A delegation of 56 Rwandan business leaders visited the Central African Republic (CAR) last April and soon after formed a company, the Investissement Futur de l’Afrique (IFA) Ltd, as they looked to tap into opportunities there.
The firm put in place a leadership structure, acquired office premises and set about starting operations in a wide range of areas such as agriculture and mining.
“We are trying to strategize on how to benefit, in an orderly manner, from the opportunities being offered by different countries to the Rwandan business community,” said Theoneste Ntagengerwa, the Private Sector Federation (PSF) Spokesperson.
In this regard, he said, one activity being implemented is the trade missions to these welcoming countries.
Diego Twahirwa, a young Rwandan entrepreneur in agribusiness. He landed a deal to supply 50,000 tonnes of dried chili worth $100 million to China (Courtesy)
Trade missions have always been done to promote Rwandan exports, but about five years ago, there was a shift towards helping Rwandans to invest abroad.
Rwandan business delegations have been to China, Turkey and elsewhere and more trips are expected in other countries in the future.
PSF, with support from government, also opened a multi-service centre in the Republic of Congo.
President Faustin-Archange Touadéra who visited Rwanda last August welcomed and promised to facilitate Rwandan entrepreneurs willing to invest in his country.
In CAR, Rwandan investors will enjoy incentives such as tax holidays of up to 10-years if they invest in rural areas and three years if they invest in urban areas. The national carrier, RwandAir, now operates flights to the capital, Bangui.
Trade and business opportunities there are plentiful as the vast natural resource-rich country is blessed with unexploited arable land and forestry resources.
According to reports, roughly, a third of CAR’s nearly 623,000 square kilometres is suitable for farming yet only about three per cent is under cultivation.
Jeanne Mubiligi, Investissement Futur de l’Afrique’s executive, said: “We started our company in April last year, and we got an opportunity in gold mining. That was our first investment, small scale gold mining, but there are plenty of other opportunities being considered.”
Mubiligi added: “There are many other investment potentials in agriculture and related sectors as well as in trade and logistics. We want to do trade in commodities and logistics; we have real estate investment in the pipeline too.”
The CAR was not the only country’s whose business opportunities the local business community explored last year.
According to Ntagengerwa, other trade missions organised include those to Finland – a potential gateway to the larger market in Russia and the Nordic countries.
According to sources, Rwanda and Finland signed an agreement seeking to promote, encourage and increase trade and investment opportunities that enhance sustainable development in the two countries.
It is meant to encourage trade and investment cooperation in 12 fields that include: manufactured products, agro-processed products, industrial development, SME and women economic empowerment, transportation, forestry and the extractive industry.
Another trade mission headed to neighbouring DR Congo.
Last January, DR Congo President Félix Tshisekedi met the then Rwandan Minister of Trade and Industry, Soraya Hakuziyaremye, and Rwanda’s envoy in Kinshasa, Vincent Karega, to discuss ways in which the neighbouring countries can increase their economic and trade ties.
Their meeting came after, among others, RwandAir’s maiden commercial flight to Kinshasa, boosted business and strengthened commercial ties between the two countries.
A trade mission to Zimbabwe was cancelled due to the Covid-19 pandemic but it could happen this year.
While in Kigali last October, Allan Majuru Chief Executive Officer at ZimTrade, Zimbabwe’s trade development and promotion agency, said “opportunities are limitless,” and all they want to do is to make sure that “we provide a platform for our countries to trade efficiently and competitively.”
Asked what key business or trade and investment opportunities Rwandan investors could look forward to in her country, Yvonne Gundu, Spokesperson of Zimbabwe’s Ministry of Industry and Commerce, said that “Zimbabwe is one of Africa’s leading destinations for both trade and investments.”
She added: “We have a stabilizing economy which is endowed with a huge array of natural resources, including minerals, climate, tourism destinations, and fertile soils among others.”
Gundu shared a rundown of “some of the areas which Rwandans can consider for trade and investment.”
Her list included jewellery manufacturing, chrome smelters and platinum refineries, tourism infrastructure, fishing, agro-processing, steel manufacturing, solar power generation, logistics, lithium battery manufacturing, cutting and polishing of black granite, timber processing and the dairy products value chain.
There is also hydro power generation, value addition of tea and coffee products, diamond cutting and polishing, fertiliser production, thermal power generation, sugar production, beef production, and development of tourism infrastructure and amenities.
