Increasing and diversifying exports is key to Rwanda’s economic transformation and a focus point of the new BRD strategic plan. As the Second Generation of Economic Development and Poverty Reduction Strategy (EDPRS II) indicates that export growth targets should grow by 28% so the management of BRD created an Export department that is going to play an instrumental role in catalyzing private investment that will enable Rwanda to reach its exports targets.
To address key challenges faced by exporters such as limited access to finance, weak supply chains for processors, inadequate export infrastructure and a small exporter base due to a lack of technical skills, the export department focus on four key interventions namely the Management of the Export Growth Facility (EGF), the implementation of The Rwanda Growth Anchor Initiative (RGAI), the establishment of Advanced Factory Units & SEZ Infrastructure and the launch of a Technical Assistance Program and will invest 15 billion Rwandan Francs in strategic projects in horticulture, agro-processing or manufacturing sectors so as fast track the attainment of National Export targets. Under the Export Growth Facility, the Department of Export Financing in BRD will manage the government-driven facility which aims to foster SMEs active in the export sector through three separate but interlinked components:
- Investment Catalyst fund: to encourage private sector investments in exports through subsidized loans at 10% interest per annum. Previously, firms were getting loans at average short and long term interest rates that ranged from 17% to 19%.
- Matching grant fund: to encourage penetration into external markets by offering financing of up to 50% of total project cost not going beyond $100,000 in funding.
- Export Guarantee facility: to enhance credit worthiness of exporters (majorly short term) by providing guarantees of up to 80% of value of goods to export.
The Rwanda Growth Anchor Initiative is to address reliability and effectiveness of supply chain for exporting industries by means of;
- Providing soft capital to participants in the anchor firm’s supply chain through a 2:1 Matching Grant;
- Wherever possible, linking SMEs to processors and exporters though BRD networks;
- Provide capital for feasibility study and pilot projects of innovative technologies that have a demonstrable impact on integration;
- Special Economic Zones (SEZs) are increasingly used as an economic policy tool worldwide. The department will focus on financing the provision of infrastructure for export via PPP to support special economic zones and industrial parks that will offer world class infrastructure and logistics.
- Technical Assistance Program will be introduced to upgrade capacity of SMEs with high potential to enter and compete in new markets.