Impact of COVID-19 on Trade & Industry: The frequently asked questions (FAQs)

 1.    Would you tell us about General COVID-19 impact on trade and industry in Rwanda?



-It has made disrupted the supply chain of Rwanda’s trade, both exports and imports. However, between January 2020-May 2020, exports increased 11.3% driven by a 913% increase in the export of gold. This is due to more processed gold being exported than in raw form. However, the volume of total exports decreased by 25.5% during the same period due to limited transport of goods as well as lock down restrictions imposed by export markets at their ports, limiting quantity of traded goods across borders. Imports increased by 7%, while volume of imports decreased by 7.4%. In total, the trade deficit has increased by 4.8% between the January-May 2020 period.

-Domestically, trade within the country has also declined slightly, with wholesale trade decreasing 3% points between Q4 2019 and Q1 2020. Export of domestically produced agricultural crops has decreased by 16% due to the closure of land borders, most especially the DRC border to informal cross border trade. During the period of March and April, at the height of the COVID 19 pandemic, as movement restrictions were imposed, transport of goods, like eggs, vegetables, fruits and other essential commodities, frequently consumed by hotels, restaurants and large public gathering through MICE also reduced leading to an oversupply of produce far outstripping the demand. Prices on the market also experienced price fluctuations due to low demand as well as speculative trading.

  2. What is Ministry of Trade & Industry doing to support local businesses, in this period in   which we are fighting against Covid- 19?


The Ministry of Trade and Industry is working with relevant economic sector stakeholders to cushion businesses during this COVID-19 period. For instance, domestic taxes collected by RRA such as VAT and CIT have been deferred by several months to ease the payment of taxes. The central bank has decreased the minimum capital ratio requirement for banks to facilitate more financial capital to lend to the private sector in addition to other monetary policies. A recovery fund has been established to support the working capital of businesses as well.

3. How is Ministry of Trade and Industry (MINICOM) helping industries to access raw materials?


-Minicom consolidates the list of industries to be considered for VAT exemptions to import raw materials and capital goods from abroad

-Through BDF, Minicom supports SMEs to obtain machinery under leasing program. BDF also offers a guarantee covering  up to 75% to SMEs.

- Minicom links famers' cooperatives to agro-processing industries and helps in drafting and signing of sale/purchase contracts betwen the two parties.

- Through NIRDA, MINICOM supports industries with advanced machinery in different selected value chains. Value chains that received this support include: Banana wine, garment, wood, fruits and vegetables value chains. New sectors to receive the support are poultry, piggery, animal feeds, clay and stones.

-Through NIRDA, MINICOM supports industries with advanced machinery in different selected value chains. Value chains that received this support include: Banana wine, garment, wood, fruits and vegetables value chains. New sectors to receive the support are poultry, piggery, animal feeds, clay and stones

4. Recently, the Government of Rwanda launched Economic Recovery Fund, how will this fund operate and when can it be accessed?


The Economic Recovery Fund is a FRW 200 billion fund that has been created with an objective of supporting businesses hit hardest by the pandemic so they can survive, resume work/production and safeguard employment. It has also been created to expand domestic production of essential goods such as masks, gloves, sanitizers, disinfectants, and others that may be deemed necessary during and post this COVID-19 period.

Businesses that will be eligible for it include;

-Those highly impacted by the restrictions put in place to prevent the spread of the virus, and exposed to consumer discretionary spending, and those with global supply chains that are being disrupted. These include businesses in Tourism, Manufacturing (including Agri-processing), Transport and Logistics and SMEs linked to domestic and global supply chains;

-Small and micro businesses in the informal sector: To protect businesses and people employed in the informal sector while stimulating household consumption, the fund will create a window to support micro and small enterprises through micro-finance and SACCO institutions by providing credit guarantee through the Business Development Fund (BDF).

Generally; are eligible, businesses who demonstrate the negative impact of COVID19 on their operations proven by at least 50% year-on-year losses based on VAT returns submitted to the RRA. Those businesses will have to demonstrate they were commercially viable prior to the COVID-19 pandemic, and that they can return to viability and contribute to the recovery of the economy.

There are additional conditions to fulfill in order to assess the Fund’s support (see Economic Recovery Fund Operational guidelines available at your respective banks and on MINECOFIN and BNR websites

5. What sectors will be covered by the Economic Recovery Fund? What will be the eligibility conditions for affected businesses to access the fund?


-COVID-19 has disrupted the different priority sectors in many ways.

-Starting with tourism where owners of hotels and tour operators are losing over 90% of their revenues from cancellations of events and bookings due to the crisis and global lockdowns. Through the Fund, the Government has directed banks to refinance existing loans and provide working capital loans once demand for the sector’s services resume.

Existing hotels loans balances as at 31 May 2020 (or on the date of the refinancing – latest data available) will be refinanced up to 35% at a lower rate of 5%, 3 years grace period and with a longer repayment period of 15 years.

