Publication - Working Paper
This research paper reviews detailed data collected by the Rwanda Revenue Authority to consider the structure and behaviour of three value chains in Rwanda. This data analysis exercise complements a larger IGC study into regional value chains. Consequently, we consider the structure and behaviour of the maize, dairy and tourism value chains.
This research paper found the following key findings:
We find that services make up 40 percent, 38 percent and 46 percent of the total number of suppliers in the maize dairy and tourism sectors respectively. This includes vital financial services, transport services, and professional services. This provides strong evidence in the Government of Rwanda’s support to pre- and post-production service growth in Rwanda, a key comparative
In maize, key imports include fertiliser and machinery. In dairy, packaging plays an important role. In tourism, construction materials are vital. All three of these import items could be produced locally, providing an opportunity for import substitution.
One of the founding aims of the EAC is to encourage new export diversification. Rwanda has shown impressive growth in non-traditional exports to the region. These exports are primarily in agroprocessing especially in wheat and maize flour, hides and skins and dairy.
Some firms in Rwanda have substantially more market power than others. In the dairy sector, there are very few processors of dairy products. This lack of competition could lead to monopoly pricing given the sector relies heavily on one large buyer. This is, however, likely to be offset by the home processing of milk by informal firms.
Following this research, we make the following recommendations:
The Government may wish to encourage new entrants into these sectors and can utilise this data to encourage foreign investors to enter.
The Government may wish to support financial services, transport services, and professional services through reduced taxation.