Rwanda’s Multi Billion Cross Border Markets: What’s Behind Poor Performance?

Kirehe Crossborder Market

Since the last five years or so, ribbons were cut to kick off business in Rubavu, Rusizi, Nyaruguru, Cyanika, Kagitumba, and Rusumo cross border markets respectively.

The whole idea in Rwanda’s economy was to set the bar much higher in regional trade with facilities meant to cater for the neighboring communities while also curbing illegal trade.

For a variety of reasons, the markets never really caught on and both the neighboring communities and the private sector suggest that they are a loss.

In a coverage by KT reporters, they suggest that their project studies would have been scrutinized and/or abandoned for something different wherever needed be.

Karongi crossborder market

Karongi Market Expecting Saviors from Kigali

On the shores of Rwanda’s touristic wonder – Lake Kivu in the Western Province was built one of the cross border markets to serve the business flow between Rwanda and the Democratic Republic of Congo(DRC).

Karongi market which has a capacity to host 600 businesses was built by the district in 2018 and completed one year later at a tune of Rwf 1.2 billion in Ruganda village, Bwishyura sector, specifically a place called Nyamishaba.

Our reporter estimates the market to be at 4 kilometers from Karongi town.

Currently, the market has only managed to attract a handful of livestock sellers who gather every Friday of the week in the open air section to sell to their clientele which is dominated by the Congolese community who sail to Goma.

Investors from Karongi district who had much expectations from the market have put the later in the basket of ‘loss’ and they blame it to COVID-19 which caused business shutdown between 2020 and 2021.

Karongi crossborder market

To this they add the bilateral relations between Rwanda and the neighbor from the West which deteriorated in the wake of COVID-19.They have looked all around only to find a tentative solution in Kigali where they expect traders to establish their branches to their own Karongi market.

“We consulted factory owners from Kigali to interest them to bring their products here. Across the lake, our Congolese neighbors would prefer buying from here than sailing either to Bukavu or to Goma,” Abimana Mathias, the president of Private Sector Federation(PSF)-Karongi district told KT’s journalist on October 31.

Karongi district mayor said that they are working on a plan that will consist in rehabilitating the storage facilities and then build a port and a road to the market from Karongi city, a move which they think, “will attract investors.”

Cold rooms totaling Eighty-ton capacity idle in Rusizi Market

Still in the Western Province, another cross border market is straggling and the private sector is equally complaining.

The Rusizi market was completed at a tune of about Rwf 1 billion back in 2018 and included four cold rooms for the meat, fish, fruits and vegetables among other storage facilities meant to attract Bukavu wholesalers to the border district.

Alas! This did not work because, according to Godfrey Kamuzinzi, the president of the Private Sector Federation in Rusizi, “COVID-19 disrupted the business, and, as if this was not enough, DRC put in place a policy to close the border at 3PM which does not allow the Congolese citizen to stay in Rusizi for a whole day for business.”

Rusizi Cross Border market

To try a temporal remedy to the problem, the Rusizi traders agreed to create groups that are in charge of shipping products to Bukavu on a rotational basis.

“We had thought that it would be helpful to have the Congolese neighbors come here because this meant a lot in business. However, given the barriers they have, we found it important to send them our products, which leaves our market idle in a way,” he said.

Crossing to Bukavu means that Rwandan traders are the ones who pay taxes for their commodities while it would be the other way round, were the Congolese able to make it to Rusizi. No wonder, in Bukavu, the Rwandan traders will spend more money in the process.

Blame our failure to Hawkers – Rubavu traders

Rubavu market at the gate of Goma, the capital city of Northern Kivu Province of DRC bordering with Rubavu district in the Western part of Rwanda is no wonder the favorite market.

Initially 50,000 people from the Congolese community using this border daily, numbers have shrunk to 3000 people during and after COVID-19.

The traders in the Rwf 3 billion market that was completed in 2019 however blame their poor performance to street vendors outside the market.

