Rwanda’s trade deficit with its EAC peers widened by $16 mil­lion (Rwf14 bil­lion) in the first half of 2018, as the coun­try opted for food and ce­ment im­ports from the bloc to plug do­mes­tic pro­duc­tion gaps.

Ac­cord­ing to new trade data from the Na­tional Bank of Rwanda, the trade deficit in­creased to $152.83 mil­lion (Rwf132.2 bil­lion) from Rwf118.3 bil­lion ($136.81 mil­lion) in the six-month pe­riod end­ing June 2018, at­trib­uted to in­creased im­ports of ce­ment, maize, sorghum and rice from the re­gion.

“The wors­en­ing trade bal­ance is on ac­count of in­creased im­ports — by 12 per cent from $221.67 mil­lion to $248.26 mil­lion — out­weigh­ing ex­ports,” the cen­tral bank said.

Rwanda im­ported more ce­ment af­ter the largest man­u­fac­turer, Cimerwa, shut down its plant for main­te­nance and up­grade in March and April. A sec­ond plant, Ki­gali Ce­ment, owned by trou­bled Nairobi Se­cu­ri­ties Ex­change-listed ARM Ce­ment, also sus­pended pro­duc­tion dur­ing the pe­riod un­der re­view, even as de­mand from the re­bound- ing con­struc­tion in­dus­try rose.

There was a 31 per cent in­crease in ce­ment im­ports, from 117,959 tonnes in the first half of 2017 to 154,486 tonnes dur­ing the same pe­riod this year.

The im­ports were to plug a 14.2 per cent hole in local ce­ment pro­duc­tion as de­mand shot up by 12.1 per cent. Ac­cord­ing to the cen­tral bank, ce­ment de­mand in the first half of this year reached 277,695 tonnes from 247,831 tonnes dur­ing the same pe­riod last year.

Rwanda is also grap­pling with low pro­duc­tion of maize to feed a grow­ing pop­u­la­tion and sup­ply raw ma­te­ri­als to in­dus­tries such as brew­eries, maize millers and food pro­ces­sors.

African Im­proved Foods (AIF), a maker of soya and maize flour for chil­dren and moth­ers, has been im­port­ing from Uganda.

On the other hand, Rwanda’s ex­ports to the EAC in­creased to $95.43 mil­lion (Rwf84 bil­lion) in the six months end­ing June 2018 from $84.86 mil­lion (Rwf74.4 bil­lion) in the same pe­riod last year.

Out­side the re­gion, Rwanda’s im­port bill has re­mained high, with new data from the cen­tral bank in­di­cat­ing that in the first half of 2018 for­mal im­ports rose by seven per cent in value to $1,127.4 mil­lion, from $1,053.8 mil­lion dur­ing the cor­re­spond­ing pe­riod of 2017.

Rwanda im­ported more con­sumer goods, cap­i­tal goods, in­ter­me­di­ary goods and en­ergy and lubri­cants.

Rwanda’s ex­port earn­ings have in­creased due to high global com­mod­ity prices. In first six months of this year, ex­port earn­ings in­creased by 23.2 per cent to $463.16 mil­lion (Rwf405 bil­lion), from $375.91 mil­lion (Rwf330 bil­lion) dur­ing the same pe­riod in 2017 while the vol­ume in­creased by 18.4 per cent

“The in­crease in ex­ports value is mainly at­trib­ut­able to the good per­for­mance in tra­di­tional ex­ports (28.7 per cent), non-tra­di­tional ex­ports (19.1 per cent) and re-ex­ports (22.2 per cent),” said the cen­tral bank.

Pic­ture: File

Rwanda’s in­creased trade deficit with EAC mem­bers has been partly at­trib­uted to an in­crease in ce­ment im­ports.

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