RWANDA: High construction imports but investors still needed

Rwanda’s trade deficit in the construction sector is set to remain high at least in the short and medium term even after Cimerwa Ltd, the largest cement manufacturer, promised to satisfy the market and export the surplus.

Rwanda’s construction sector like other sectors of the economy is a net importer.

However, Cimerwa, has completed its new production plant in Western Province, which is expected to stop cement imports. The government said although the deficit will reduce, more investors into the sector are needed.

For example, last year the construction sector imported materials worth Rwf166.1 billion ($227.8 million) while the country’s exports remained at a paltry Rwf15 billion ($21.1 million).

In 2013, Rwf157.7 billion of imports were recorded while exports fetched Rwf20 billion.

“We still import significant volumes. The new Cimerwa production facility will improve the situation but the government continues to interest investors in this sector in order to reduce the gap,” said Robert Opirah, Trade and Industry Ministry official.

High trade deficit in the construction sector is partly attributed to a booming industry, leading to a high demand for construction materials most of which are manufactured outside Rwanda.

Construction sector last year grew by 6 per cent down from 8 per cent a year before even though it is one of the highest growing sectors.

Rwanda Patriotic Front, the ruling party, is one of the private investors that have made significant investment in construction companies — Ruliba Clays and East African Granite Industries — that are making tiles and bricks.

However, some of the locally manufactured products especially the Ruliba bricks are more expensive compared with the imported products which encourages imports.

Other domestic companies are Tolirwa, Afrifoam/Simaco, Uprotur, Master Steel, SteelRwa, Simaco, Ufametal and Safintra.

“Importing more goods causes currency instability for a net importing country especially due to fluctuation of a dollar which is used on the international market from where most third world countries import,” said Hannington Namara, country director of Trade Mark East Africa Rwanda office.

Mr Namara said more imports do not encourage production locally since domestic industries are in most cases outcompeted by cheap products.

KENYA: Dangote to build Kenya cement plant in $1.48bn Africa deal

A Chinese firm has signed a deal worth $1.487 billion with Nigeria-based cement giant Dangote Group to build cement plants in several African countries including Kenya.

Owner of Dangote Group and Africa’s richest man Aliko Dangote has in the past revealed intention to put up a plant in Kenya. He has already been given nod to prospect for limestone in Kanziku-Simisi, Kitui South sub-county by the county government.

The firm is also expected to unveil a cement factory in neighbouring Tanzania.

Beside Kenya, other plants to be built by China’s Sinoma International Engineering Co will be in Zambia, Senegal, Niger, Mali, Cameroon, Cote d’Ivoire Ghana and Nepal. They are expected to add 25 million metric tonnes to Dangote’s existing capacity of almost 50 million tonnes of cement.

Mr Dangote told reporters on Wednesday at the signing ceremony in Lagos work on the plants would be completed within 30 months. He said the move is “another progressive step” toward the company’s plan to increase the total output of cement to 100 million tonnes by 2020.

“We have been partnering with Sinoma for a very long time and I can tell you that they are very reliable to handle this projects,” he said, noting that the Chinese firm had built several plants in Nigeria and other countries for his company.

The projects will include installation of equipment as well as mining, quarry and power facilities.

Shen Jun, chairman of Sinoma said the Chinese company had built more than 10 cement plants for Dangote Group since 2008 in several African countries.

He termed the cement plants and many other projects built by Chinese companies in Africa as part of the “prerequisites” for the continent’s industrialisation.

He promised to “bring the best technology from China to these projects” and to produce for African countries skilled local workers.

The signing ceremony was also attended by diplomats from China, Zambia and Niger. Dangote Group is the largest industrial conglomerate in West Africa and one of the largest in Africa with businesses involving cement, sugar, flour, salt, pasta, beverages and real estate.

DEM. REP. OF CONGO: L’importation du ciment gris conditionnée par la détention d’un contrat-programme

Le gouvernement veut mettre de l’ordre dans le marché local du ciment. Raison pour laquelle, il a instauré la signature d’un contrat-programme avant toute importation du ciment gris.

Désormais, l’importation du ciment gris en République démocratique du Congo (RDC) sera conditionnée par la détention d’un contrat-programme. La décision a été annoncée, le 17 août, par le ministre de l’Economie nationale, Modeste Bahati Lukwebo.

Selon le ministre, ledit contrat devra être signé entre l’opérateur économique intéressé par l’activité et un représentant de son ministère.

Bahati Lukwebo a expliqué les motivations de la nouvelle mesure. Celle-ci a été prise, a-t-il précisé, pour lutter contre la fraude sur les importations du ciment gris. Pour lui, cette fraude préjudicie le climat des affaires et l’essor économique du pays.

Selon les chiffres officiels dont dispose le ministère de l’Economie nationale, le besoin en ciment gris en RDC est estimé à environ 3 millions de tonnes par an. Quant à la production locale annuelle, elle ne dépasse pas 500 000 tonnes. Une production essentiellement assurée par la Cimenterie de Lukala (Cilu). L’autre cimenterie locale, la Cinat, est à l’arrêt depuis 2008. Pour combler ce grand écart, plusieurs partenariats public-privé ont été signés parmi lesquels, le projet PPC Barnet et Sinoma ainsi que CIMKO. Chacune de ces entreprises indique avoir la capacité de produire 1 000 tonnes par an.

Après les élections de 2006, le gouvernement avait décidé d’exonérer les importations du ciment gris pour soutenir le programme de construction des infrastructures connu sous l’appellation «Cinq chantiers de la République». Modeste Bahati affirme que certaines entreprises ont profité de ces exonérations pour importer du ciment destiné à la commercialisation.

« Après enquête, nous avons remarqué que certaines sociétés se livrent à la fraude intellectuelle. Elles prétendent importer du ciment destiné aux chantiers exonérés en vertu du code des investissements ou de certaines conventions particulières. Mais en réalité, au lieu de se contenter d’importer le ciment destiné auxdits chantiers, ils en ajoutent, et en grande quantité, qui est mis en consommation sans pour autant payer la fiscalité et la parafiscalité », déplore le ministre.

Sur le marché local, le ciment exonéré coûte moins cher par rapport à celui produit localement. Ce qui, selon certains observateurs, complique la tâche des producteurs locaux, soumis à la fiscalité aux divers impôts et taxes. La production locale du ciment pâtit donc de ces importateurs qui proposent des prix plus bas que leurs concurrents congolais. En plus des importateurs qui profitent des exonérations, d’autres font passer leurs marchandises- du ciment notamment- par le marché de Lufu à la frontière de l’Angola sans payer la douane. « Il s’observe une fraude massive du ciment qui entre dans le pays sans payer les droits dus à l’Etat. Il est vrai que Lufu constitue un casse-tête pour l’économie congolaise », a fait remarquer Modeste Bahati.