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Services Policy Review: Rwanda

The Rwanda Services Policy Review, prepared by the United Nations Conference on Trade and Development (UNCTAD), aims to investigate regulatory, institutional and policy gaps and make recommendations on how to address such gaps in the sectors of tourism and information and communications technology (ICT).

Over the last decade and a half, Rwanda has implemented significant economic reforms, including privatization, investment facilitation and trade liberalization, which helped achieve strong economic growth. The services sector, which now accounts for half of its gross domestic product (GDP), played a major role in the recent economic boom. International trade has been a key factor in expanding the Rwandan economy far beyond national markets, as exports of goods and services increased from $70 million in 1995 to over $859 million in 2011; services increased as a share of total exports from 24–46 per cent, with a peak at 64 per cent in 2009.

Nevertheless, Rwanda continues to run a large trade deficit, estimated at $1.4 billion in 2012, in both its merchandise and services trade.1 The deficit in goods is generally valued at over four times the value of exports. In addition, the long distances to ocean ports and regional railway networks owing to its landlocked nature elevates the cost of merchandise trade for Rwanda. These conditions heighten the importance of services exports in bringing an end to the sustained trade deficit and rising exports.

Three cross-cutting areas could contribute to strengthening the performance of Rwanda’s overall services economy:

  • The development of a culture of quality in the services sector, enabling Rwandan service firms to compete effectively with their regional counterparts. In this regard, support programmes ensuring that quality standards are adopted and maintained in the services subsectors and that skills are enhanced are crucial;

  • Increased cooperation with regional partners to strengthen regulatory institutions and policymaking in the area of services, particularly those that have been prioritized for liberalization in the East African Community (EAC), the Tripartite Free Trade Agreement and the Economic Partnership Agreement (EPA) to ensure that proper institutional and regulatory frameworks are in place prior to liberalization. This study finds there is need for a more systematic approach at the regional level to promote business ventures and joint projects relating to services;

  • Enhanced collaboration and communication between the private and public sectors, regarding business development (i.e. improved partnerships with foreign companies for skills enhancement and technology transfer) and infrastructure development (for instance using public–private partnerships). The study finds that lack of access to finance and skills continues to hinder the proactive participation of the private sector in the development of the services economy in Rwanda. Strengthening the capacity of local services suppliers requires specific policy measures and targeted strategies: The private sector is in a privileged position to inform policymaking in this regard, providing first-hand information on obstacles to trade and business operations.

Services Policy Review: Rwanda (UNCTAD/DITC/TNCD/2013/6)
10 Sep 2013
 
Services Policy Review: Rwanda - Overview (UNCTAD/DITC/TNCD/2013/6)
26 Feb 2018