(Only performing loans qualify for the refinancing - loans should have been classified as class 1 or 2 as at end February 2020)

-SMEs and large corporates; the lockdowns in Asia in February and March disrupted supply of raw materials and intermediate goods (case of manufacturing companies) and later the national lockdown brought most businesses to almost a halt (industries, transport activities, schools etc.). We expect local demand to go back to normal in the short term and the fund will provide for working capital loans to viable SMEs and large corporates to sustain themselves during this crisis, irrespective of their sector, and for these businesses to deliver ongoing growth through their ability to persist and support employment.

Companies providing essential goods will be able to receive lines of credit in order to cater for their working capital needs.

Terms of the loan: 8% interest rate, grace period of 1 year and a tenor of 5 years.

Loan to a SME will be guaranteed through BDF up to 75% at 0.25%.

-Lastly, the fund will also enable micro-businesses to access working capital loans and guarantee schemes through BDF will provide a 75% guarantee at 0.25%.

Terms of the loan: 8% interest rate, grace period of 3 months and a tenor of maximum 2 years.

How is the allocation of the Fund among participating banks, MFIs/SACCOs and to borrowers will be done?

a)Fund allocation for working capital to SMEs and large corporates:

-Funds allocation to Banks: funds will be allocated to banks based on their share of total assets as at 31 March 2020.

Only solvent and liquid banks will qualify to access the Fund.

-Funds allocation to Borrowers: borrowers may access up to Frw 75 million under the SME window and Frw 300 million for the Large Corporates window – subject to the Bank’s single obligor limit and the borrower’s repayment capacity;

-In order to serve as many customers as possible, borrowers should only be allowed to access financing under the ERF Working Capital Window once;

b)Fund allocation for working capital to microbusinesses;

-Funds allocation to MFIs and SACCOs: funds will be allocated among participating and eligible institutions (Limited Liability MFIs and SACCOs) based on their share of sector total assets as at 31 March 2020;

Only solvent and liquid institutions as at 31 March 2020 will qualify for the facility.

-Funds allocation to Borrowers: borrowers may access up to Frw 5 million in Limited Liability MFIs and Frw 1 million in SACCOs subject to the PFIs single obligor limit and the borrower’s repayment capacity;

Where is the Government getting the support package from? Donors, National Budget?


The Government of Rwanda and development partners /private sector (MTN has supported with FRW 100 million) /Foundations support and can support this initiative. The Government has put a seed fund of Frw 101 billion (equivalent to US$ 100 million) to start the fund and we are targeting to grow the fund to Frw 200 billion.

Are banks ready to help businesses especially those seeking to get loans?


Yes, they are. Through the central bank (National Bank of Rwanda), banks will be able to borrow funds for on-lending to businesses. They will handle cases individually depending on the needs.

Interested businesses in applying for Economic Recovery Fund, please visit your bank for application. If you have questions, please contact the Fund at  with the subject line “COVID-19 ERF.”

How will the banks know which businesses are viable to receive loans and that they will be able to pay back?


Banks will have to ascertain that the businesses borrowing were able to service debt and were in sound financial health before the crisis started. They should also be able to demonstrate how their incomes have declined because of COVID-19 compared to the same period in 2019.

How long will the fund be available/open?


 Two years

How many businesses do you expect to distribute funds to?


This will depend on the loan awarded amounts. Generally, we anticipate at least 2,500 businesses will receive funding with the vast majority of the awards going to micro-businesses.

For hotels, we are expecting more than 100 hotels to benefit from loan refinancing support (we will get the accurate number from banks).

What is the role of the central Bank as Fund Manager?


The National Bank of Rwanda as Fund Manager will;

-Establish processes and procedures that will allow financial institutions check and confirm that customers have not yet been financed under this facility;

-Establish processes and procedures describing the required documentation to be submitted alongside the disbursement request and modalities of their submission;

-Establish the processes and procedures for reporting Economic Recovery Facilities;

-Put in place adequate measures to ensure that funds disbursed are only put to use for the purpose for which they were provided and not diverted. A Monitoring and Evaluation Team will be constituted to continually assess that financing provided under this scheme is not diverted. Any borrowers found to have diverted the financing provided will be sanctioned and penalised accordingly.

What policies and reforms is the government working to facilitate ease of doing business and investment post COVID-19?

Answer: In addition to the Economic Recovery Fund, the Government has rolled out a number of temporary policies to support businesses during this crisis. For example, in order to provide more liquidity to the banking sector, the central bank lowered the Reserve Ratio from 5% to 4%, introduced an Extended Lending Facility for banks over three, six and 12 month tenors as well as established measures to rediscount bonds over a 15 day rather than 30-day period and at market value as opposed to the 3% discount.

In addition, the Central Bank has encouraged banks to exceptionally restructure loans of borrowers impacted by the pandemic.

On the fiscal side, a number of tax relief measures were announced aimed at supporting tax payers and further measures are expected to be rolled out in the future.