As noted, Rwandans can also try their luck in the establishment of foundries and metal refineries; the cotton to clothing value chain, and leather and leather products value chain.
The objectives of the trade missions, Ntagengerwa said, are three. Firstly, to explore opportunities available in a country. Secondly, to have business to business meetings whose major aim is networking so that local business people meet potential clients as well as business partners in other countries.
Thirdly, is for the necessary interactions with business promotion institutions in the countries visited so that “we can discuss important things and, for example, get to know the right procedures of getting into business in each country.”
“The trade mission is one of the strategies but we also have a desk, here at PSF offices, which facilitates whoever wants to venture abroad for business. We provide information and even remain in touch and help solve issues whenever they crop up.”
In the first quarter of this year, it is hoped that a trade mission to Zimbabwe can be prepared. Another to Mozambique is also on the list even though no sure date is yet fixed.
Mid last month, Gil Bires, Director General of Mozambique’s investment and export promotion agency, Agência Para a Promoção de Investimento e Exportações (APIEX), told The New Times that Rwandans are welcome to make the most of Mozambique’s numerous investment opportunities.
Bires said they are open and have “a very attractive regulation on investment which is friendly for foreign direct investments.”
Among others, Mozambican investment law grants tax and customs benefits depending on the amount, location and sector of investment activity. Discussions are underway to look into how RwandAir can have direct flights to Mozambique.
Government commissions crop insurance project – DailyNews – DailyNews
THE government and its partners have set aside over US$1million under the Area Yield Index Crop Insurance pilot project for 30 000 farmers who received Pfumvudza inputs this agriculture season.
In a statement yesterday, ministry of Agriculture permanent secretary, John Bhasera , said that climate financing would increase farmers’ resilience against negative impacts of erratic weather patterns.
“The piloting of the Area Yield Index Crop Insurance will this season be undertaken in Rushinga and Mwenezi Districts covering about 30,000 smallholder farmers under the Pfumvudza programme for a sum insured of over one million US$”.
“In-order to be able to verify usefulness, relevance and have proof of concept for the Area Yield Index Crop Insurance, we are starting this agricultural season with a pilot exercise with financial support from a highly committed development partner called Mercy Corps.
“Pula Advisors GmbH (Pula) has been contracted by Mercy Corps’ AgriFin Digital Farmer to provide technical assistance for the design and implementation of a comprehensive Area yield index insurance on the inputs distributed under the Pfumvudza initiative in Zimbabwe,” Bhasera said.
The secretary said thes programme will later accommodate more farmers as the initiative will protect Pfumvudza beneficiaries’ crops.
“Mercy Corps’ AgriFin Digital Farmer is a two-year, $5 million initiative that aims to support the expansion of high-impact, digitally-enabled services to at least one million farmers and to expand the services to a further five million smallholder farmers in partnership with Gates and Bayer foundation. This expansion effort will be delivered by growing ecosystems of diverse service providers and building farmer income, productivity and resilience by 50 percent”
“The task team chaired by the Agricultural Finance Corporation comprises the ministry and relevant stakeholders is being technically advised by Pula Advisors and they have so far green-ticked a number of key elements and are ready to roll the trial run during this agricultural production season covering farmers under the Pfumvudza/Intwasa programme,” Bhasera explained further.
He said while the Presidential Input Scheme was climate proofed, farmers were still vulnerable to climate change hence the insurance to reduce crop loss.
“The ministry has upgraded its agricultural transformation strategic options basket by bringing in a crop insurance product pioneered in the region. The inclusion of the Area Yield Index Crop Insurance in the basket of inputs for Pfumvudza/Intwasa smallholder farming beneficiaries under the technical guidance of Pula Advisors is meant to protect the farmers from the heavy impact of climate change.
“The Pfumvudza programme is based on climate-proof production to certain extent, according to the results of the 2021 crop and livestock assessment report by the ministry. The average maize yield for farmers under Pfumvudza was higher than for non-Pfumvudza farmers .There is scope in understanding and acting against climate change and its potential impact.
“Smallholder farmers in Zimbabwe are increasingly exposed to systemic climate change risks such as droughts, dry spells, delayed seasons, floods, hailstorms, pests, diseases and many more,” Bhasera said.