“Why would anyone come to us while they can buy to hawkers outside, at cheaper price? The local leaders should organize these people who are killing our businesses and have them also enter this market to acquire stands, otherwise, we shall never sell,” one of the traders said.

Mathematically, the market is under performing in its 192 rooms.

Uwamahoro Violette, the vice president of Rubavu transborder market said that the facility “has everything in place, but failed to attract traders.”

Giving an example, she said that the meat section has 20 plots but 4 are in use, while among the 22 plots in the fish section, 2 are in use and this makes three out of four cold rooms idle.

In the financial institutions’ section, the market had managed to attract Umurenge Savings and Credit Cooperative, commonly known as Umurenge Sacco and Duterimbere, but the latter pulled out a couple of months ago.

That the trans-border markets where government invested a fortune are not serving fully the purpose they were built for, governor of Western Province Lambert Dushimimana said it is a sad reality.

Bugarama crossborder market

“It is a loss, even though some of the markets are performing well. For example, Bugarama market is operating to its full capacity while Rusizi 1 is at an average of 15 per cent operation. We equally noted the problem in Karongi, Rubavu and Nyamasheke markets respectively,” said Governor Dushimimana.

The governor said, that the issue of taxes which the few traders in the market claim to be high can be discussed, while for the issue of hawkers, he believes that it belongs to local leaders to wake up and address it once and for all.

For Karongi, the governor confesses, that the market was not put at a strategic place, but it needs infrastructure that would make it friendly, including a parking and a road.

He promised, that his leadership is also working on other issues that would revamp the markets, including shutting down the small markets of hawkers who operate without paying taxes, and kill businesses of the legal traders who contribute to tax base.

We are losing a beautiful facility – Cyanika traders

In the Norhern Province, the narrative is not different. The Cyanika cross border market laying between Rwanda and Uganda border was completed in 2018 at a cost of Rwf 1.5 billion.

Strategic, the market is meant to serve not only Uganda and Rwanda, but DRC in transit to Goma and probably Burundi via Rwanda.

Cyanika crossborder market

“The smaller markets around us are booming, but for us, we are struggling quite a lot. This is a loss and I think, the money could have been invested in something different,” Tumukunde Francois Xavier, one of the traders said.

The worry for the benefiting community is now beyond the poor occupation rate, but they are also concerned that the facility is being damaged.

The market, 170 plots is closed, except for 5 rooms and the people wonder why the facility cannot be used for something different, if the market business cannot work.

Some put the blame on the reduction of traffic on the border with Uganda after deterioration of bilateral relations, but others fear that high taxes are to blame.

“It is a loss to have a facility like that which is not working. We have been discussing with traders here and neighboring districts to see how we can revamp the market. We hope this month we shall kick off a market that can operate at least two days a week, which would be a good start anyway,” said Jean de Dieu Munyembaraga, the PSF chairman in Burera district.

To start however, they wish to have the Ministry of Trade and Industry fix some prices, and to give a grace period of taxes for at least three months.

Governor of Northern Province Maurice Mugabowagahunde told KT Press, that they are carrying several consultation meetings to have Cyanika market operate to its full capacity, and the consultations involve the government representatives and the private sector.

Christine Nyiramana, the chairperson of Burera district council told our reporter, that they aim at reopening this market by November 16.

In front of these challenges, the Ministry of Trade says that the issue has a lot to do with COVID-19 challenges which disrupted regional trade and the  businesses that close at 3PM in some neighboring countries.

“We are continuing to carry a campaign among the traders, encouraging them to bring their commodities in cross border markets which have growth potentials. The campaign targets traders not only from the borders, but also the rest in the country at large,” an official at the ministry told KT reporter.

Kagitumba cross border market

Sound strategies may need to be put in place to make sure that Kagitumba and  markets that were recently completed at a tune of Rwf 4 billion each-now opening doors are not affected by the same fate.

For Rusumo market, it was completed in the eve of COVID-19, and thus, the country used it for a transit centre for the pandemic.