What efforts is the government taking in ensuring Rwanda remains an ideal investment destination?


Rwanda remains one of the most attractive places to do business. We are seeing disruption in the different supply chains of our priority sectors and adjusting our reforms and policies accordingly to make it easy for investors to continue doing business in Rwanda.

For those already investing in the country, the Aftercare department at RDB is ready to advise on any challenges they may face and share vital information to ensure we all navigate through this crisis smoothly and stabilize sooner as services go back to normal.

What sectors have emerged prime for investment during this crisis?


This crisis has shown how important investments in technology and essential products and services is. Going forward, our goal will be to identify sectors and supply chains that we need to digitize and encourage firms to invest in import-substitute products that can cater for both local and regional consumers’ needs especially in times of crises like this when global supply chains have been severely disrupted.

We have seen a strong capacity of our entrepreneurs to innovate & adapt to the changing global landscape. Some concrete examples of this were:

I. Delivery services were re-organized within hours since the lockdown was announced on March 15th.  For example;

DMM HeHe, a delivery company quickly extended partnerships with a number of supermarkets, and shops and increased their delivery capacity.

*Get It, a produce delivery service that focused on restaurants, changed its focus to serve households. [they are ISO 2000 certified with high hygiene standards];

*Garden of Eden, a produce delivery service partnered with restaurants and were able to deliver a great range of products.

*When transport of passengers by moto taxis was prohibited, Yego Motos rapidly re-organized its drivers for food delivery partnering with restaurants and shops.

*We also saw swift adaptation in the finance sector which has been essential in such a crisis situation when access to cash flow and liquidity becomes key for SMEs survival.

III. Manufacturing companies also adapted their production to meet the growing demand for medical supplies and personal protection equipment.

*For example, FabLab a collaborative space for entrepreneurs has used 3D printing technology to produce protection shield masks that are already in use. The have also developed a made in Rwanda ventilator that is currently under testing; and a prototype for a disinfecting spray door frame.

*The textile sector, has also shifted production to masks and protection suits, for example This has been organized in close collaboration with the Ministry of Trade and industry to ensure necessary standards are met.

Fund governance – how is the Fund going to be monitored?


There will be an Economic Recovery Fund Technical Steering Committee meeting atleast monthly to review the performance of the Fund with regard to;

-           Amounts disbursed, by which institution, to which borrowers, in which sectors;

-           Performance of the borrowers with regard to loan repayment, classification and provisions, if any;

-           Performance of the borrowers in terms on turnovers, number of employees and taxes paid;

The technical committee will also be:

-Monitoring of borrowers to ensure proper use of Funds by organising site visits and any other monitoring procedures as may be deemed necessary;

-Consider allocation of Funds amongst banks based on usage and propose to the High Level Steering Committee for approval;

-Assess and advise when terms and conditions may need to be reviewed;

-Assess and advise when sanctions may be required in case of abuse.


- Ministry of Finance and Economic Planning (Chair)

- Ministry of Trade and Industry

- Rwanda Development Board

- National Bank of Rwanda

- Private Sector Federation

- Rwanda Bankers’ Association

- Association of Microfinance Institutions of Rwanda


6. As we are fighting against Covid-19, some businesses are still closed; others are not operating as it was before. However, business people are continuing to pay taxes, is there any way to help these business people?


Yes; The payment of taxes has been deferred by RRA to ease the pressures caused by the COVID-19 pandemic on businesses as they experienced months of non-activity and reduced activity. Additionally, the recovery fund will enable businesses to borrow working capital at lower interest rates and with favorable repayment terms to facilitate their cash flow and resumption of business activities.

7. These days the prices of Cement have been increased, and this came after MINICOM published the prices of cement! As MINICOM, do you know the reason why  prices were increasing?


The price of cement increased for a number of reasons;

-During the lockdown period, there was no construction activity. Upon reopening of some sectors of the economy, including resumption of construction activities, the demand far outstripped supply on the local market, as the main cement industry had been inoperable and working at reduced installed capacity during the lockdown period. This was further strained by the limited movement of cargo and traders across borders to source cement. The supply of cement is slowly regaining traction to meet the market demand, but with some structural challenges due to the supply of locally produced cement and movement of cargo across borders.

-The recent announcement by the Ministry of Education to construct 25,000 classrooms has further placed pressure on the local cement market, with limited supply affecting the prices. As more supply is provided over the coming weeks and months, through both domestically produced cement and imports, this situation should normalize to pre-COVID-19 levels.

8.MINICOM conducts Inspections on different markets , but it is always in Kigali, when will this team reach other parts of the Country?


While MINICOM inspectors could not physically undertake visits across district borders due to the movement restrictions, we have worked with local government through business development units (BDU) to undertake the market inspections in respective districts. This has helped to monitor and normalize prices in districts where MINICOM inspectors cannot physically reach. MINICOM will continue working with local government officials to ensure that prices temporarily set for key commodities are adhered to by all traders.



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