AUTOMART AFRICA - AUTOMOTIVE INDUSTRY DIRECTORY | KENYA | TANZANIA | ETHIOPIA

The number of vehicles imported into the country is picking up, boosted by a combination of the lifting of the 10-year ban on right-hand-drive vehicles and reduced taxes on cargo trucks and buses.

According to experts, a developed automobile industry is likely to generate enough revenues to fund development projects.

However, in Rwanda the industry has been struggling.

Despite the troubles, however, the country recorded a 6.4 per cent growth in units imported between July 2014 and June this year. According to official figures 356 more vehicles were imported into the country compared with the same period last year.

The Rwanda Revenue Authority (RRA) Customs Services Department registered 223 newly imported right-hand-drive heavy trucks after the ban was lifted early this year.

Fuel and spare parts

"RRA will collect more revenues as more Rwandan will own cars, which consume more fuel and buy spare parts," said a top government official.

Between July 2014 and June this year, RRA Customs department had registered 5,865 vehicles, raking in Rwf53 billion in revenue.

However, compared with other countries in the region, Rwanda's vehicle imports are the lowest, meaning the country is not exploiting the potential of a booming automobile industry.

Industry players cite "high" taxes and distorted market by the single unit importers who inflate pieces and lack of long-term finance to slow growth of the sector.

Analysts called for policy shift that will allow many Rwandan own cars to boost trading in spare parts, fuel consumption whose imports also pay huge taxes, making it a major component of the economy.

It is for this reason that analyst urge government to come up with financial incentives to boost the logistics and transport industry in Rwanda.

"Transport business globally is capital intensive but we are operating in an economy where the interest rates are high. As vehicle importers we need a guarantee fund for lenders to open up," said Abdu Ndaru, chairman Rwandan Long Distance Drivers Association.

According to him, few lenders who work with vehicle importers are charging high interest rates on short-term yet freight business in a long-term venture.

Mr Ndaru called for the government's intervention is necessary to boost transport sector in bid to capture the regional transport business currently dominated by Ugandans, Kenyans and Tanzanians.

Foreign transport firms

Data from the Ministry of Trade and Industry indicate that "Rwanda used to control 21 per cent of the transport market from Dar es Salaam to Kigali."

However, the share has dipped to 14 per cent as of 2012 due to competition from truckers in neighbouring countries.

With the drop, it is estimated that Rwanda spends more than Rwf258 billion annually on logistics and transport, but much of this money benefits foreign-registered cargo transport firms.

If Rwanda adopts the right-hand drive vehicles, it would have harmonised its traffic system with Kenya, Uganda and Tanzania and other Commonwealth countries, a grouping the country joined.

Posted on : 22 Nov,2024 | News Source : ABNews