Freight costs for horticulture products through Kigali International Airport are set to reduce by 50 per cent following government subsidies.
The subsidies planned to start next year could boost horticulture exports looked at high value-low volume products as part of the export diversification strategy. The move also makes Rwanda horticulture exporters competitive in the region.
“The freight charges from Kigali International Airport will be reduced through block booking,” said George William Kayonga, chief executive of National Agricultural Export Board (NAEB).
In partnership with the private sector, Mr Kayonga said they plan to pay the airline upfront for space covering the whole year and have started negotiations with the operators.
Currently, Rwandan horticulture exporters pay Rwf1500 in freight charges per kilo to the European markets whereas the regional peers from Kenya and Nairobi pay less.
Subsidising on transport costs is part of interventions the government unveiled during the horticulture conference in Kigali.
The incentives are meant to attract investors in non-traditional exports. The high dependency on traditional exports — coffee, tea and minerals whose global prices have been falling over the years, exposing the country to external shocks, resulting in drop in revenue receipts from the commodities.
For instance, coffee which is the country’s biggest export has suffered from price fluctuations on the global market, depressed demand across other markets and low valuations.
A new initiative aimed at boosting horticulture production, quality and exports has been launched by NAEB and sector stakeholders.
The Rwanda horticulture working group also seeks to attract more private investments into horticulture industry, as well as stimulate dialogue among stakeholders.
The group will provide a platform to promote more public-private sector partnerships in the sector to help expand the country’s horticultural sector.
According to the National Export Strategy, the horticulture industry is expected to fetch more than Rwf96 billion ($129 million) per year by 2018, from current Rwf7 billion ($10 million).
SOURCE: THE EAST AFRICAN