Duty-free boost for Zimbabwe agriculture – The Zimbabwe Mail
The Zimbabwe Revenue Authority (Zimra) has listed import duty and Value Added Tax (VAT)-free agricultural equipment while the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development has introduced a crop insurance product for Pfumvudza/Intwasa beneficiaries as the Government continues to implement a cocktail of measures to boost agricultural production.
Zimra this week said machinery such as manure spreaders, fertiliser distributors, hay balers, combine harvesters, machines for sorting eggs, machines for preparing animal feed, tractors and poultry incubators would be imported duty and VAT-free.
Stakeholders hailed the move as critical to transforming the agricultural sector for economic growth and prosperity.
Zimra said importers were required to engage clearing agents registered with the tax collector.
“The goods are treated as commercial importations. Clearance is to be done through a bill of entry and a tax clearance certificate is needed in order to be exempted from payment of presumptive tax. Failure to produce such attracts a presumptive tax of 10 percent of the value for duty purposes,” said Zimra.
The decision was greatly welcomed by farmers who said it supported their efforts to grow the agricultural sector by easing the means of production and lowering the burden on most farmers who desperately needed modern equipment and technology.
Mrs Martha Macheke from Banket said it gave relief to those who were importing machinery aimed at improving farming.
“Value addition as well as mechanisation are both critical for us to be sustainable. This type of equipment industrialises and modernises our agriculture through innovation development.
“Mechanisation, for example, leads to precision farming which maximises efficiencies, lowers post-harvest losses, and increases the profits that a farmer can make,” she said.
Another farmer from Raffingora, Mr Tendai Masocha said the scrapping of duty on some equipment would enable them to access machinery at a lower cost and boost the mechanisation programme.
“It has been expensive for farmers to buy machinery, but without duty, it becomes affordable. This is a good move, especially on machinery,’ he said.
Mr Albert Mumanikidzwa of Chinhoyi echoed similar sentiments.
“Our challenge is that sometimes we do not have access to foreign currency. Hopefully, we will have easy access to foreign currency so that we can import machinery and boost production and alleviate poverty,” he said.
The Government had been making huge efforts to revive the agriculture sector by incentivising the importation of machinery.
On the other hand, the area yield index crop insurance, which will be technically directed by Pula Advisors, is meant to protect Pfumvudza farmers from heavy impact of climate change vagaries.
Beginning in the 2021/22 agricultural season, the Ministry will implement a pilot exercise with financial support from development partner, Mercy Corps Zimbabwe.
Pula Advisors has been contracted by Mercy Corps’ AgriFin Digital Farmer (ADF) to provide technical assistance for the design and implementation of a comprehensive area yield index insurance on the inputs distributed under the Pfumvudza initiative in Zimbabwe.
Mercy Corps’ AgriFin Digital Farmer (ADF) is a two-year, $5 million initiative that aims to support the expansion of high-impact, digitally-enabled services to at least one million farmers and to expand the services to a further five million smallholder farmers in partnership with Gates and Bayer foundation.
The expansion efforts will be delivered by growing ecosystems of diverse service providers and building farmer income, productivity and resilience by 50 percent while reaching 40 percent women.
Permanent Secretary in the Ministry of Agriculture, Dr John Basera said the ministry established a team chaired by the Agricultural Finance Corporation (AFC) Insurance to collectively model out piloting of the Area Yield Index Crop Insurance.
“The task team, which comprises the ministry and relevant stakeholders, is being technically advised by Pula Advisors and they have so far green-ticked a number of key elements and are ready to roll the trial run during this 2021/22 agricultural production season covering farmers under the Pfumvudza/Intwasa Programme,” he said.
“The piloting of the area yield index crop insurance will this season be undertaken in Rushinga and Mwenezi Districts covering about 30 000 smallholder farmers under the Pfumvudza programme for a sum insured of over USD1 million.
“Recognizing the value likely to be created, the Ministry commits itself to fully supporting the associated activities and has activated its structures and institutions to ensure the piloting exercise is a success,” he said.
Dr Basera commended FBC Insurance (Pvt) Ltd for coming on board as the insurer for the pilot exercise.
Ministry chief director, strategic policy planning and business development Mr Clemence Bwenje said the pilot exercise would be exciting as it was premised on the objective of providing proof of concept, showing the benefits, costs, relevance and possibility of scaling out the area yield index crop Insurance next season.
“The evaluation to be produced by the task team will be instrumental in informing policy to the farming community, stakeholders and Government as it will highlight on the quality and scalability of the insurance product,” he said.
