The industrial sector in Rwanda is still small but quite competitive. The players are primarily engaged in production and/or processing of wood, tobacco, cement, textiles, agricultural products, small scale beverages, soap, furniture, shoes, plastic goods, tea and coffee. Others include chemicals, construction, printing, paper, engineering and methane gas. Thus, the economy is heavily dependent on the primary sector, with industry strongly tied to processing of primary products.
It is estimated that close to 70 per cent of industry in Rwanda is located in Kigali with little going on in upcountry urban centres.
In 2012, the industrial sector in Rwanda accounted for 16% of Gross Domestic Product. The formal industrial sector today consists of 4752 firms of which 97% are manufacturing, 2% construction and 1% mining and quarrying firms
Industrial Policy Objectives
Rwandan Industrial Policy promotes the diversification of the economy into higher value-added sectors and generates new areas of comparative advantage. The objectives are as follows;
- Increase domestic production for local consumption
- Improve Rwanda’s export competitiveness
- Create an enabling environment for Rwanda’s industrialization
The Industry sector policy is based on the following principles:
- Organize a progressive disengagement of the Government from the productive sector and promote private sector development;
- Training in the use of new manufacturing technologies.
- Organizing Industries that are competitive, environmental friendly and sustainable;
- Elaboration of the legal and regulatory texts governing the industry sector;
- Promotion of Agro Industry concentrating on value addition.
- Encouraging the cooperation between learning and research institutions with the industrial sector
- Decentralization of the industrial activities
- Promotion of competitiveness in the industrial sector towards growth in productivity
- Promotion of Micro, small, and medium enterprises.
Challenges facing industrial sector in Rwanda
- Challenges to rapid industrialization of Rwanda is mainly linked to serious inadequacy of national energy supplies.
- Inadequate pollution control as factories have no proper liquid-waste disposal systems, and consequently pollute soils, groundwater and the surface water.
- Out dated technologies, many of the factories use out-dated technologies that are associated with energy demands and waste generation to levels that have adverse impact on the environment, and render the operations expensive and unsustainable.