Mr Bwenje emphasized that the overaching impact of rolling out such insurance products was to sustainably and affordably protect smallholder farmers from key agricultural risks through the use of insured inputs, which in turn encouraged better farming practices, raised yields while providing compensation (payouts) to support farmer resilience when losses occurred.
“The assurance is that the project will be highly technology and data-driven, enhancing Government’s delivery capabilities and introducing innovations in digital insurance to the sector.
“Insurance in agriculture has been the missing link also given its ability to create opportunities for agricultural investments”, Mr Bwenje said.
Pula Advisors, regional manager for Anglophone Africa, Ms Cynthia Tapera, said the area yield index crop insurance would insure farmers’ harvest.
“It is an insurance cover that insures farmers against a pre-set historical benchmark. The perils covered in this product are windstorm, frost, excessive rainfall, heatwave, hail, floods, drought, pests and diseases. The pilot will focus on the maize value chain.
“Climate change is upon the whole world and the results are clear for everyone to see. The damaging impact is felt by the smallholder communities with no other sources of income other than agriculture,” she said.
Smallholder farmers in Zimbabwe are increasingly exposed to systemic climate change risks such as droughts, dry spells, delayed seasons, floods, hailstorms, pests, diseases and many more hence the need for insurance service.- Herald
Zimbabwe's operating environment remains vulnerable – The Zimbabwe Mail
HARARE – Zimbabwe’s operating environment remains vulnerable to both internal and external shocks that may have negative impact on key economic enablers, according to Fitch Solutions, a leading global economic research firm.
The research company in a summary report on Zimbabwe Country Risk, said the country remains vulnerable to factors such as adverse weather conditions that can impact agriculture and electricity supply, commodity price shocks, supply chain bottlenecks, still-low industrial productivity and hard currency shortages.
“While efforts to liberalise the currency regime are easing liquidity challenges and inflation gradually, policy uncertainty, risk of social unrest and the impact of capital controls continue to dampen sentiment,” said the company.
It added that businesses operating in the country will also face rigid labour market regulations, drawn-out legal disputes and onerous taxes particularly in the mining sector.
The mining sector has been paying workers in both local and foreign currency, resulting in challenges in taxation related issues.
The country’s economy is projected to grow 5,5 percent in 2022 underpinned by higher output in mining, manufacturing, agriculture, construction as well as the tourism sector.
However, the industry and mining sector has since warned that continued power cuts could derail first quarter 2022 targets due to lost production time, which will have a bearing on growth.
The Zimbabwe Electricity Supply Authority (ZESA) recently announced that there will be increased load shedding due to maintenance works at Kariba Hydro Power Station, one of its power generating
sites with capacity to produce 1 050 Megawatts.
Chamber of Mines of Zimbabwe president, Isaac Kwesu, said the increase in load shedding has a greater impact on the production side of the mining sector.
“Many businesses have reverted to alternative power sources such as fuel-powered generators which have become even more expensive to operate given the increase in global oil prices that has rippled to the local US-dollar pump prices due to power supply failures,” he said.
The Confederation of Zimbabwe Industries (CZI), has often highlighted that the issue of power has remained a cause for concern hence the industrial lobby group continues to engage the power utility on the issue.
That said, Fitch noted that Zimbabwe has significant human capital and vast resource potential that could drive economic development, contingent on the implementation of policies that support legal, fiscal and monetary policy reforms.
“This will be a long-term project intrinsically tied to improved governance and transparency, increased investment openness and meaningful re-engagement with multilateral lenders and the international community in the years ahead,” reads part of the report.
The research firm, in its recent report, also highlighted that Zimbabwe’s current account surplus is expected to narrow to 1,4 percent of Gross Domestic Product (GDP) in 2022 from 2,4 percent in 2021 as demand for consumer and industrial imports strengthens amid an uptick in economic activity.
Fitch Solutions, which is part of reputable global credit rating agency Fitch Ratings, said while the secondary income surplus will remain substantial given ongoing aid inflows, this will be outweighed by widening deficits in the services and primary income accounts as the tourism sector stages only a weak recovery, and profit remittances by mining companies rise.
The research firm said demand for consumer and capital imports will remain solid as inflation slows further, thus supporting spending power, and construction activity rises as the Government invests in infrastructure. – Business Weekly
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